The Florida Department of Financial Services (DFS) has issued a formal response to criticism from the state’s insurance regulator, disputing claims of inefficiency and mismanagement as lawmakers consider a proposal to consolidate insurance oversight functions.
The dispute follows a memo from the Florida Office of Insurance Regulation (OIR) to state legislators, recommending the removal of the insurance regulator from the DFS and transferring all insurance-related powers, responsibilities, and funding to OIR. The proposal seeks to centralize Florida’s insurance oversight into a single regulatory body.
In its response, DFS rejected what it called an “unforeseen desire to remake Florida’s insurance regulatory system for its own institutional benefit.”
According to a report from AM Best, the department said the current structure – where DFS handles consumer services and fraud prevention, while OIR focuses on company regulation – remains suitable for managing one of the country’s largest and most complex insurance markets.
OIR cited internal data showing that over a five-year period, only 5.2% of consumer complaints about property/casualty insurers were forwarded by DFS. Of those, only 3.4% involved confirmed statutory violations. The insurance office said this indicates DFS staff may lack the training to recognize regulatory breaches.
DFS countered that the figures are not indicative of poor performance but rather reflect its ability to resolve most consumer issues without escalation.
In Florida, the management of insurance complaints has been a subject of scrutiny, particularly regarding the effectiveness of regulatory agencies and their responsiveness to consumer grievances.
The state's unique bifurcated regulatory structure involves two primary entities: the DFS, traditionally led by the chief financial officer and responsible for managing consumer services, including the intake and initial processing of insurance complaints; and the OIR, headed by the insurance commissioner, overseeing insurer licensing, rate approvals, and market conduct examinations.
In 2024, the OIR intensified its regulatory actions, resulting in significant enforcement measures. The OIR imposed fines totaling approximately $2.8 million on insurance companies, a substantial increase compared to previous years.
Additionally, insurers were required to return around $5.9 million to policyholders as restitution for various infractions. The OIR also completed over 20 market conduct examinations and more than 620 investigations, aiming to ensure compliance and protect consumer interests.
Despite these efforts, both DFS and OIR have faced criticism regarding their handling of consumer complaints. Over a five-year period, consumers filed more than 52,000 complaints against property insurers. However, only about 5% of these were forwarded to OIR for potential legal violations, suggesting possible underreporting and inadequate enforcement.
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