Interview – Robin Smith Westcott – Florida’s New Insurance Consumer Advocate
Ms. Westcott is currently serving as the Florida Insurance Consumer Advocate, having been recently appointed by Chief Financial Officer, Jeff Atwater. Robin began her legal career in 1993 with the Florida Department of Insurance, Division of Rehabilitation and Liquidation as an attorney handling legal matters relating to the receivership estates of insolvent companies. Robin served with the Receiver until 2001 when she left to enter private practice. Robin returned to the public sector in 2002 with the Florida Agency for Workforce Innovation where she served as Assistant General Counsel and Counsel to the Florida Partnership for School Readiness. In 2004, Robin returned to the Office of Insurance Regulation as an Assistant General Counsel. Robin was appointed as the Director of Property and Casualty Financial Oversight in 2007 and served as the Acting Deputy Commissioner for Property & Casualty prior to accepting the position of Executive director with the Medicaid and Public Assistance Strike Force in March of this year.
Robin earned a Juris Doctor from The Florida State University College of Law and was admitted to the Florida Bar in 1993. She received her Bachelor’s of Science from Florida State University in 1991.
What do you see as your mission as the new Consumer Advocate?
Of course my goal is to use the Office to promote good consumer choice for the people of our State. I really think that is achieved by trying to pursue policymaking that promotes competition and a free market for the insurance industry. So I see us as trying to be that conduit to bring back a vibrant competitive market here in the state. That’s the best thing for the consumers of our state. That’s where prices will go down and they will be able to have new and innovative products introduced into the marketplace.
How do you make that happen because OIR has to approve the new and innovative products?
I agree. I just think that will be one of those things we build on. I think they are open to that idea. I think sometimes we just had a very difficult time because we are so tied to statutory accounting and other things that make us have to react or make regulators have to react in a certain way. But I do think that there is a lot we can do even initially just to start the conversation about how we look at risk in our state – and I’m really speaking a lot more to property now more than anything, because that’s what I know best. How we look at risk in our state and how we really underwrite risk in our state. And how do we mitigate risk in our state. And when we start doing those things and companies can really look at what the risk is and appropriately respond to that, I think that’s when we’ll start getting more people who are interested, to bring capital into the state and deploy it into insurance products.
Are you actually meeting with the companies to try and attract either existing companies to bring more capital or companies that left or companies that have never been here before – are you reaching out to the companies directly?
I have done some of that. I mean I have obviously had meetings with some companies. Really, right now, I think the immediate focus has been responding to the Citizens rate increase, especially the sinkhole portion of that rate filing. And PIP being a huge issue now, coming into the Legislative session, but beyond that and when we can hopefully get some direction on those issues and get that set up long range, for this office, yes, it will be about reaching out to insurance companies.
But, to also really work on getting consumers to understand that we have to respond in a different way in our state. We have to do a couple of different things. One of the things we have to do, is consumers have to understand and start to realize that the fraud and the other types of abuse that happen in our state – as long as they tolerate it, they are going to pay for it. And so I really want to focus on getting people to understand that tolerance of that type of behavior, of out and out fraud and abuse of insurance and products in the insurance industry or healthcare – I mean this is kind of a universal thing – healthcare insurance – healthcare from the state with respect to Medicare/Medicaid – that every time that they tolerate or do nothing to curb the fraud, then everything that they buy, from health insurance to car insurance to property insurance –that they foot that bill. So everybody who is taking advantage of the system, they’re paying a price for it. I really want to go into some of the consumer education and really try to quantify for people – “This is what you are paying for other people to be on the grift”, because I don’t think you change behavior by just saying, “That’s bad, so you should report it”, or you should not help someone – you shouldn’t be in favor of something like that – or you shouldn’t turn a blind eye to it – I think we get them by saying it’s bad and it costs you money. I think that is how you change behavior, to make people understand the economic impact to them. And you remember, when we did civil cases in the receiver’s office, in an economic crime, unless you had a victim there that the jury could see and touch and feel and absorb their “pain” from it, it’s very difficult to get juries to reach an award on economic crimes or to convict or to even, on the civil side, award damages, because they want to see a victim. We have to get people to understand they are the victim in a very practical way.
Do you see your office taking part in the Citizens rate process?
Yes. We will be appearing at the rate hearing on the 13th. I am very concerned that the Legislature did some very bold things with Senate Bill 408. The reforms in there have really tried to target the fraud that was in that system. I don’t believe that that rate filing really adequately accounts for what 408 effectively did with changing the rules and changing the ways sinkhole claims are processed – and what is and is not a sinkhole. So I just don’t think you can spring that kind of rate increase – because rate is prospective in nature – you can’t do that without considering the reform that is going to come from that. And even at the end of the day, if you consider that, and I understand that it is difficult to find a way to quantify that – but to me you can’t take the position of, yes, we did that a little bit – but it doesn’t mean that much right now and we still need this rate. I understand that at the end of the day, when those things are considered and there is a way to quantify that and go forward with the rate increase they request – there will be some justification more than likely for an additional rate and there is probably going to be rate need there – but then let’s also be kind of practical about how we put that into place. Because if you do a glide path approach to that, you might get a couple of years into that and discover those reforms were far more effective than you thought they were going to be, and the data will support that and then there wouldn’t be any need to implement further rate increase – so it gives you some time because you don’t have a really great way to quantify what 408 meant yet but you will in a couple of years as you see their claims come in – then give it the credit and the credibility that it has and it may be that it leads us to a place where they don’t need any more rate than maybe some of the first implementation of rate need. So I think that they should be obliged to give that some time to see how the claims develop.
