About the Office of Insurance Regulation. About the Insurance Commissioner

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2 About the Office of Insurance Regulation The Florida Office of Insurance Regulation (Office) has primary responsibility for regulation, compliance and enforcement of statutes relating to the business of insurance and the monitoring of industry markets. The Office pursues its mission of public protection via oversight of insurance company solvency, policy forms and rates, market conduct performance and monitoring new company entrants into the Florida market. About the Insurance Commissioner Kevin M. McCarty has served as an insurance regulator since 1992 and became Florida s first appointed insurance commissioner in January Commissioner McCarty was appointed by the Financial Services Commission, which is comprised of the Governor and Florida Cabinet. The Commissioner leads a multi-state, multiagency effort to evaluate claim settlement practices, use of the U.S. Social Security Administration s Death Master File, and compliance with unclaimed property laws for life insurance/annuity companies. He has also has been instrumental in the formation of the Non-Admitted Insurance Multi-State Agreement (NIMA) designed to equitably distribute surplus lines taxes. In January 2012, Commissioner McCarty began his yearlong term as President of the National Association of Insurance Commissioners (NAIC). Florida participates on 28 NAIC committees, task forces and working groups. The Commissioner continues to focus on stabilizing Florida s property insurance market and enhancing the state s presence in the international financial market. In October 2012, he was elected as a vice chair of the International Association of Insurance Supervisors (IAIS) Executive Committee and serves on the Technical Committee, ComFrame Oversight Task Force, as well as, the Joint Forum (a group of international regulators from the insurance, banking and securities sectors). Commissioner McCarty received his bachelor s degree and Juris Doctor from the University of Florida. 1

3 Resources: Office of Insurance Regulation Fiscal Year Full-Time Employees 283 Total Budget* $27,241, % of the budget is derived from the Insurance Regulatory Trust Fund. *FY budget includes a special appropriations category of $4,926,463 in budget authority for the outsourcing of financial examinations. The Insurance Regulatory Trust Fund acts as a passthrough and insurers pay the cost of the examination to the Trust Fund; therefore, it is revenue neutral. Operating Costs (Fiscal Year ) Regulatory and Enforcement 94% Administration 6% Position Allocation (Fiscal Year ) Regulatory and Enforcement 93% Administration 7% Revenue Collected (Fiscal Year )* Insurance Premium Tax** $704,800,000 Fees $1,925,148 Penalties/Fines $7,797,025 **Insurance premium taxes are collected by the Florida Department of Revenue. 2

4 Insurance and Related Entities As of June 30, 2012 The Office has oversight of 4,091 total insurance and related entities, of which 154 are new entities (excluding advisory and rating organizations). New Entities Total Entities Property & Casualty Life & Annuity Health 4 72 Fraternal 1 37 Title 0 20 Other* 131 2,350 Citizens Property Insurance Other Residual Markets ** Surplus Lines Overview of Insurance Premium in Florida Calendar Year 2011 Admitted Property & Casualty $33,461,169,198 Life & Annuity $42,452,696,714 Health $28,314,410,510 Fraternal $ 365,683,875 Title $ 720,516,165 Other* $ 234,054,286 TOTAL $105,548,530,748 Citizens Property Insurance $ 3,084,341,549 Other Residual Markets** $ 18,304,140 Surplus Lines Market $ 3,688,680,187 Total Written Premium $112,339,856,624 *Other is specialty companies and entities that do not file with the NAIC. **Residual markets are entities that sell coverage for consumers who cannot obtain coverage through private companies in Florida. 3

5 Florida Domestic Insurance Companies & Related Entities As of June 30, 2012 Authority Category Authorities Continuing Care Retirement Communities 46 Health Maintenance Organizations 38 Life & Health Insurers 20 Motor Vehicle Service Companies 63 Premium Finance Companies 54 Property & Casualty 122 Risk Purchasing Groups 50 Self-Insurance Funds 217 Service Warranty Associations 69 Third Party Administrators 94 Other* 389 Total Domestic Authorities** 1,162 Total Domestic Companies 1,112 * The Other category includes 276 donor annuities. ** Companies are given authority to write multiple kinds of insurance (e.g., a company may simultaneously be a Health Maintenance Organization and a Third Party Administrator). Therefore, the number of authorities exceeds the number of companies. 4

