The Florida House of Representatives Insurance and Banking Subcommittee met on April 3, 2025. The meeting included a discussion over HB881 and testimony and discussion over the Insurer Affiliate Study reported by the Miami-Herald.
HB881 was created in response to Committee hearings that revealed concerning practices in the Study where insurance companies were using affiliate structures to transfer significant premium dollars to related entities potentially to the detriment of policyholders.
FIRM’s lobbyist The Southern Group provided a report of that meeting. We’re summarizing the discussion about HB881 and the Insurer Affiliate Study below, and you can read the full report here.
HB881
HB 881 in the Florida 2025 legislative session focuses on insurance accountability and improving the claims process for insured individuals. It amends existing statutes to enhance transparency and responsiveness from insurers, with a specific focus on claims status updates. The bill also includes provisions related to universal life insurance policies, affiliate transactions, and reciprocal insurers.
The bill’s sponsor, Rep. Philip Griffitts R-Panama City Beach, began by explaining that the bill would establish more rigorous oversight by the Office of Insurance Regulation (OIR), requiring insurance companies and their affiliates to submit to greater transparency in their business operations. The bill would require companies to return to the OIR every three years for approval.
Rep. Yvonne Hinson D-Gainesville asked whether the bill would require a “fully reportable report instead of a draft,” and Rep. Griffitts confirmed reported would be required. When asked if the bill would affect consumer premiums, Rep. Griffitts expressed hope it would “reduce premiums and provide more consumer protections.”
A lot of discussion centered on bad faith provisions affecting medical claims processing along with questions related to long-term care policies. You can read more specifics in the full report here.
Rep. Marie Paule Woodson D-Hollywood raised concerns about potential conflicts of interest between insurers and affiliates, as the Committee’s investigation had revealed many affiliates were owned by insurance companies. Rep.Griffitts confirmed the bill addresses this through guardrails, reporting requirements, and transparency measures and approval by the OIR of dividends, checks, and business model changes involving affiliates.
OPPOSITION AND SUPPORT
- George Feijoo, Florida Insurance Council, opposed the bill, arguing it would have a “chilling effect on capital investment” by requiring divided approval for any affiliate of an insurer, even those without direct connection to Florida insurance operations.
- Christopher Ligori, Florida Justice Association, expressed support with reservations, particularly regarding Section One’s “sufficient evidence” language, which he claimed was copied from a previous bill (HB1047) that had raised significant concerns.
- William Lage, Florida Justice Reform Institute, strongly opposed Section One arguing it would effectively undo critical bad faith reforms established in House bill 837 in 2023. He explained that changing “shall” to “may” on line 131 “eviscerates the bad faith protections” and that redefining “sufficient evidence” would create a scenario where insurers could be more easily set up for bad faith claims.
- Rep. Mike Caruso R-Delray Beach, strongly opposed the bill, arguing that the 2023 reforms were already working, with more insurance companies returning to Florida, decreasing lawsuits, falling premiums, and fewer fraud referrals. He specifically criticized the weakening of bad faith provisions, which he believed would allow “billboard trial attorneys to sue gamesmanship and legal tactics.”
- Rep. Hillary Cassel R-Dania Beach, strongly supported the bill, referencing a recent article showing that “14 insurance companies have closed more than 50% of their claims filed in 2024 without payment” despite the 2023 reforms. She criticized insurance companies for opposing transparency while spending millions on advertising and stadium naming rights.
- Rep. Kevin Steele R-Dade City, indicated he would support the bill if the bad faith component were changed.
INSURER AFFILIATE STUDY – TESTIMONY AND DISCUSSION: JAN MOENCK, RISK & REGULATORY CONSULTING
Jan Moenck from Risk and Regulatory Consulting (RRC) joined via web cam from Arizona. Moenck began her opening remarks by explaining RRC’s role in working with state insurance regulators across the county.
During 2020-2022, the OIR engaged RRC to conduct analyses of fees that Florida property and casualty homeowners insurers paid to related parties or affiliates for services. The initial fee analysis involved transactions for a sample of 16 insurers that OIR selected using risk-based analysis to identify insurers with the highest risk of insolvency.
After completion of that analysis, the OIR expanded the analysis to include the remaining Florida domestic homeowners insurance companies. OIR gathered the necessary information from the insurers and RRC completed its analysis and provided deliverable is April 2022.
Moenck explained the framework RRC used to determine whether fees were “fair and reasonable.” The framework examined whether the combined net income of affiliated entities derived from fees paid by insurers exceeded the combined net income of the insurer itself. The data was categorized as follows:
- Where the combined net income of affiliate entities was less than 110% of the insurer’s net income, fees were considered “presumptively fair and reasonable”;
- Where it was 110-115%, additional information would be needed;
- Where it exceeded 115% fees were considered “presumptively not fair and reasonable.”
COMMITTEE MEMBERS’ QUESTIONS
Committee members sought clarification about the study throughout Jan Moenck’s testimony. Moenck was asked if she noticed attributes that might indicate similarities in non-responding companies. Portions of the report indicate $208 million in fee forgiveness and $951 million in capital contributions. Moenck stated that they received vastly different levels of communication from various companies. She confirmed that the report reflected instances where money was provided to holding companies through affiliated fee agreements or dividends, then returned to insurers through fee forgiveness, capital contributions, or surplus notes.
Rep. Adam Anderson, R-Palm Harbor noted that the reports received by the Committee were still in draft format and asked why–Moenck explained that stamping documents as “drafts” reflected RRC’s typical practice when providing deliverables to clients to allow for feedback. She stated that she reached out to the OIR for feedback, but received no requests for additional work or follow-up.
Questions followed about the typical timeline for responding to final drafts, follow-up communications from the OIR, and whether RRC continued to perform recent work for the OIR.
INVESTIGATION TO EXPAND
Subcommittee Chair Yeager, R – New Port Richey announced that Speaker Perez had authorized the Subcommittee to expand its investigation by engaging “the best industry-leading forensic examination firm” to investigate shortcomings in how Florida regulators monitor insurer-affiliate relationships and transfers. Speaker Perez requested recommendations for the forensic accounting process within the following week and indicate the subcommittee would receive additional investigative meeting time later in the Legislation Session.