TALLAHASSEE - A bill that would prevent insurance companies from adjusting rates to account for litigation costs and restrict their ability to deny claims or rescind policies due to fraudulent misrepresentations will be taken up by the Senate Banking and Insurance Committee this afternoon.
Sponsored by Republican State Sen. Greg Steube of Sarasota, the measure would amend assignment of benefit (AOB) law, where post-loss, policyholders sign away their insurance rights to third-party vendors to accelerate repairs to their homes.
Critics say Steube's measure is more in line with interests of the trial bar rather than with insurers and business organizations which have been fighting abuses of the AOB process. Reformers say abuse begins with inflated rates for repairs, which then leads to lawsuits when insurance firms balk at paying. If the insurer loses in court, it is required to pay attorneys' fees.
Last year, the Florida Chamber of Commerce reported that insurance rates have increased as much as 10 to 15 percent due to the misuse of AOB.
It also pointed to a skyrocketing number of AOB-related lawsuits over the past decade, going from 405 such legal actions in 2007 to more than 28,000 in 2017.
State Sen. Dorothy Hukill (R-Port Orange), said in a previous interview with the Record that the AOB issue is a familiar one for her Central Florida constituents.
“Every time I talked to a group or talked to constituents, they were well aware of the issue,” Hukill said.
Hukill had sponsored SB 62, which would have restricted certain awards of one-way attorney fees generated through property insurance claims. It would have also placed more conditions on AOB contracts before they could take effect.
That reform measure, however, was allowed to languish, as noted in a Wall Street Journal editorial on Jan. 21.
The editorial also pointed out that chair of the Banking and Insurance Committee, Republican State Sen. Anitere Flores of Miami, on the other hand has been "happy" to consider Steube's bill.
It said that a "fight" between "reform-minded" Republicans and what Steube is proposing "will speak volumes about the character of Florida’s GOP."
"Florida has benefited from its low-tax regime but it can’t continue to prosper if it becomes a mecca for looting by lawsuit," the editorial states.
The committee hearing convenes at 3:30 p.m.