Florida Commissioner Yaworsky sees ‘recovery, stabilization’

Florida Commissioner Yaworsky sees ‘recovery, stabilization’

Florida Commissioner Yaworsky sees “recovery and stabilization” | Insurance business America

“We are moving in the right direction”

Disaster and flood

By Mark Schoeff Jr.

No state has been hit harder by catastrophic weather events or had a tougher insurance market than Florida in recent years, but the state’s top regulator says things are turning.

“We’re seeing companies enter the state, return to it, or just generally begin a cycle of growth again,” Florida Insurance Commissioner Michael Yaworsky (pictured above) said in a recent interview with Insurance Business. “We are generally seeing recovery and stabilization.”

Earlier this month, the Florida Office of Insurance Regulation approved eight property and casualty insurers to enter Florida. The same April 3 announcement said the state’s domestic insurers had nearly broken even in combined net insurance, compared with an annual loss of $1 billion in the previous three consecutive years.

The regulator also said Citizens Property Insurance Corp., the state’s last insurer, had a net profit of $746 million in 2023, compared with a loss of $2.2 billion in 2022. It has Approved 13 companies to underwrite more than 354,000 policies from Citizens this year.

Despite the optimistic report, Florida’s insurance market continues to struggle in many ways. Over the past three years, several insurance companies — including Progressive, Farmers, AAA, Bankers and AIG — have stopped renewing home and other policies in Florida, while nine companies have been declared bankrupt or merged with other companies. Significant interest rate increases occur regularly.

But after just over a year in office, Yaworsky remains confident that Florida’s insurance market as a whole is on an upward trend.

“We are moving in the right direction,” he said. “It’s important that we get to the point where consumers feel that.”

Impulse through legal reforms

Yaworsky attributes the improvement in part to legislative reforms. In 2022, the state legislature approved a change in how attorneys’ fees are set. So-called unilateral attorney fees can only be charged if an insurer refuses to cover a claim entirely.

“It was about restoring the rationality of our process environment,” Yaworsky said. “What we’re seeing is that a lot of airlines are buying into the idea that we have a much fairer legal process.”

As a former chief of staff for the Office of Insurance Regulation, Yaworsky was instrumental in the legal reforms that lawmakers approved in 2022, said Robert Gordon, senior vice president of policy research and international at the American Property Casualty Insurance Association.

“He drove some of the legal reform analysis,” Gordon said. “What we were actually trying to do with some of his work was to educate people about the harm that the abuse of the legal system was causing to consumers in Florida.”

But a Florida attorney who specializes in representing policyholders said the changes to attorney fees will disadvantage regular clients who file lawsuits against insurers. The prospect of legal fees is often the incentive for lawyers to take on the case.

“It seemed wrong to throw that away,” said Mark Boyle (pictured above), partner at Boyle, Leonard & Anderson with offices in Ft. Myers and Tampa. “I call it grandma’s roof problem. Smaller consumers and small businesses need these claims protected. [Big insurers] have a huge advantage. You play poker with a billionaire who has more risk, time and process tolerance.”

Yaworsky also cited the tightening of the time period for filing insurance claims after the hurricane from three years to one year as a factor in improving the state’s insurance market.

Assessment of Yaworsky after one year

Just as he is skeptical about the effectiveness of legislative reform, Boyle also doubts that an official like Yaworsky – or any lawmaker – can make a difference in Florida given the dominance of Mother Nature, which determines whether a hurricane makes landfall and wreaks havoc.

“I don’t think the commissioner did a good or bad job,” Boyle said. “He’s trying to address something through politics that can’t be solved through politics. You can’t change the risk of living in Florida.”

Others give Yaworsky high marks.

Dulce Suarez-Resnick (pictured above), vice president at Acentria in Miami, credits Yaworsky for streamlining decisions on rate increase requests from insurers, a process notorious for delays.

“He tried to change that perception — not to be lenient, but to speed up the process and be more efficient,” Suarez-Resnick said.

She also said Yaworsky tried to identify, at the zip code level, places most affected by the cap Citizens sets on coverage and suggest ways to address the problem.