At one time, there was some legislation for the Consumer Advocate’s Office to be statutorily a party to rate filings. Do you see that coming back up? Are you going to advocate for that?
I’m not. I’d like to see how the relationship works. I feel very comfortable, I mean I know almost everyone at OIR. I’ve worked with them for years. I have a good working relationship. And I really feel that if I bring forward issues – if I bring forward petitions to either them or to DFS – I’ve worked with many of the DFS people for much of my career as well – I think those will be given credit and things like subpoena powers and things that they already possess, that they will deploy if it’s a credible concern or a request on my part – I think that they will oblige this office by following up on that. So I don’t see the need for expanding the power at this point.
Is there any legislation you would want to advocate for?
Well I do think we do have to have some PIP reform this year. And we’ll be starting the working group in a couple of weeks for PIP reform. The format for that will be the members will be asked very pointed questions about reform and how it affects them and what data they have to support whatever position it is that they are taking. And the product will be a paper that gives all of that data and compiles all of those positions to say, these are all the things that people believe or support that would reform PIP.
And then the second part of that exercise will be, if those cannot be accomplished for whatever reason — What’s next? If you had mandatory BI – what does that mean? How does that affect rates? How does that shift some of the costs in the system over into the healthcare arena? Because I think that is key. I think that the Legislature needs to be able to look at something substantive and understand that if they make a decision one way or the other, this is what they are affecting on the periphery. Things like, if we decided to go with something complicated like a worker’s comp. system, to try and address some of the fraud issues. How much does that cost? Even from a governmental standpoint – we had an entire division at DFS that handles workers’ comp. So are you talking about overlaying that kind of system on a $10,000 benefit? Does that really make sense? Let’s talk dollars and cents here.
Are you looking at the unintended consequences?
I don’t know that anyone has set out to put on paper – here is what you can do and here are the possible consequences of those actions because we have looked at data from other places and we’ve asked the stakeholders in this to bring their data forward, and they either have and supported their arguments or they haven’t. And there isn’t any support for what they are saying would happen in the marketplace as a result of taking any certain actions. That’s our focus. I hope that there are some recommendations that are kind of the “of course, why wouldn’t we do that”. And some of the things that you have to fix whether you are in a PIP system, a BI system, or a tort system, that you have to address clinic regulation and some of that. That you have to do those things as well or you aren’t going to make either system work. So I am hopeful that if there are any recommendations out of it, I hope that it really goes towards those things, that you have to fix these things or no system works at all. Or these are the fraudulent activities – I was looking at a statistic earlier today – they were talking about staged accidents and how much the percentages have gone up even in the other areas like BI and the increases there – so it is clear that if you don’t do something to stop that type of fraud – even shifting to a tort system, it’s still going to be very important to have addressed those issues even in a different system. So I’m hopeful that this paper, this product, can be used by the CFO, by the Insurance Commissioner, by the Governor’s Office, to formulate good policy recommendations for the legislature and for the legislature to use in that evaluation. So that is probably the biggest thing we will be addressing this session.
Your task force that you created for PIP – how many members does it have?
We are at about 22-23 members. But it is important if we have people who are stakeholders, like, say chiropractors – they are not in the FMA – so they really should have another seat at the table. So we try to include everyone we can think of as far as the medical community that will address the issues – we even have managed care – someone from Blue Cross that we have asked to join the group simply from that perspective, that if we put it in a managed care type juncture – what does that mean? And health care costs. If we put in a mandatory BI healthcare carrier, what does that mean for you? And so we tried to include people that have that perspective and can come back to us with some of the data of what they see if you made certain adjustments or shifts. And they can give us good advice on, if you’re going to do it, do it this way, because it just makes more sense to do it this way. So we tried to include people like that – we certainly have the trial lawyers and a couple of consumer advocates. And I think PERC will be one of our members on the panel. And then we have the people who are kind of the more neutral bodies like the Legislature. We have asked for representatives from the Speaker and from the President of the Senate as to who they would like to participate on the panel. The Governor’s Office has also given us a name to participate. So OIR will be there, DFS Fraud will be there. AHCA will be there because of the clinic licensure issues. So we have asked those people that are the implementation people too – because it is always important to consider what they have to say – since they are going to have to hold the gate open or closed. So we have tried to include all of those people in the discussion.
Do you have a first meeting set?
We are tentatively looking at September 15th as the first meeting.
You kept your job as the Chair of the Medicaid and Public Assistance Fraud Strike Force. Are they overlapping at all or are they just two distinct jobs?
