Opportunities approach for reforming assignment-of-benefits insurance legislation

By Glenn Minnis | Jan 29, 2019

Carolyn Johnson is hoping to seize the moment when it comes to reforming Florida’s assignment-of-benefits system.

“I think this is the perfect moment to strike on behalf of consumers across the state," Johnson, Florida Chamber director of business economic development and innovation policy, told the Florida Record. “A lot more attention is now being focused on the issue and data clearly shows building evidence of consumers feeling as if they have been taken advantage of for far too long. Lawmakers are hearing a lot about that back in their home districts whenever they are there to interact with their constituents.”

Senate Bill 1168, aimed at addressing rising assignment-of-benefits concerns, passed in the Senate Judiciary Committee last year, but failed to go forward amidst concerns from business and insurance interests that it did not go far enough. 

Even as Florida Sen. Greg Steube (R-Sarasota), who sponsored SB1168 and pushed forward on it, many of those who it figured to impact most continued to insist that it didn’t curb plaintiff lawyer abuses.

With Steube now no longer chairing the Senate Judiciary, many have circled the upcoming March 5 legislative session as a time that could signal the kind of change they feel is truly needed.

“I’m very optimistic that this is the year that we will get the kind of reform done that’s been a long time coming,” Johnson added. “There is definite agreement among a vast majority of people that there is a problem with abuses of benefits. According to the Department of Financial Services, there were over 34,000 lawsuits filed last year with assignment-of-benefits attached.”

Florida Justice Reform Institute president William Large argues the fact that more hasn't already been done to address the issue is a testament to just how potent opposing forces truly are.

“The trial bar is a powerful lobby,” he told the Florida Record. “They have used third party vendors to speak for them. The third party vendors have, in turn, tried to make the insurance companies the bad guys. Efforts are being made to prevent the one way attorney’s fee from being assigned to third party corporate vendors.”

Currently, Florida state law allows homeowners who have suffered the likes of water damage to their property to assign their insurance policy rights over to third-party vendors, with one of the primary stipulations being that they make on-time payments and take on the responsibility of directly dealing with insurers.

Steube’s bill also sought to obliterate assignment-of-benefits contracts in instances where such requirements as assignees producing a copy of an AOB contract to the insurer within five days are not satisfied.

As it is, the Florida Record has previously reported property insurance rates have continued to spike with critics of the system largely attributing the increases to vendors charging insurance companies sky-high rates that essentially tie the hands of insurers.

But now, both Johnson and Large are optimistic that times may be on the verge of major change.

“Going forward, I’m very optimistic about consumer protection,” Johnson said. “We have been receiving and working with different organizations and hearing stories of consumers as part of a special coalition we’re building. We will continue to educate consumers whenever and wherever we can, as this legislation is a critical issue for them and we plan to continue to bring their concerns and fight to the forefront.”

When pressed with the question of if he believes new AOB reform legislation now has a chance of moving forward, Large keeps it direct and simple.  

“Yes, I do,” he said.

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