- Florida Insurance Commissioner Michael Yaworsky expressed strong opposition to the Federal Insurance Office’s (FIO) proposed data collection on climate-related financial risks in a letter to U.S. Treasury Secretary Janet Yellen.
- Yaworsky criticized this as a federal overreach, undermining state authority in insurance regulation and failing to consider the proprietary aspects of Florida’s insurance landscape.
- Yaworsky specifically critiqued the FIO’s methodology for being too narrow, focusing primarily on data from the state-owned Citizens Property Insurance Corporation and neglecting the broader state insurance market.
- He argued that the six-year data timeframe requested by FIO is insufficient to accurately reflect the dynamics of Florida’s insurance industry and that using Citizens’ data disproportionately could lead to skewed results.
Florida Insurance Commissioner Michael Yaworsky, in a letter to U.S. Treasury Secretary Janet Yellen, voiced objections to the Federal Insurance Office’s (FIO) proposed data collection on climate-related financial risks.
In the letter, Yaworsky criticized the “federal intrusion” into a realm traditionally regulated by states, citing the McCarren-Ferguson Act of 1945’s recognition of state authority in insurance regulation. The commissioner further drew attention to Florida’s distinctive insurance landscape, which includes a state-specific catastrophic fund and a public insurer, arguing that the federal approach overlooks specialized state solutions.
“For nearly 80 years, it has been universally recognized that insurance is a critical part of each state’s economy, with direct consumer impacts varying greatly from one state to another. The risks, underwriting, and market participants in each state’s market are not uniform, but instead representative of the demography and geography of each state.” wrote Yaworsky. “The proposed data call is not just federal overreach, but it is also a flawed process for collecting the information FIO claims it needs to examine climate change.”
Yaworsky also critiqued the FIO’s request for just six years of data, which he argues is too short of a timeframe to accurately capture the dynamics of the state’s insurance industry. Moreover, he criticized the data collection methodology for focusing on a small number of market players, primarily the state-owned Citizens Property Insurance Corporation, and overlooking the broader diversity of Florida’s insurance market.
“Citizens operates under statutory and regulatory limitations and underwrites risks not typically taken in the admitted or surplus lines market, often at a lower cost than what is actuarily sound,” Yaworsky said. “Using Citizens’ data in this skewed proportion will lead to inaccurate representations of Florida’s market and fail to capture private market coverage.”
Last week, the U.S. Senate Budget Committee, led by Sen. Sheldon Whitehouse, probed Citizens amid concerns over its financial resilience in the face of escalating climate risks. The inquiry, outlined in a letter sent last Thursday, is part of a broader effort to assess the impact of climate change on the insurance industry referenced by Yaworsky.
The committee has requested Citizens to provide data on its exposure to extreme hurricane scenarios, its future market share projections, assets, and its ability to pay out claims. The letter also inquires about any discussions regarding the company’s solvency and the possibility of a federal bailout.
In response, legislation was introduced in the U.S. Senate on Nov. 28, led by Sen. Katie Britt of Alabama, which aims to revoke the FIO’s subpoena power.