“This is a great approach,” Suarez-Resnick said. “He tries to do everything he can. He listens to what agents tell him.”

Get started selling Florida

State representative Toby Overdorf (picture below right), R-St. Lucie praised Yaworsky as a good salesman for the Florida insurance market as competition for coverage from other states has increased.

“He’s done a great job of bringing new insurance companies into the state and showing the progress we’ve made,” Overdorf said. “The commissioner responded very well to public pressure.”

Yaworsky often hits the road to meet with insurance executives and convince them to do or resume business in Florida.

“There are a lot of ongoing dialogues,” Yaworsky said. “We strongly believe that there are opportunities in our market for private airlines to achieve good results over time. We show that. What they’re looking for … is a sense that Florida wants to work with businesses to make sure we have that market.”

Citizens are “still a very stable entity”

As Yaworsky tries to attract more insurers to Florida, everyone has their sights set on citizen health, which Floridians turn to when they can’t find insurance anywhere else.

Last month, Florida Gov. Ron DeSantis described Citizens as insolvent, a claim Citizens denies. Yaworsky is more optimistic about Citizens, which holds about 1.24 million policies, up from 1.41 million last fall.

Yaworsky said some of the criticism of Citizens focuses on the actuarial soundness of its rates. He said the company had a surplus of $8 billion in 2015. After several hurricanes, a “litigation crisis” and the pandemic in the intervening years, the company still has $5 billion in the bank today.

“It’s still a very stable unit,” Yaworsky said. “We feel good about where Citizens is now. We look to the future with hope.”

Yaworsky’s self-grade: “Solid B”

Overall, Yaworsky gives himself a “solid B” after his first year in office. For example, he advocates “improving market conduct” and creating a deputy commissioner for market conduct.

“There is always room for improvement,” he said. “It’s a tough market. We’ve had some success with that.”

Yaworsky can propose legislative and administrative solutions to challenges in the Florida market. What he can’t do is control the weather, which has such a big impact on the affordability and availability of coverage in the state.

“The wind will do what the wind will do,” he said. “We just have to lie down and be prepared.”

Timeline of insurance developments in Florida

  • July 1, 2019 – The Florida legislature passes House Bill 7065 to regulate assignment of insurance benefits
  • June 30, 2021 – DeSantis opposes bill to replace PIP in auto insurance
    • https://www.insurancejournal.com/news/southeast/2021/06/30/620736.htm Insurer trade group American Property Casualty Insurance Association argued that the cost of average auto insurance could rise by as much as 23% to $344. Drivers with low coverage could see an increase of up to $805 per year. https://www.insurancebusinessmag.com/us/news/breaking-news/florida-mulls-decision-to-discontinue-nofault-insurance-253339.aspx
  • July 11, 2022 – VYRD Insurance is the first new provider to enter the Florida market in over a decade
    • https://www.insurancejournal.com/news/southeast/2021/12/09/645131.htm
  • July 11, 2022 – Bankers Insurance Group exits Florida​​​
  • December 28, 2022 – David Altmaier quits, just a few weeks before a lobbying ban for former state employees comes into force
  • March 13, 2023 – Yaworsky is appointed
  • April 18, 2023 – Tailrow Insurance Company entrance
  • April 19, 2023 – The Senate votes 40-0 on the insurance benefit allocation bill
  • June 22, 2023 – Yaworsky is optimistic about insurance rates
  • July 11, 2023 – It is announced that Farmers Insurance is leaving Florida
  • August 19, 2023 – Orders a rate increase for citizen property, “Citizen Depopulation Program.”
  • October 19, 2023 – Cap on tariff increases
  • November 13, 2023 – Approval of Workers’ Compensation Insurance Rates Decrease
  • November 28, 2023 – Pushing back the data call
  • December 11, 2023 – Requests for a zero percent interest rate increase
  • March 8, 2024 – End of the legislative period
  • April 8, 2024 – Eight property and casualty insurers receive market entry approval following the legal reform

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2024-04-17 16:02:48