Florida’s insurance market has been troubled for quite some time. Premiums are skyrocketing, insurers have gone bankrupt left and right, and consumers are struggling. But one insurance company in particular, Slide Insurance, is getting sweetheart deals from Florida regulators—and consumers are paying the price. This is unacceptable, and Florida consumers deserve better.
How is this happening? Florida has a state-backed insurance company of last resort, called Citizens, which will insure consumers’ homes if they cannot find private insurance coverage. Citizens currently covers about 1.26 million policyholders in Florida, and Florida politicians are attempting to reduce the number of people getting coverage through this program. As a result, Florida has “takeouts,” where insurance companies can get thousands of policyholders and millions of dollars in premium without any costs. The policyholders get transferred from Citizens to a private insurance company; however, a lot of these companies that have received policyholders from Citizens have later gone bankrupt.
Slide Insurance, founded in 2021 by its current CEO Bruce Lucas, has received a considerable number of takeouts. The Washington Post reported that “insurance officials have awarded him [Lucas] the opportunity to take over far more policies than any other company, data shows — either directly from Citizens or from other insurers that have gone under or pulled out of the state.” All in all, Florida has granted Slide the chance to pick up over half a million policyholders, far more than any other company.
Unsurprisingly, this has attracted a lot of criticism. Slide Insurance responds to critics by saying that they bring stability and solvency to the market. And Florida regulators defend the takeout practice by saying that without this approach, there wouldn’t be a private insurance market in Florida.
But the actual impacts of these deals on consumers are terrible. Florida homeowners often get bounced from insurer to insurer, only finding out after the fact that their company has gone bankrupt. When their policy got acquired by Slide, one couple found that their premium increased from $1,350 to $6,000 for almost the exact same policy—an outrageous price hike that anyone would struggle to afford. As a result, they had to postpone important surgeries and their health suffered.
For Lucas, the benefits of these deals are considerable. Insurance company CEOs tend to be lavishly rewarded and over the past eight years, he earned $78 million. Lucas also told reporters that new Florida laws, which clamp down on lawsuits by homeowners against insurance companies, will make it easier for Slide Insurance to succeed. Lucas claims he is not political and has not participated in any meetings about these new laws. But The Washington Post found that “since 2018, Lucas and his companies have donated nearly $2.6 million — about $1.17 million in the past year alone — to key Republicans, including those in the Florida legislature who spearheaded the new legislation.”
This is evidence of a very cozy, and possibly improper, relationship. And before Lucas founded Slide Insurance, he worked for another company called Heritage. In 2013 he closed a takeout deal with Citizens, where Heritage got 60,000 policies and Citizens agreed to pay the company up to $52 million in retroactive premiums. Legislators attacked the deal, calling it corporate welfare, and other insurance companies complained that it was unfair. It later emerged that Lucas’s lobbyists met with then Governor Rick Scott before the takeout went public, that Heritage donated to Scott’s campaign, and that the Citizens board member who broke the tie vote in favor of the transaction was appointed by Scott.
More recently, Slide has been accused of getting still more sweetheart deals from the Florida government. For example, Florida’s Office of Insurance Regulation helped broker a $400 million deal where Slide took over a bankrupt insurance company. Slide and Lucas benefited handsomely but many policyholders did not. Instead, Slide denied their legitimate claims, made them jump through hoops and fill out excessive paperwork, and gave them inadequate payouts. And it has increased premiums for lots of consumers, sometimes by 500% or more.
Consumer Federation of America has previously written about insurance companies and their exploitation of consumers, and urged the Florida Office of Insurance Regulation to investigate and punish alleged wrongdoing. We have also criticized the Office for being cozy with the insurance industry and often being part of the revolving door, where insurance regulators go to work for the insurance industry or regulators come from the insurance industry. But if the Florida Office of Insurance Regulation is making unfair and biased deals with Slide Insurance at the expense of consumers, the fox is guarding the henhouse.
The Florida Office of Insurance Regulation (OIR) is supposed to make insurance affordable and accessible and protect consumers. If it is failing to do its job, it must be held accountable. Florida residents deserve better—they deserve government agencies that actually help them and safeguard them against abuses by insurance companies. We hope that in the future, Florida regulators will be neutral between consumers and insurers, stand up for consumers when their rights are violated, and not unfairly privilege an individual company over policyholders.