Jerry Theodorou, the Policy Director for Finance, Insurance, and Trade at the R Street Institute, has stated that Florida's insurance market has reaped benefits from legislative reform measures such as capping attorney's fee awards. These measures have led to a reduction in the volume of "unmerited litigation" within the state. Theodorou made this statement in a commentary on April 4.
"Reform legislation took direct aim at the cause of Florida insurance market travails—mountains of unmerited litigation brought by billboard lawyers working in cahoots with unscrupulous contractors shaking down insurance companies," said Theodorou. "The numbers tell the story: At the peak of its crisis Florida was home to 9 percent of the country's homeowners' insurance policies and homeowners' property losses, yet it had 79 percent of the entire country's homeowner insurance lawsuits."
According to Adams and Reese LLP, HB 837, which was signed into law last year, introduced several reforms aimed at stabilizing Florida’s insurance market. This legislation imposed limits on bad faith claims against insurance providers and on attorney’s fee awards. Adams and Reese suggested that these reforms would benefit both plaintiffs and insurers.
Theodorou further noted that when Governor Ron DeSantis signed HB 837 into law, Florida’s insurance market was on "life support." Several insurance providers had exited the state while others had become insolvent. The remaining private insurers were compelled to raise rates to keep up with policyholder claims. Consequently, many state residents resorted to the state-run Citizens Property Insurance Company, which was intended to be an "insurer of last resort."
"The situation now is much better," said Theodorou. He highlighted new capital entering the market, a decreasing reliance on Citizens Property Insurance Company, and a shift towards profit in the homeowners' insurance market after seven years of losses. He attributed these positive changes to the reforms in HB 837 which attracted several new insurance providers to Florida, reduced homeowner insurance lawsuits and stabilized rates.
Florida Insurance Commissioner Mike Yaworsky anticipates that rate stabilization will continue benefiting consumers throughout the next year as reported by Insurance Insider US. He expects that fewer Floridians will rely on Citizens as more insurers establish their presence in Florida. Yaworsky mentioned that leading insurance providers such as State Farm have publicly confirmed their commitment not only to remain in Florida but also expand their business. "We’re moving in the right direction," Yaworsky stated.
According to the R Street Institute's website, Theodorou develops free market public policy solutions for the organization. He has testified before Congressional committees on insurance issues five times in the past two years. Prior to his role at R Street, Theodorou was employed at the global insurance firm American International Group.