Who Examines Insurance Company Books and Records in Florida?

In Florida, the Office of Insurance Regulation (OIR) examines the books and records of insurance companies. Its authority comes from Chapter 624 of the Florida Insurance Code, and it covers licensing, rate approval, policy forms, financial solvency, and market conduct for every regulated insurer in the state. Two separate units handle the work: the Property and Casualty Financial Oversight unit for P&C companies and the Life and Health Financial Oversight unit for life and health insurers. Both enforce solvency requirements that live mainly in Chapters 624 and 625 of the Florida Statutes.¹

Before any insurer gets its initial certificate of authority to do business in Florida, the OIR must examine it. For foreign insurers domiciled in another state, the OIR may accept a certified examination report from the home-state regulator rather than running its own exam. For alien insurers based outside the United States, the examination is limited to transactions conducted inside the country unless the OIR decides otherwise.²

Two Kinds of Examinations

Florida law gives the OIR two separate examination powers, and they answer different questions about an insurer.

Financial Examinations

A financial examination asks whether the insurer has enough money to pay current and future claims. Examiners dig through financial statements, accounting practices, reserves, investments, and reinsurance arrangements. The review can cover any period since the company’s last exam and may include events after the most recent fiscal year if those events affect current financial position.²

OIR staff don’t have to do all of this work themselves. The Financial Services Commission can adopt rules letting independent certified public accountants, actuaries, investment specialists, information technology specialists, and reinsurance specialists conduct portions of the examination.²

Market Conduct Examinations

A market conduct examination asks how the insurer treats its customers. The OIR may examine any authorized insurer, licensed rating organization, or joint underwriting association as often as it considers necessary, checking compliance with the Florida Insurance Code and related chapters covering workers’ compensation (Chapter 440), agents and adjusters (Chapter 626), rates and contracts (Chapter 627), and fraternal benefit societies (Chapter 635).³

Examiners look at claims handling procedures, underwriting practices, advertising, policyholder complaints, and agent licensing compliance. The point is to find patterns, such as systematic underpayment of claims, deceptive marketing, or discrimination against certain applicants.

What Examiners Actually Review

Financial exams concentrate on the balance sheet: the adequacy of reserves, the quality of invested assets, the soundness of reinsurance agreements, and the accuracy of regulatory filings. If the OIR wants a specific asset appraised, it can require the insurer to hire a qualified appraiser acceptable to the OIR. If the insurer doesn’t act within 20 days, the OIR picks the appraiser itself.⁴

Market conduct exams reach further into operations. Florida follows national standards through its NAIC accreditation, so examiners also review internal audit programs, antifraud initiatives, disaster recovery plans, privacy notices, information security programs, and contracts with third-party administrators or managing general agents. They check whether electronic records are protected, including underwriting files, claim files, and the statistical data used to support rates. Cybersecurity has become a growing focus: examiners want to see a written information security program with administrative, technical, and physical safeguards appropriate for the company’s size and complexity, and after any data breach they turn to post-breach procedures drawn from the NAIC Insurance Data Security Model Law.⁵

How Often Exams Happen

Financial exams run on a risk-based schedule. For insurers that have held a certificate of authority for three years or longer, high-risk companies must be examined at least once every three years and average- or low-risk companies at least once every five years.⁶ Newer insurers get more scrutiny. Every insurer must pass an exam before receiving its first certificate of authority, and companies licensed less than three years face more frequent review.²

Market conduct exams follow no fixed schedule. The OIR launches one whenever it decides the circumstances warrant it. A spike in consumer complaints, unusual claim denial rates, or findings surfacing in a financial exam often triggers one. The OIR may also accept a similar examination from another state’s regulator instead of duplicating the work.³

Who Pays

The insurer does. For market conduct exams, the statute is explicit: the reasonable cost is paid by the company being examined. When the OIR hires an independent professional examiner, the insurer pays that examiner directly at rates the OIR and the examiner agreed on.³

Financial exam costs work the same way. If the OIR finds the company’s books are inadequate or poorly kept, it can bring in outside experts to reconstruct or rebalance those records at the insurer’s expense, provided the OIR first gave notice and a reasonable chance to fix the problem. Appraisal fees are also charged to the insurer.⁴