They are two distinct jobs. There are some things where, if you are looking for common things, especially in health care fraud and PIP fraud at this point – you see common denominators, like clinics. You just really know that to help all of these things, you just have to fix this. Which is good. That way I can bring that kind of perspective. This just doesn’t help one area – this helps everybody. Our first meeting will be September 14th in Miami. But I will be transitioning out of the strike force – we hope to have someone named here very soon.
How do your goals work with those of the CFO?
Obviously, we have the same overall view about the marketplace – that right now Florida is suffering – and consumers are very much suffering – because there isn’t a great deal of choice on the property side as far as homeowners’ insurance. And we are starting to see rate increases and pressure on rates to go up. We both have a very similar vision in that a competitive marketplace for Floridians is the best thing for us. How do we get those folks back and deploying capital in our state? And so I think we have a very consistent view that we have to stimulate Florida’s economy and we have to get our state growing again and we have to get to a place where businesses understand what it means to do business here and aren’t afraid of it. And I think that is a very consistent message from both of us.
In the past, this Office has been pro-industry or pro-consumer. What’s your philosophy? Do you see these as mutually exclusive? Or do you see an approach that can perhaps meet the needs of both?
Yes, I really do. Most people, when they come here and want to do business – they want to give a good product at a fair price – it is good business. And their brand name is important to them. They want to be seen as somebody who answers their telephone and pays claims when they are given a claim. They don’t want a reputation of not paying claims. There are the occasional bad apples that the Consumer Advocate is going to be duty bound to call that out when you see it. That’s one of those things that you always need to be – I mean the CFO calls me a watchdog from that perspective and I think that I am, because I have seen a lot of scams go and how those work. It is not a mutually exclusive thing to say that consumers want that. They want a good company that pays their claims. And most people aren’t in on some Florida abuse or fraud. They just want a good product and they want to know that when a storm comes through, that their claim is going to be covered.
And wouldn’t you agree that the companies want the bad apples out as well?
I agree with that. I think that is especially important. Because people have only a certain amount, especially right now in this economic circumstance, only have a certain amount of money to give to others or to pay for services or goods. And people are starting to be more prudent. So they are looking at companies from that perspective. And their name is going to mean a lot. And if they tolerate bad behavior in their own industry, it gives them all a bad name. So I think it is important to the industry that policing effort – and I understand that sometimes it’s really hard for big companies especially to have that transparency. There are so many regulatory requirements, that I would say to them – work with the regulators and others to make sure that they do have strong fences built for the bad players to be kept out and controlled. And I understand that is hard from a company perspective. But they have to be committed to it now and they have to give good guidance on the best ways to approach that and not be resistant to transparency in the insurance industry. I think that is important for a lot of reasons as you look to whether or not we are going to have a federal regulator and all those issues – I think the more transparent and the more open that companies are to their entire structure – it will bode much better for them in the long run. I don’t see those two things being mutually exclusive. I know a lot of times the insurance industry is painted as the big bad insurance industry and there have been some bad things that have happened and some bad players and some tolerances in the past that quite frankly never should have happened. But, it’s a product that we need as Floridians and I think people want that choice – they want to be able to look and find a good company that they have researched and that is going to write here. I think those two things can really work together. The pro consumer hat, I think, can be a lot of things. I do think a component of that is being critical of industry practice when it is hurtful or harmful to the public. I do think that is a part of being a consumer advocate. I also think that there is another part of that, that goes to, how do we get people to understand that their practices matter and get a competitive marketplace, so the public does have a choice. So I think there are two components.
What do you see as the biggest challenge facing your office that maybe you didn’t expect when you took this job?
It’s smaller than it used to be. With the decreases in state government it’s going to be challenging to be as responsive to a state as big as Florida when your budget has been just annihilated and your positions have been stripped away. I have four permanent positions and two OPS staff at this point. As travel is affected, I represent those people in Monroe County now too and it is kind of hard for me to sit here in Tallahassee and not at least talk to them and go there and be in these places. And it is such a challenge to do that now with the budget and it is so negatively looked at. I don’t mind driving, but it’s hard to reach places like Miami. It is a very big state and for me I want to make sure that everyone feels like I’m their consumer advocate and that’s hard in this position with all the budget cuts.
What do you see as the differences in working here and at OIR?
I think it’s great. Because at OIR, as a regulator you do have that part of your job where you are looking at individual companies from the perspective of how are they individually doing. I think I get to take a more market approach to things, which is where we don’t have to be so myopic on one little company and that being disruptive to everything that is going on around you. I can step back from that and be a little bit more holistic and how I’m looking at trends in the marketplace.
What’s your typical day like now?
Wow – getting here and having 43 phone messages already. Talking to people. I talk to different factions all day long. Right now people are very interested in the working group for PIP. So I have a tremendous amount of people coming in and wanting to talk about the format and what it’s going to look like. So right now, I get here and I blink and its 5:30.
Have you settled into the job?
Now that I’m here, I’m good. This is an incredible amount of responsibility and exposure and an incredible opportunity. That’s amazing. I can’t believe I’m here. Sometimes I have to punch myself. I love this. It’s really fast and furious. It’s good for me and I like doing this. I like the thought that I’m going to make some good things happen for our State.