Universal Insurance Holdings Inc. has agreed to return more than $30 million to Florida’s hurricane fund and pay $4 million in fines following allegations that it improperly sought reimbursement for ineligible claims related to Hurricane Irma, according to a report from Best Wire.
The company denied any fraudulent activity and stated that the settlement would not impact its financial position, as the amount was covered by reserves set aside more than two years ago.
The investigation was prompted by a former Universal employee who alleged that the company included claims unrelated to Hurricane Irma in its reimbursement filings with the Florida Hurricane Catastrophe Fund. The whistleblower claimed Universal knowingly misrepresented claims data to maximize its recovery from the state-backed fund, which reimburses insurers for hurricane-related losses.
Florida Attorney General James Uthmeier said the review identified numerous unrelated claims that should not have been submitted for reimbursement. These allegedly included non-hurricane-related damages, which, under the fund’s guidelines, were ineligible for payment. The attorney general’s office stated that Universal’s reporting practices led to excess payments from the hurricane fund, the report said.
As part of the agreement, Universal will withdraw its request for reimbursement on the disputed claims, effectively reducing its payout from the fund by more than $30 million. The company has also agreed to update its policies and procedures to prevent similar issues in the future.
Universal maintains that the allegations lack merit, stating that claims data is subject to ongoing evaluation and can change as new information emerges. The company said some claims initially categorized as hurricane-related were later determined to be unrelated to the storm.
The claims review resulted in a reassessment of about 1% of the company’s Irma-related claims, Universal said. The company also noted that insurers frequently revisit claims data as additional details become available, sometimes leading to reclassification of claims.
The Florida Hurricane Catastrophe Fund provides financial support to insurers by reimbursing them for homeowners’ claims following hurricanes. The fund is intended to stabilize Florida’s insurance market by helping carriers manage catastrophic losses.
In 2020, Universal reportedly increased its estimated losses from Hurricane Irma to $1.4 billion, citing expectations of additional claims.
