A sensational newspaper article alleging bad deeds by Florida insurance companies is prompting the Florida House of Representatives to look into the relationship between companies and their Managing General Agents (MGAs) and affiliated companies. The Tampa Bay Times reported the companies diverted billions of dollars to affiliates while claiming to lose money from hurricanes, based on the newspaper’s reading of a regulator’s draft report.

Former Florida Deputy Insurance Commissioner Lisa Miller reveals the inadequacies of the article and its misleading and incomplete portrayal of the market and regulation. She’s joined by a veteran Florida insurance agent who explains how MGAs and affiliates function, the financial dynamics of the insurance market, and the consumer safeguards built into the system.

Show Notes (For full Show Notes, visit https://lisamillerassociates.com/episode-56-florida-property-insurance-facts-vs-fear/ )

Allen McGinniss is a licensed Florida insurance agent and the principal of the McGinniss Himmel Insurance Agency, based in Tallahassee, Florida. He began his insurance career 20 years ago as a State Farm agent before transitioning to an independent agent and co-founding his agency in 2015. He explained what Managing General Agents (MGAs) are and the crucial role in the insurance industry by performing essential administrative tasks for insurance companies. These tasks include:

• Underwriting: Assessing and evaluating risks to determine appropriate coverage and premiums.
• Claims Management: Handling the process of claims from filing to settlement.
• Policy Issuance: Managing the issuance and renewal of insurance policies.

Why Are MGAs Important?

MGAs help streamline operations by providing specialized knowledge and services that insurance companies may not handle internally. McGinniss said they can either operate within an insurance company or function independently. This flexibility allows insurance companies to:

• Respond Quickly to Market Changes: MGAs enable companies to adapt to evolving market conditions efficiently.
• Manage Claims Effectively: By leveraging the expertise of MGAs, insurance companies can ensure that claims are processed promptly and fairly.

The Tampa Bay Times Article

The Tampa Bay Times published an article on February 22, 2025 titled Florida insurance companies steered money to investors while claiming losses, study says. Its reporting was based on a draft of a 2022 consultant’s study for the Florida Office of Insurance Regulation (OIR) for the time period of 2017-2019. According to the article, “While Florida insurers claimed to be losing money in the wake of hurricanes Irma and Michael, their parent companies and affiliates were making billions of dollars.” It reported that the previously unreleased study’s summary “reveals that as the industry was ailing and companies were losing money, executives distributed $680 million in dividends to shareholders while diverting billions more to affiliate companies,” which included MGAs.

McGinniss argued that the... (For full Show Notes, visit https://lisamillerassociates.com/episode-56-florida-property-insurance-facts-vs-fear/ )