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Insurer to Pay $1 Million Over Ian Claims

The state reviewed claims to Heritage Property & Casualty Insurance following Hurricane Ian and found the company violated Florida insurance laws.  

TALLAHASSEE, Fla. — A property-insurance company has agreed to pay a $1 million fine after a state review found it violated claims-handling requirements following Hurricane Ian, according to an order signed Thursday by Florida Insurance Commissioner Michael Yaworsky.

The order and a report issued in March said Heritage Property & Casualty Insurance Co. violated state insurance laws, including by not promptly acknowledging that it received communications about claims, not paying or denying claims within a 90-day timeframe and not maintaining complete claims records.

The March report said the state Office of Insurance Regulation contracted with a firm, The INS Companies, to review Heritage claims from Sept. 28, 2022, to Feb. 28, 2023. The Category 4 Hurricane Ian made landfall in Southwest Florida on Sept. 28, 2022, and continued causing widespread damage as it crossed the state.

The findings of the report led to what is known as a consent order, signed by Yaworsky, that included Heritage agreeing to pay a $1 million fine. The order and the report are posted on the Office of Insurance Regulation website.

The review involved samples of Heritage claims from the period after Ian. Among the findings in the March report:

— In 98 out of 324 claims reviewed, Heritage did not acknowledge receiving communications about claims within a 14-day period, as required by law at the time. State lawmakers later reduced the review period to seven days.

— In 70 out of 324 claims reviewed, Heritage did not pay or deny claims within a required 90-day timeframe.

— In 10 out of 324 claims reviewed, Heritage did not maintain complete claims records.

Other findings in the report included issues such as adjusters not providing required identification and license information to policyholders after inspecting properties; Heritage not properly calculating interest owed to policyholders in certain situations; and Heritage not providing a required “Homeowner Claims Bill of Rights” to some policyholders.

Heritage CEO Ernie Garateix said in a statement Thursday that the company "fully complied" with the state review, which is known as a market conduct examination.

"We also informed OIR (the Office of Insurance Regulation) that many of the same concerns they identified were also flagged internally and we have already taken significant action to address those concerns in order to better serve our policyholders," Garateix said.

The statement listed a series of changes made at the company. For example, it said Heritage has created a "governance and compliance director" position to ensure compliance with claims requirements. Other examples include new claims-management software and changes to ensure adjusters meet requirements.

“Our message to our policyholders is simple: We are committed to excellence and will never stop striving to improve," Garateix said in the statement.

The March report and the consent order do not detail how many overall claims Heritage received because of Ian damage. Industrywide, 558,299 residential-property claims and 33,010 commercial-property claims had been reported from Ian as of last month, according to Office of Insurance Regulation data.

Like other property insurers, Heritage during the past few years has significantly reduced its number of policies in Florida amid a turbulent market.

Heritage’s parent company, Tampa-based Heritage Insurance Holdings, Inc., said last week in U.S. Securities & Exchange Commission filings that it had 147,954 policies in Florida during the first quarter of this year, down from 172,425 a year earlier.

A November 2022 news release said Heritage had 188,343 policies in Florida as of Sept. 30, 2022 — about the same time as Ian hit. That was down from 228,572 policies a year earlier.

Heritage also does business in several other states. The Securities and Exchange Commission filings said the company had 289,001 policies in the other states during the first quarter of this year.

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