The question posed in this title was the headline to a post by the St. Petersburg Times columnist, Robert Trigaux. It was pretty harsh against some of our elected representatives who are neither running the insurance companies nor conducting these actions. Still, here are some of the significant observations in his post:
Wake up and good morning. Remember when Florida’s elected leaders used to stand up against the property insurance industry’s relentless drumbeat that higher rates were the only answer to "fixing" this state’s crumbling homeowners’ insurance problems? Even after what is four-plus years with no hurricanes, the insurance industry’s mantra is unchanged: We are not charging enough and woe to Florida when a big hurricane hits.
In the war of attrition, it’s Florida insurance industry who built part of his "I want to be your governor" campaign on fighting property insurance demands for more, more, more has mentally moved on. And state legislators, increasingly pro-business, are too busy introducing measures to weaken state insurance regulation and give insurers more leeway in charging what they want. Welcome to government by attention deficit disorder.
Which makes for an interesting historical backdrop to an analysis by the South Florida Sun Sentinel. The newspaper found that while Florida property insurers press state legislators to allow them to raise rates without regulator approval, citing losses in recent years, many are funneling fees and payments to unsupervised affiliates — money that could have been used as reserves against claims from storms.
The sick joke in some of these transactions is that some of the large insurance companies years ago deliberately created separate subsidiaries in Florida to insulate the parent company from obligations to fund Florida claims in the event of serious hurricane damages. However, the Sun Sentinel analysis suggests parent companies are only too happy to siphon up any excess funds from Florida operations in these non-hurricane years and still cry poverty. Shame on Tallahassee for being so easily snookered by an industry.
I was snookered as well. And, I imagine so was Trigaux or he would have been writing about this a long time ago. Nobody ever talked about this creative insurance accounting until recently.
The question for our legislators is what are they going to do about it now? So far, it has been little for the consumer. Trigaux has raised a valid question and the legislation that gets passed will prove whether he is right about our elected officials.
And, his post did have some great photos.