Two new property and casualty insurers, Stand Insurance Exchange and Praxis Reciprocal Exchange, have been approved to operate in Florida, marking the 16th and 17th new entrants since recent legislative reforms. This expansion is seen by officials as a positive step towards increased competition and potentially lower rates for homeowners. However, a recent report casts doubt on the overall effectiveness of these reforms, suggesting they may have had unintended negative consequences.
Key Takeaways
- Two new insurance carriers, Stand Insurance Exchange and Praxis Reciprocal Exchange, have entered the Florida market.
- These companies are approved to offer coverage for fire, homeowners multi-peril, allied lines, inland marine, and other liability.
- Their entry brings the total number of new insurers to 17 since recent legislative reforms.
- A new report questions the success of Florida’s insurance reforms, citing an increase in claims closed without payment and lawsuits.
New Insurers Boost Competition
Chief Financial Officer Blaise Ingoglia and Insurance Commissioner Mike Yaworsky announced the approval of Stand Insurance Exchange, based in Tallahassee, and Praxis Reciprocal Exchange, based in Tampa. Both companies are authorized to write various types of insurance policies in Florida. Officials believe that the influx of new companies will foster greater competition, which in turn can help drive down insurance rates for Florida homeowners. Both Stand and Praxis have indicated plans to assume approximately 25,000 policies each from Citizens Property Insurance Corporation in December, a move aimed at further depopulating the state-backed insurer.
Reform Effectiveness Questioned
Despite the positive news of new market entrants, a report from Weiss Ratings raises concerns about the efficacy of Florida’s recent insurance reforms. The report suggests that the reforms may have backfired, leading to an increase in claims being closed without payment and a rise in related lawsuits. Data indicates that non-payment closed claims rose by 17% between 2022 and 2024, while lawsuits stemming from such claims increased by 4%. According to Weiss Ratings founder Martin Weiss, the tort reform intended to reduce litigation has had the opposite effect. The study found that the percentage of claims closed without payment by insurers in Florida increased from 40% in 2022 to 46.7% in 2024, with policyholders resorting to legal action more frequently.
Official Response and Future Outlook
Supporters of the reforms highlight the entry of new companies and decreasing rates as evidence of market improvement. Chief Financial Officer Blaise Ingoglia stated his commitment to holding insurance companies accountable, emphasizing that his primary role is to protect policyholders, not the profits of insurance companies or trial attorneys. The ongoing developments suggest a dynamic and evolving insurance landscape in Florida, with continued efforts to stabilize the market while addressing the concerns raised by recent analyses.
Sources
- These are the 2 new insurance carriers in Florida, WPTV.
- Florida’s insurance reforms ‘backfired,’ according to new report, WPTV.