Florida lawmakers may undo 2020 law that shielded the records of failed insurers

As Florida’s insurance crisis was unfolding in 2020, Florida Chief Financial Officer Jimmy Patronis moved to shield some detailed information about failed insurers from the public.

Legislation he pushed that year made information on executives’ compensation, corporate governance and risk assessments exempt from public records requests when the companies went out of business and were taken over by state regulators.

Now lawmakers are looking to put that information back in the sunshine.

In a rare move, a House committee on Tuesday advanced a bill that would repeal some of those public records exemptions. The results could shed more light on why and how companies go out of business.

Insurers’ own risk and solvency assessments — mandatory reports created after the 2008 financial crisis that insurers use to determine their financial weaknesses — would be available for public inspection.

So would their underwriting files, along with the names, benefits and compensation of executive officers.

Rep. Linda Chaney, R-St. Pete Beach, said her committee was narrowing the exemptions because of concerns over the “integrity of the insurance market.”

“To me, it’s important that we have transparency in government and that the public has got access to the information that they need,” Chaney said.

Why those records were made secret to begin with is not clear. They were tucked into HB 1409, passed in 2020 as insurance companies in Florida were on increasingly shaky ground.

It was pitched as consumer-friendly legislation. Most of the bill focused on exempting consumers’ claims data from public records requests. That information was already not public for active companies but wasn’t explicitly exempted for failed ones.

Insurance companies often have thousands of outstanding claims when they go out of business.

The bill also made secret all employee files from the failed company.

“Without passage of this bill, that disclosure of that information — that personal disclosure — could lead to theft and fraud,” then-Rep. Michael Grant, R-Port Charlotte, told a House committee at the time, although he gave no examples of that happening.

The 2020 legislation sailed through committees without any questions asked. The only lawmaker to vote against it was Sen. Joe Gruters, R-Sarasota.

He said in a text message Tuesday that he was proud to be the lone “no” vote, while noting that Floridians typically foot the bill for failed companies’ outstanding claims.

“Sunshine is the best policy. We should have never passed that bill in the first place,” Gruters said. “There’s no reason to protect those who left taxpayers on the hook.”

Under the bill that advanced Tuesday, employee files, aside from those of executives, would still be secret, as would policyholders’ personal information.

Patronis’ office is responsible for taking over insolvent companies. Spokesperson Devin Galetta said he would support the House’s bill.

“While the CFO supports vital public records exemptions for policyholders’ personal information, he would support the Legislature in rescinding exemptions for an insurer’s executive-level payroll information,” Galetta said in a statement.

The 2020 bill was sponsored in the Senate by now-Senate President Ben Albritton, R-Wauchula. The consumer protections were “important” to him at the time and still are, spokesperson Katie Betta said.

The Senate has its own bill renewing the records exemptions in full.

“The President would like to look at narrowing the exemption as the bill moves forward,” Betta wrote.

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