How Florida fights to hide insurers’ finances

As Florida legislators debated sweeping reforms in 2022 to rescue the state’s property insurance industry, state regulators sat on a secret report that showed many insurers were bleeding cash on paper while shifting millions to sibling companies whose profits have remained secret.

The state successfully kept these explosive, company-by-company details hidden from the public — until the Orlando Sentinel and South Florida Sun Sentinel obtained the unredacted data this summer. Now, in a bid to keep the findings buried, the Florida Senate is threatening the news organizations with “civil or criminal legal implications” if they refuse to immediately shred the evidence.

The report shows exactly what the state is fighting to protect.

In it, a consultant concluded that 20 property insurers were paying their affiliated companies fees that it deemed exceeded Florida’s legal standard of “fair and reasonable.” The list included leading insurers like Clearwater-based Heritage Property & Casualty Insurance Co. and Fort Lauderdale-based Universal Property & Casualty Insurance Co., the report shows.

It also flags three insurers that collapsed entirely – Gulfstream Property and Casualty Insurance Co., Avatar Property & Casualty Insurance Co., and FedNat Insurance Co.. All three failed the test devised by Connecticut-based Risk & Regulatory Consulting, LLC, a firm that had long worked closely with the Florida Office of Insurance Regulation.

Overall, excluding several outliers, insurers claimed $432 million in losses while paying fees to their affiliates that generated $1.3 billion in net income from 2017 to 2019, according to an analysis of the consultant’s examination of 53 property insurers with prominent positions in Florida’s market.

After learning earlier this week of the Senate’s disclosure of that information in response to a public records request, the Senate’s general counsel, Tom Thomas, demanded the news organizations destroy the records, writing they were inadvertently released and “contain sensitive, proprietary trade secrets.” He wrote that any further use of the records would be a third-degree felony under Florida law.

The news organizations acquired the documents as part of a yearlong investigation into Florida’s property insurance market. The resulting series, dubbed “Uncovered,” launches in the coming weeks and includes a deeper look at insurers’ payments to their affiliates.

First Amendment advocates, as well as the news organizations’ top editors, said the Senate’s demand was a dramatic overreach.

“We obtained these records legally and appropriately through the state’s public records process,” Gretchen Day-Bryant, executive editor of the Sun Sentinel, and Roger Simmons, executive editor of the Orlando Sentinel, said in a joint statement. “The First Amendment guarantees our right to publish these findings, and we will not allow the Florida Senate’s threats to prevent us from reporting. Homeowners deserve to know this important information that hits their pocketbooks.”

Once a governmental body releases information pursuant to a lawful request by the public, the “cat is literally out of the bag,” said Ken Paulson, director of the Free Speech Center at Middle Tennessee State University.

“The press has a full First Amendment right to use their knowledge in reporting on matters of public interest,” he said.

The effort to keep the analysis secret has drawn sharp criticism from critics as the latest in a long line of Florida government attempts to protect and bolster insurers.

“Who are we trying to protect here — the giant property insurance companies, or ratepayers and our constituents?” said state Sen. Carlos Guillermo Smith, D-Orlando, who has pushed legislation to require broader public disclosure of financial information insurers use to justify rate hikes, including all transactions between an insurer and any affiliate.

The records acquired by the Sentinel and Sun Sentinel expand and detail the broad findings in an executive summary of the report, which was commissioned by the state Office of Insurance Regulation (OIR) in 2020 and 2021 at a cost of about $150,000 and was first obtained by the Miami Herald and Tampa Bay Times in 2025.

Those outlets waited two years after their public records request for the state agency to release that portion of the report. The documents they received contained no information about the individual practices of the 53 insurers reviewed — details which are included in the full report released this summer by the Senate.

That earlier revelation sparked hearings in the Florida House and outrage from some lawmakers. They said the findings had been hidden from them as they approved sweeping financial and legal reforms that benefited the insurance industry in 2022-23.

State Insurance Commissioner Michael Yaworsky told a House committee in 2025 that the report was an unfinished draft, and has deepened his criticism in recent statements to the Sentinel and Sun Sentinel, branding the consultant’s work as flawed and outdated, and containing “a great deal of errors, inconsistencies, data validation issues and antiquated information.” His state Office of Insurance Regulation has declined the news organizations’ request to detail the alleged inaccuracies, claiming it would require the disclosure of protected data.

However, in an interview in August, Yaworsky also said he understands the concern about affiliate payments.

“We want more accountability in this space, but it’s a really interesting question because of the perception of like almost a conflict of interest among the investor class that at that point they’re able to game the system to get undue earnings when people are paying more for insurance,” he said. “I totally get that. And I think we’ve done a lot in that space to bring it under control, make sure there’s confidence in it, but we continue to pursue for more.”

