Universal Insurance reprimanded, fined by Florida regulators
On May 23, Florida regulators slapped Fort Lauderdale-based Universal Property and Casualty Insurance Co., with a $1.26 million fine for a list of legal violations as well as an order to stop those activities termed “anti-consumer.”The fines and reprimand come after a two-year investigation by the Florida Office of Insurance Regulation. Universal has 30 days to pay the fine;however, an appeal is possible.
The violations included canceling policies without providing adequate notice, wrongly denying claims and declaring losses at the parent company but large profits for the affiliate companies.
These problems come just as the stat’s legislature is trying to decrease the number of policies held by Citizens Property Insurance, which is state-run, by moving them to private insurers. Governor Rick Scott just signed legislation to move those policies the day before the announcement of fines against Universal. Universal is the largest private insurer in Florida.
Many people believe the private insurance industry needs more oversight in light of the results of the investigation. Universal was founded in 1997, but its growth mainly came after hurricanes in 2004 and 2005. It took over many policies that were dropped by Allstate, State Farm and Nationwide. Last year, policyholders paid $765 million in premiums to Universal.
The problems started when Universal looked for any reason to avoid paying claims and to cancel policies. While this was the largest and most serious offense according to the Florida insurance consumer advocate, the way the parent company reported its financial losses is an indicator of industry-wide problems.
Universal’s affiliate companies reported above-average profits, while the parent company reported losses. The parent company, though, paid millions to the affiliate companies in contract fees to handle the company’s business. The insurance consumer advocates say this is one area that definitely needs more oversight because it could easily be exploited.
If your insurance company has denied a claim and you feel the claim is valid, contact an attorney that specializes in insurance disputes. You could receive financial compensation in a civil action against your insurance company.
Source: ocala.com, “http://www.ocala.com/article/20130530/ARTICLES/130539948?p=4&tc=pg&tc=ar,” Zac Anderson, May 30, 2013.