The Florida Office of Insurance Regulation (OIR) has proposed ending its current placement under the state's Department of Financial Services (DFS), calling for a unified regulatory structure that would consolidate all insurance oversight under the state insurance commissioner.
The proposal was outlined in a memo sent to state legislators, according to the Miami Herald. The memo also alleged that the DFS failed to forward the majority of consumer complaints and that its staff lacked sufficient training to identify regulatory violations.
The regulator said Florida is the only US state where insurance oversight is split between two separate agencies, which it argues limits the effectiveness of consumer protection and market oversight.
According to a report from AM Best, only 5.2% of consumer complaints related to property and casualty insurers were forwarded from DFS to OIR over a five-year period. Among the complaints passed on, just 3.4% were found to involve confirmed statutory violations, which the regulator attributed to insufficient training among DFS personnel.
In contrast, OIR said it completed over 600 investigations and more than 20 market conduct examinations in 2024, resulting in over $8 million in consumer restitution. The memo said that transferring regional offices currently under DFS to OIR would enhance the regulator’s ability to engage directly with consumers through in-person visits and field assessments.
The dual-agency model also impacts the state's ability to assess market risks and insurer conduct, OIR said. In cases involving failed insurers, the insurance department is responsible for determining whether company executives contributed to the insolvency.
However, reports on insolvencies are prepared by a division within DFS, requiring OIR to enter legal agreements to access the necessary information. OIR then often has to hire outside firms to replicate the analysis already conducted by DFS.
Administrative inefficiencies were also cited. OIR said operating under DFS creates bureaucratic delays in functions such as human resources, facility management, and other internal operations.
The proposed change would maintain OIR’s status as a cabinet-level agency, with the commissioner continuing to lead the department. However, under the new model, all insurance-related duties currently shared with DFS would be consolidated within the insurance office.
Agent and agency services are among the regulatory areas currently split between the two entities. OIR said that bringing these responsibilities under its sole authority would improve enforcement by enabling quicker identification and resolution of statutory violations.
Established to regulate Florida's insurance market, the OIR is responsible for licensing insurers, reviewing policy forms and rates, conducting market conduct examinations, and ensuring the solvency of insurance entities.
The office currently operates under the leadership of the Florida Insurance Commissioner and functions as part of the Financial Services Commission.
The OIR itself is not free from criticism. Axios notes that there are reports indicating that thousands of consumer complaints against property insurers were not adequately addressed.
Reportedly, over a five-year period, only 5% of approximately 52,000 complaints reached regulatory bodies, raising concerns about the efficacy of the complaint-handling process.
A 2022 analysis also suggested that some insurers diverted billions to affiliated companies while claiming financial hardships due to hurricanes and litigation. This raised questions about the OIR's oversight and the transparency of insurers' financial practices.
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