If this story sounds familiar, there’s a reason. Florida insurance companies and the profits earned by their affiliated businesses were the subject of major news coverage and legislative hearings last year.

Now the issue is back in the headlines following a new Orlando Sentinel investigation into Florida insurers, affiliate transactions, and the confidentiality of their financial information. The reporting provides additional details about individual insurance companies and raises questions about why some financial information was kept confidential.

For Florida homeowners, the important thing is separating what the reporting actually shows from what a scary headline might lead you to believe.

What is an insurance affiliate?

Let’s start with the part that can sound complicated.

An insurance company may be part of a larger family of businesses. One company sells homeowners insurance, while another company in the same corporate family might handle claims, provide technology, manage employees, perform inspections, or provide other services.

Those other businesses are called affiliates.

Here’s an easy analogy. Imagine a family owns both a restaurant and a bookkeeping company. The restaurant can legitimately hire the bookkeeping company to handle its accounting.

The fact that money moves from one family-owned business to another is not automatically suspicious. The important question is whether the restaurant is paying a reasonable price for the bookkeeping.

That is essentially the question being asked about Florida insurers and their affiliates.

What did the investigation find?

A consultant hired by Florida’s Office of Insurance Regulation reviewed transactions between insurance companies and affiliated businesses. The consultant questioned whether some of those payments met the standard of being “fair and reasonable.”

The attention-grabbing part is that some regulated insurance companies reported losses during the period being examined while affiliated companies were profitable.

That can easily turn into a headline suggesting insurance companies were secretly hiding profits somewhere else.

But that is not what the numbers alone prove.

An insurance carrier and its affiliate are separate businesses with separate revenues and expenses. An affiliate can legitimately earn a profit providing services while the insurance company loses money paying hurricane claims, litigation expenses, reinsurance costs, and other expenses.

There is also an important fact that can get lost in the headlines. When the consultant testified before Florida lawmakers in 2025 and was asked whether her review found practices that violated state insurance regulations, she answered “no.” Her review also did not determine that affiliate payments caused higher premiums or insurer failures.

Source: Insurance Journal, April 2025

So what is new this time?

The Orlando Sentinel’s latest reporting provides previously confidential details about individual insurance companies. It has also created a separate controversy over government transparency after an unredacted version of the report was released through a public records request and the Florida Senate subsequently sought to have the newspapers destroy it.

That makes this two stories rolled into one.

The first is an insurance regulation question: Were payments to affiliated companies fair and reasonable?

The second is a government transparency question: How much information about those transactions should the public be allowed to see?

Both are reasonable questions.

One piece of context homeowners should not miss

The financial information generating these headlines largely comes from 2017 through 2019.

That matters.

Florida’s property insurance market subsequently experienced hurricanes, rapidly increasing reinsurance costs, extensive litigation, insurer insolvencies, and major legislative changes. Florida lawmakers enacted significant property insurance reforms in 2022 and 2023, and the market today is not identical to the market represented by those older financial statements.

That does not make questions about those transactions irrelevant. It does mean homeowners should be careful about using financial results from several years ago to draw conclusions about an insurance company’s financial condition today.

What does this mean for you?

Think about the issue as two buckets.

One bucket is the regulated insurance company responsible for paying your covered claims. The other contains affiliated companies providing services to that insurer.

Money moving between those buckets is normal. What regulators need to make sure of is that the amount moving between them is appropriate and does not improperly weaken the company responsible for paying claims.

That is a much more accurate description of the controversy than saying insurers were simply “hiding profits.”

Sensational Language Translated

“Insurers hid profits in affiliates”
Plain English: Affiliated businesses earned profits while some regulated insurance carriers reported losses. Whether payments to those affiliates were reasonable is the central question.

“Insurance companies lost money while their affiliates made millions”
Plain English: Separate companies within the same corporate family had different financial results. That fact alone does not establish wrongdoing.

“Affiliate payments”
Plain English: Money an insurance company pays a related company for services it provides.

“Fair and reasonable”
Plain English: If you are paying a company you also own, regulators want to know that you are paying an appropriate price for what you are getting.

Bottom line from Sun Insurance

Florida homeowners deserve transparency, and regulators should closely examine transactions between insurance companies and businesses under the same ownership.

At the same time, affiliate profits are not automatically evidence that an insurance company secretly hid money, overcharged homeowners, or violated the law.

The real question is simpler: Were these companies providing legitimate services at reasonable prices, and was enough money being kept inside the regulated insurance company to protect policyholders?

That’s the question worth asking as this story develops.

At Sun Insurance, we’ll continue following it and translating complicated insurance language into information Florida homeowners can actually use. You deserve the full picture, not just the headline.