6 Enforcement Actions Fiscal Year Financial/Regulatory Certificates of Authority Suspended 8 Certificates of Authority Revoked 8 Administrative Fines/Fees Life & Health Product Review $ 0 Property & Casualty Product Review $ 66,000 Specialty Product Administration $ 74,850 Market Conduct/Investigations $ 5,926,058 Life & Health Financial Oversight $ 91,500 Property & Casualty Financial Oversight $ 42,150 Surplus Lines Late Filing Fees $ 4,500 Bad Check Service Fees $ 165 Attorneys Fees $ 1,591,802 Total Administrative Fines/Fees $ 7,797,025 Total Consumer Refunds* $ 41,979,887 Public Hearings Rate Hearings 11 Rule Hearings/Workshops 5 Other Hearings 1 *Consumer refunds represent monies returned to consumers due to activities of the Market Investigations Business Unit, as well as excess profits and rate refunds. 5

7 Regulatory Activities Fiscal Year Financial Reviews (Desk Audits) Life & Health 2,648 Property & Casualty 4,655 Specialty 1,440 Market Conduct Market Conduct Examinations 69 Market Conduct Investigations 1,021 Financial Field Examinations Life & Health 36 Property & Casualty 44 Specialty 8 Form and Rate Filings Processed Business Unit Files Time to Process Life & Health 6, Days Property & Casualty 8, Days Total 14,686 Average 42 Days Applications Statistics In Fiscal Year , the Office processed 554 company applications in an average of 37 days. These applications were either approved, denied, withdrawn or deemed incomplete. In addition, 744 investigations of Officers and Directors were completed in an average of 111 days. 6

8 Top 20 Personal Residential Writers in Florida Policies as of December 31, 2011 Policies 1. Citizens Property 1,423, Universal Property & Casualty 578, State Farm Florida 453, St. Johns Insurance 174, Security First 147, USAA 142, Castle Key Indemnity (Allstate) 131, Castle Key Insurance (Allstate) 127, Homeowners Choice 122, ASI Assurance 113, Florida Peninsula 112, American Integrity 106, Tower Hill Prime 104, American Bankers 96, United Property & Casualty 95, Florida Family 87, ASI Preferred 78, Tower Hill Signature 78, Universal Insurance 76, Southern Fidelity 74,556 Source: QUASRng, Florida Office of Insurance Regulation 7

9 Top 20 Personal Automobile Writers in Florida Premium for Calendar Year 2011 (Premium in millions) 1. State Farm Mutual $ 2, GEICO General $ 1, Progressive American $ Progressive Select $ GEICO Indemnity $ Allstate Fire & Casualty $ Allstate Insurance $ Allstate Property & Casualty $ Government Employees $ United Services Auto. (USAA) $ Travelers Home & Marine $ USAA Casualty $ st Century Centennial $ Security National $ Safeco Ins. Co. of Illinois $ Liberty Mutual $ United Automobile $ Direct General $ Metropolitan Casualty $ Southern Owners $137 Source: National Association of Insurance Commissioners I-Site. Premium is direct premium written and includes private passenger auto, other auto liability and auto physical damage. 8

10 Life & Annuity Writers in Florida Premium for Calendar Year 2011 (Premium in millions) 1. MetLife Investors USA $2, Pruco Life $1, Lincoln National Life $1, Jackson National Life $1, John Hancock Life $1, Transamerica Financial Life $1, Nationwide Life $1, Metropolitan Life $ Transamerica Life $ Allianz $ 942 Accident & Health Writers in Florida Premium for Calendar Year 2011 (Premium in millions) 1. Blue Cross & Blue Shield $6, UnitedHealthcare Ins. $5, Humana Medical $4, Aetna Health Inc. $1, AvMed $1, UnitedHealthcare of Fla. $1, WellCare of Fla. $1, CarePlus Health Plans $1, Connecticut General Life $ Coventry Health Care $ 819 Source: National Association of Insurance Commissioners I-Site 9

11 2011 World/States Premium Volume Rank Country/State Premium in billions 1. Japan $ United Kingdom $ France $ Germany $ PR China $ California $ Italy $ New York $ South Korea $ Canada $ Netherlands $ Florida $ Texas $ Pennsylvania $ Australia $ Spain $ Taiwan $ Brazil $ India $ Switzerland $ 63.5 The United States has the most premium in the world at $1.658 trillion; this list features state premiums, therefore, the United States is excluded. Source: National Association of Insurance Commissioners (NAIC) 10

12 200 East Gaines Street Tallahassee, Florida th Edition December 2012 Department of Financial Services Consumer Help Line (in-state) (out-of-state)