TALLAHASSEE (Florida Record) – Florida's insurance providers are grateful for Florida Gov. Ron DeSantis' signature this week on major assignment of benefits (AOB) reform that passed the general assembly last month, the head of Florida Association of Insurance Agents said.
"FAIA is very grateful for his leadership in making AOB reform a priority and eliminating insurance fraud from Florida's marketplace," FAIA President and CEO Jeff Grady told the Florida Record today.
Grady said in a previous Florida Record interview that AOB reform in Florida won't resolve all issues, that "bad actors" remain in auto glass where similar abuses continue, but that taking care of "property side" abuses is a good start.
Florida Association of Insurance Agents President and CEO Jeff Grady
| Photo courtesy of Florida Association of Insurance Agents
"It means that fewer consumers will fall victim to insurance fraud created by AOB abuse," Grady said during his Florida Record interview earlier today. "It should mean a significant reduction in litigation regarding insured water and roof losses. Assignment of Benefits abuse is what has been driving wasteful lawsuits. The new law establishes new requirements and settlement guidelines when AOB is used to resolve claims disputes."
FAIA is a nonprofit state trade association of insurance agencies affiliated with the Independent Insurance Agents and Brokers of America. FIAI has 18 local boards in Florida and serves as an information source for nearly 2,000 independent property and casualty agencies who employ almost 25,000 licensees, according to information on FAIA's website.
Gov. DeSantis had already announced he would sign signed the AOBs reform bill, Senate Bill 122, shortly after the legislation passed the state Senate in April.
"I thank the Florida Legislature for passing meaningful AOB reform, which has become a racket in recent years," DeSantis said in a prepared statement issued shortly after he signed the bill. "This legislation will protect Florida consumers from predatory insurance practices."
The new law is expected to take effect July 1.
Reform advocates for years have asserted that unscrupulous contractors devised a way to game the system of AOBs at the expense of insurance companies and their policyholders and the problem mounted from there.
Insurers and their customers should notice a real change as the law takes effect, Grady said.
"As the reforms are fully implemented, it should mean more insurance choices and lower rates for property insurance buyers," he said. "Florida's market is already uniquely challenged by catastrophic hurricanes. When you add rampant fraud through AOB abuse, our state's insurance challenges are only exacerbated - companies withdraw and prices rise. These reforms were desperately needed to maintain a stable residential property insurance market for Florida consumers."