The Florida Hurricane Catastrophe Fund will not have to pay some $30 million to Universal Property & Casualty Insurance Co., after the carrier settled a civil suit that alleged the insurer had backdated claims to boost reimbursement from the fund.
Florida Attorney General James Uthmeier announced Tuesday that Fort Lauderdale-based Universal must pay a $4 million fine — plus attorney fees — for allegedly submitting ineligible Cat Fund claims that it said were the result of 2017’s Hurricane Irma.
“Following a whistleblower lawsuit filed in Leon County, the Office of the Attorney General launched its own investigation into UPCIC to ensure that the claims submitted by the company were, in fact, caused by Hurricane Irma,” the AG’s office said in a . “During the course of that investigation, numerous unrelated claims were identified in the submissions from UPCIC to the FHCF. As a result, the company agreed not to seek reimbursement for those claims, lowering the FHCF payout from Hurricane Irma to UPCIC by more than $30 million.”
Uthmeier said it was a case of “insurance fraud,” but Universal officials strongly disputed that Wednesday. They said the claims had been resolved through the Cat Fund’s standard review of claims after six years.
The fund, a layer of state-backed reinsurance, has “a thorough final analysis known as commutation in which the fund and insurer evaluate loss data to determine a full and final settlement,” Universal said in a statement. “This process, which is standard for all insurers, resulted in the parties’ mutual commutation agreement.”
The AG’s statement acknowledged that the issues had been addressed through UPCIC’s “periodic interim loss reports and by the final determination of its reimbursable losses through commutation.”
The unnamed whistleblower, a Universal employee who left the company in 2018 and filed suit in 2020, was not familiar with the fund’s reporting procedures and the accusations contained fundamental inaccuracies, the company noted. The whistleblower’s suit in Leon County court is sealed and is not available online.
The settlement agreement notes that the carrier has 10 days to pay $6.5 million, which includes $2.4 million in attorney fees. Universal’s chief strategy officer, Arash Soleimani, said in an email that the settlement agreement “includes among its terms a payment as part of the parties’ mutual decision that the case should be dismissed and the matter concluded.”
The Cat Fund’s chief operating officer, Gina Wilson, could not be reached Wednesday. But others familiar with the fund said that similar actions by insurers were unusual but not unheard of. Florida carriers often anticipate heavy losses from claims after hurricanes, file for reimbursement from the Cat Fund, then go through a review process and settlement as property claims are resolved.
Universal officials explained their view of the process:
“Over time, information about each claim evolves as the insurer gains information about the cause and origin of the loss,” the Universal statement noted. “This inherently means that some claims initially identified as hurricane claims are later determined to not be associated with the hurricane, and conversely that some claims intentionally or unintentionally not reported as hurricane claims are determined to be associated with a storm.”
The company, one of Florida’s largest property insurers, launched a review of its Hurricane Irma data prior to and during commutation. That analysis resulted in the company’s reassessment of approximately 1% of its Hurricane Irma claims. Irma was Universal’s single-largest loss event, thanks in part to pre-2022 reform litigation that swelled storm costs from an initial estimate $450 million to more than $2 billion, the company said.
The whistleblower’s case is now closed, the company noted.
“We are pleased the review has come to a close and the state dismissed the case,” said Chief Executive Officer Stephen Donaghy. “We look forward to continuing to serve Floridians as market reforms are leading to more affordable home insurance options for consumers.”
Universal Insurance Holdings’ stock price dipped slightly after the settlement was announced, but remained near a five-year high, according to Yahoo!Finance.
Topics Florida Claims Property Casualty
Was this article valuable?
Here are more articles you may enjoy.
Tesla Slumps Below 50% Share of California’s Electric Car Market 
Global Q1 Commercial Insurance Rates Drop 3%, but US Casualty Bucks the Trend 
Class Action Accuses Toyota of Illegally Sharing Drivers’ Data With Progressive 
Questions About How a Deputy’s Stepson Became the Accused Gunman at FSU Shooting 
