The Florida Office of Insurance Regulation (OIR) announced this week that eight insurers will pay more than $2 million in fines for misconduct in handling claims from Hurricanes Ian and Idalia. Commissioner Michael Yaworsky emphasized that his office is prepared to hold companies accountable for failing Florida’s policyholders, noting that repeated violations undermine public confidence and delay recovery for storm victims. State legislators and political leaders quickly praised the enforcement actions, framing them as proof that the regulatory system is working to protect consumers after years of frustration with delays, underpayments, and unfair denials. Yet when you read the actual consent orders, the story becomes more complicated.
The Monarch Paradox: Growing Market Share While Paying Fines
One of the more striking examples involves Monarch National Insurance Company. On August 28, 2025, OIR entered a consent order against Monarch for widespread violations during Hurricane Ian and Idalia claims handling. The company was cited for using unlicensed adjusters, failing to acknowledge claim communications within the statutory fourteen-day period, omitting required disclosure language from more than a thousand preliminary estimates, and missing the ninety-day deadline to pay or deny dozens of claims. For these violations, Monarch was fined $325,000 plus administrative costs.
Yet only six days earlier, on August 22, 2025, the same regulator approved a separate consent order authorizing Monarch to assume up to 25,000 policies from Citizens Property Insurance Corporation as part of Florida’s ongoing depopulation program. In other words, while Monarch was being penalized for misconduct that harmed policyholders, it was simultaneously rewarded with thousands of new customers taken from Citizens, the state’s insurer of last resort. This curious juxtaposition raises questions about the balance regulators are trying to strike. Are Monarch’s executives pleased to be expanding their market share, or frustrated by the fines that accompany such growth? Perhaps both reactions are true. Why does the insurance commissioner allow a claims-cheating insurer to participate in the take-out program?
Market Conduct Exams: Scratching the Surface
The consent orders certainly send a signal, but experienced observers and students of this blog know that market conduct examinations rarely reveal the full story of insurer behavior. These reports tend to focus on statutory checkboxes such as whether claims were acknowledged on time, whether certain disclosure statements were included, and whether payments were issued within the ninety-day window. While these failures matter, they do not capture the systemic practices that most impact policyholders.
The real harm often comes from internal programs and vendor arrangements that are designed to minimize payouts rather than ensure accuracy. Adjuster guidelines, claims management software, and so-called “quality assurance” programs can quietly enforce lowballing across thousands of claims. Regulators, however, rarely ask to review these internal documents. As noted in my earlier post about Heritage Insurance’s field practices, departments of insurance often shy away from requesting evidence that would reveal the deeper machinery of claims underpayment. Instead, the exams produce findings that are visible and headline-friendly but do little to reform the conduct that policyholders actually experience on the ground.
I noted that these investigations rarely uncover what is truly going on because the market conduct study does not ask for the right records:
Insurance company property claims manuals are often sanitized to prevent criticism. They contain general and often give vague instructions to claims adjusters. The actual instructions are often provided in verbal meetings with claims managers, which may have PowerPoint presentations, email claims bulletins, and other non-specific documents which are not placed in claims manuals. Why don’t market conduct examiners and departments of insurance investigators ask for these types of documents when investigating insurance company claims practices and conduct?
If you will take just a second to read the attached market claims examination of Monarch, you will see why I made this comment in The Regulatory Blind Spot: How Insurance Departments Fail to Detect Systemic Bad Faith Claims Practices:
Uncovering bad faith conduct typically requires a deep understanding of insurance company operations, claims handling procedures, and internal incentive structures. It demands rigorous analysis of claims data, thorough examination of internal documents and communications, and skilled interviewing of company personnel….
Uncovering bad faith conduct typically requires a deep understanding of insurance company operations, claims handling procedures, and internal incentive structures. It demands rigorous analysis of claims data, thorough examination of internal documents and communications, and skilled interviewing of company personnel.
All the OIR did was read cursory file materials looking for administrative errors. It did not dig into one shred of an internal claims management document, report or directive. It is a sham consumer protection and disgraceful to call it anything more than what it is—cursory and simplistic.
A System Built on Contradictions
The dueling orders involving Monarch highlight the contradictions at the heart of Florida’s insurance market. Regulators impose fines for misconduct even as they depend on the same insurers to assume large numbers of policies from Citizens. Political leaders celebrate the enforcement actions as victories for consumer protection, while companies that mishandled claims are simultaneously greenlit to expand their books of business.
For policyholders, this contradiction raises an uncomfortable question. Are these enforcement actions actually correcting the systemic issues that plague hurricane claims, or are they serving more as a performance of accountability? Until regulators are willing to dig into the internal systems and documents that drive claim outcomes, fines like these are just another cost of doing business for insurers.
Thought For The Day
“Those who can make you believe absurdities can make you commit atrocities.”
—Voltaire
