An insurance agent leader in the Florida Association of Insurance Agents has questioned the motives of Florida’s dominant insurance rating agency in downgrading Florida-based insurance companies. A post to its membership suggests that Demotech made the downgrade for a self-serving financial reason as a power ploy:
Are there ulterior motives for the timing of these downgrades? For years, Joe Petrelli has tried unsuccessfully to convince Fannie and Freddie to accept Demotech’s “S Substantial” rating. Will downgrading a large number of companies that operate primarily in Florida, one of the largest insurance markets in the world, give him the leverage he needs to win approval?
Wow! That would be quite a plan if true. Bully the federal mortgage lenders by threatening Florida̵7;s fragile insurance market. What the hell — maybe Demotech hires Governor DeSantis to take on this thing the way DeSantis took on Walt Disney World.
This adds a new wrinkle that was not mentioned in yesterday’s post, Shocking! Shocking to think any insurance regulator would trust Demotech. Insurance valuation institutes are not something that enthusiasts spend a lot of time studying. Perhaps we should, based on the recent drama involving Florida’s insurance market.
The moment a person’s motives are suspected, everything he does becomes tainted.
– Mahatma Gandhi