STUDY: FL Insurance Companies Siphoned Off Profits, Cried Poor

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Florida residents have been inundated with stories about insurers saying they don’t have enough money to pay claims in the wake of hurricanes Irma and Michael, but that’s because they were siphoning off the profits to their parent companies and affiliates to the tune of billions of dollars, according to a study obtained by the Miami Herald/Times.

The start of the state’s insurance market meltdown came on the heels of those two storms between 2017 and 2019, as companies justified big rate increases to cover their losses.

But those financial hardships don’t tell the full story, according to the 2022 study that has never been made public and was released to the Herald/Times after a two-year wait for public records.

The report, the most in-depth dive into the byzantine finances of Florida’s homeowners insurance market, reveals that as the insurance market was ailing and companies were losing money, executives distributed $680 million in dividends to shareholders while diverting billions more to affiliate companies. Executives with most Florida-based insurers were removing so much money from their companies that they violated state regulations, the study’s author concluded.

The result left some insurers financially weaker — and potentially unable to pay claims — heading into the depths of the state’s insurance crisis. State lawmakers never saw the report. The state’s then-insurance commissioner and Gov. Ron DeSantis focused on legal reforms making it harder to sue insurers.

How about that.

When I was a reporter, I once had an interview that ran over several hours because a Republican state official was explaining to me the political ins and outs of the insurance market.

I’ve never forgotten one thing he said: “Follow the insurance and bonds. That’s where all the payoffs are hidden.”

So if Ron DeSantis is going out of his way to make taxpayers reimburse the “stressed” insurance market in Florida, he just might be in on the scam.