With support from OIR, the Florida House passed bills earlier this year increasing oversight of affiliate payments and boosting consumer transparency of insurer finances. But those measures died in the Senate.

The practice of using — and paying — affiliated companies to perform certain services is legal under Florida law and has long been accepted in the insurance industry. Companies argue it is more efficient to use separate entities to oversee claims processing, for example, or to manage certain functions of their operations.

But consumer advocates have worried that the affiliate structure can allow insurers to hide income as they seek state approval of rate increases, and some suggest affiliates should be paid only on a fee-for-service basis.

The consultant’s study found that few, if any, state and regional insurers employ a fee-for-service approach, instead often paying their affiliates a set percentage of the premiums they collect from policyholders.

Insurers’ affiliated managing general agents (MGAs), which administer policy and claims operations, had agreements that charged from 20% to 34% of premium, according to the report. Total affiliated fees, including the MGA, claims, commissions, and investment management, reached as high as 63%, the report found.

Florida law requires only that such payments be “fair and reasonable,” a common term in such analyses which often is not well-defined, and particularly so in the state’s statutes.

In its examination of the “fair and reasonable” standard, the consultant compared the insurers’ net income, which is public, to their affiliates’ net income, which typically is not disclosed and which at least some insurers assert is a trade secret, the consultant said. The consultant said it based its determinations on Florida law but also on a number of other factors, including analysis of fair and reasonable thresholds by the National Association of Insurance Commissioners.

Insurers have frequently relied upon trade secret claims under Florida law to block the public’s access to information about how they handle their finances, the Sentinel and Sun Sentinel reported in an article earlier this year.

The consultant determined that 19 of the 35 state and regional insurers it examined at the request of OIR paid affiliate fees that presumptively were not fair and reasonable. But it concluded only one of the 18 national insurers did so, although it said it was unable to make determinations about many national insurers and some state insurers because of a lack of information.

Among the additional details in the report:

Yaworsky and others have also argued that the consultant’s report was conducted at a tumultuous time for the insurance industry, when many companies were incurring legitimate losses.  Numerous insurers claimed that widespread contractor fraud, frivolous lawsuits and heightened claims after multiple hurricanes left them operating at a loss in the state.

Universal Property & Casualty and American Platinum’s losses “must be viewed in the context of Hurricane Irma and the significant claims activity that followed,” company spokesman Travis Miller said in a statement.

“The insurers’ parent organization subsequently contributed nearly $400 million to support the insurers’ financial strength, substantially exceeding the $166 million mentioned, and those contributions helped position the insurers to remain active participants in Florida’s improved market, where they continue to write new business and have filed their third consecutive annual rate decrease,” he said.

Heritage company officials did not respond to a request for comment on Friday.

In response to the industry’s woes, the state Legislature and Gov. Ron DeSantis enacted a series of laws that made it harder for policyholders to file lawsuits challenging claim denial and underpayments.

GOP leaders today insist those laws have had much success in improving Florida’s insurance market. Since the sweeping tort reform, 21 additional property insurers have entered Florida’s market. Rate filings for 2024 showed a downward trend for the first time in years, which has continued into 2026, according to the Florida Office of Insurance Regulation.

But questions about the industry’s financial accounting have continued.

The news organizations originally requested the full consultant’s report, known as an Affiliated Fee Analysis, from OIR in February of this year, and made a broader request to the Florida Senate for legislative emails in April.

One of those emails, provided to the news organizations in July, included PDF attachments of the entire analysis. OIR had sent them on Feb. 24, 2025, to a Senate staffer in response to his request to view them.

OIR provided a heavily redacted copy of the report in late August, justifying the redactions with citations from Florida statute including the state’s trade secret law. The news organizations informed OIR on Monday that they had acquired the full report, and challenged the legal basis of the redactions. The Senate’s demand to destroy the report arrived by email the next day.

Under a “mandatory demand for compliance” heading, Thomas told the Sun Sentinel reporter who made the request in July to immediately cease all use of the documents. He also demanded that the newspapers destroy or “shred” all copies, notify any third parties that may have obtained copies to destroy them, and certify their “destruction” within 48 hours

Thomas acknowledged the Senate released the report as part of an “extremely large response” to a public records request for legislative emails but attributed its release to an “inadvertent administrative oversight.”

“Because you are now on notice regarding the exempt and confidential nature of these documents, failure to immediately comply with the following actions may result in civil or criminal legal implications,” he wrote.

But Barbara Petersen, CEO of the Florida Center for Government Accountability, said the Senate cannot compel the destruction of information it released, even if in error.

“It is an attempt to chill and intimidate,” she said.

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