The Insurer’s 30-Day Window to Respond

An examination report is not simply dropped on the insurer as a finished verdict. The OIR must give the insurer a copy at least 30 days before filing it. During that window, the insurer can request a hearing in writing. If one is requested, the OIR cannot file the report until the hearing is held and the OIR has made any modifications it considers appropriate.⁷

Those 30 days are the insurer’s main chance to correct factual errors, add context, or challenge conclusions before the report becomes public. Letting the deadline pass means losing that leverage.

What Happens When Problems Are Found

The OIR has a graduated set of tools. The mildest is a corrective action plan committing the insurer to specific operational changes on a set timeline. More serious violations can draw administrative fines, applied under uniform penalty guidelines meant to keep treatment consistent across companies. Those guidelines do not displace the OIR’s authority to suspend or revoke a certificate of authority, or to require specific corrective action, when fines alone will not do the job.⁸

There is a practical ceiling on fines. If a penalty would reduce the insurer’s surplus to a point that threatens its financial stability, the OIR must reduce the fine. A penalty that pushes an insurer toward insolvency would harm the policyholders the examination was meant to protect. When finances deteriorate to that degree, the OIR turns to rehabilitation or liquidation proceedings under Chapter 631 of the Florida Statutes.⁸ Statutory grounds for seeking a court-ordered rehabilitation or liquidation include willful violations of the company’s charter or Florida law, transfer of substantially all assets without OIR approval, management deadlocks threatening irreparable harm, and control by persons found to be dishonest or untrustworthy.⁹

Reading an Examination Report

Reports stay confidential while the examination is underway and during the insurer’s 30-day response window. Once filed, they become public record. The OIR may also publish examination results in Florida newspapers when it considers public disclosure to be in the public interest.⁷ Filed reports are posted on the OIR’s website, organized by year and insurer name under the financial oversight pages for property and casualty or life and health companies.¹⁰ A public records request to the OIR will also produce a specific report.

What About the Federal Government and Other States?

Insurance regulation in the United States is primarily a state function, and Florida is no exception. Title V of the Dodd-Frank Act created the Federal Insurance Office within the U.S. Department of the Treasury, but the FIO does not supervise insurers directly and has no authority to conduct examinations. Its job is to monitor the industry for systemic risk, flag gaps in state regulation, recommend whether specific insurers should fall under Federal Reserve oversight, and represent the United States in international insurance matters. It can collect data from insurers and share it with state regulators, with an exemption for small insurers below a size threshold the FIO sets.¹¹ A Florida insurer’s day-to-day examination exposure comes from the OIR, not the FIO.

When a market conduct concern involves policyholders in several states, regulators coordinate through an NAIC framework rather than running parallel exams. The final report from a multi-state examination contains a general summary and then a separate addendum for each participating state based on that state’s own statutes. Florida findings remain governed by Florida law even when the exam is collaborative.¹²

1
Florida Office of Insurance Regulation. Organization and Operation
2
FindLaw. Florida Statutes Title XXXVII Insurance 624.316
3
Florida Senate. Florida Statutes 624.3161 – Market Conduct Examinations
4
Florida Senate. Florida Statutes 624.318
5
National Association of Insurance Commissioners (NAIC). Chapter 20 – General Examination Standards
6
Legal Information Institute. Florida Administrative Code Annotated Rule 69O-138.004 – Risk-Based Selection Methodology for Scheduling Financial Examinations
7
Florida Senate. Florida Statutes 624.319 – Examination and Investigation Reports
8
Legal Information Institute. Florida Administrative Code Annotated Rule 69O-142.011 – Insurer Conduct Penalty Guidelines
9
Online Sunshine. Florida Statutes 631.051
10
Florida Office of Insurance Regulation. Life and Health Financial Oversight
11
US Law | LII / Legal Information Institute. Dodd-Frank Title V – Insurance
12
National Association of Insurance Commissioners (NAIC). Chapter 4 – Collaborative Actions