Maxwell: Floridians forced onto Slide Insurance while CEO gets $21 million
Let's start today with a flashback look at a trio of headlines.
The first comes from a column I penned last year: 'Florida homeowners become Slide customers — whether they want to or not.' That piece detailed Florida's policy of forcing customers off the state-run Citizens Insurance program onto a relatively new, Tampa-based company called Slide Insurance, usually at higher rates.
I had a lot of questions about this, as it struck me as a shady and extremely consumer-unfriendly practice. Other consumer advocates and even some insurance executives had questions as well.
Florida homeowners become Slide customers — whether they want to or not | Commentary
Now let's look at our second headline, one the South Florida Sun Sentinel produced just last week: '$50 million pay package for Florida insurance company's leading execs draws criticism.'
It probably won't surprise you to learn that company here is, once again, Slide. Another industry publication reported that CEOs of other Florida companies that benefited from the state's 'depopulation' practice are also now enjoying compensation packages worth as much as $20 million.
And finally, here's the third headline from a column I penned earlier this year: 'You got conned. Home insurance costs still rising in Florida.'
That piece noted that, on the heels of Florida lawmakers passing what they billed as insurance 'reform' — which mainly consisted of shielding the industry from lawsuits — consumer costs were still rising. As the Sun Sentinel had reported, the average insurance premium in Florida increased for nine consecutive quarters after Gov. Ron DeSantis signed the first 'reform' measure into law.
So now let's put all these stories together:
Lawmakers forced more than 100,000 Floridians to become customers of private insurers and made it harder for homeowners to sue insurance companies.
Neither of those things brought rates down. To the contrary, they continued to rise.
But there is at least one group of people who seem to be thriving in Florida's newly 'reformed' insurance market — the CEOs.
That is Florida's version of 'reform.'
$50 million pay package for Florida insurance company's leading execs draws criticism
It's worth noting that it's not just Florida journalists and consumer advocates who are taken aback by Florida's new enrich-the-CEOs marketplace. The nationally respected Insurance Journal reported last week that the industry's own insiders were aghast.
The piece — entitled 'Size of Florida's Slide Insurance Exec Compensation Has Tongues Wagging' — quoted one insurance executive as saying: 'Capitalism is a great system, but this is out of control.'
When even the insurance execs think the system is grossly tilted in favor of the profiteers, there are serious problems.
You can read all these pieces for full details. But here's a quick summary: A) Slide reported a $21 million compensation package for CEO Bruce Lucas last year and $50.3 million over the last two years for Lucas and his COO wife. B) Slide declined to comment on its executives' pay, but the Journal reported that this start-up Florida company was paying its CEO about as much as some national insurers paid their CEOs. C) State regulators say that they can't control salaries; that homeowners forced onto private companies can choose another company (if they can find one) and that the state's market is healthier since there are now more companies doing business here.
Still, the bottom line is that virtually none of what lawmakers have done has reduced costs for homeowners. Your rates were sky-high three years ago, and most have only gone up since.
That's because the primary plank in the Republican-drafted-and-approved version of insurance 'reform' was to make it harder for homeowners to sue their insurer — even if an insurer improperly denies you of benefits to which you're entitled.
The theory was that, if the state saved the companies legal costs, the savings would trickle down to consumers. Except what fails to trickle down to the politicians who espouse this chamber-of-commerce talking point is reality. Companies don't have to give you a nickel's worth of savings unless they want to or unless it's required.
As I've said for years, this state is geographically designed to be an expensive place to live; a hurricane-prone peninsula surrounded by rising floodwaters. So if lawmakers really want to make this state more affordable, they're going to have to make serious investments in subsidies, either for the state's Citizens program or for private companies.
But any financial gifts to the industry have to be accompanied by legislative demands that the companies also lower rates.
Trickle-down theories are often just a bunch of baloney — as evidenced by the nine consecutive quarters of increased costs Floridians faced after they were promised relief.
You got conned. Home insurance costs still rising in Florida | Commentary
If you want to see something different, you need to elect different people — lawmakers who won't pass any kind of 'reform' unless it is accompanied by lock-solid guarantees that your rates will drop.
And if you feel like letting your lawmakers know that's your plan, you can find their contact info at www.leg.state.fl.us
smaxwell@orlandosentinel.com
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