Florida Record

Tuesday, October 22, 2019

Insurance office foresees difficult road ahead of new assignment of Florida benefits law

Lawsuits

By Mario Marroquin | Jul 20, 2019


Florida Supreme Court chamber in Tallahassee | Nagel Photography / Shutterstock.com

TALLAHASSEE -- Although Florida’s assignment of benefits reform came into effect July 1, the state’s Office of Insurance Regulation sees a long road ahead before changes in the state’s insurance policy will trickle down to consumers. 

The insurance reform – known as House Bill No. 7065 – was signed into law by Gov. Ron DeSantis in May and aims to curb the assignment of benefits litigation that has, ultimately, increased insurance premiums for consumers in the Sunshine State.

“HB [No.] 7065 encompasses a variety of important consumer protection provisions that we hope will continue to serve as a primary, consumer-oriented framework to end the current AOB crisis that exists in Florida’s property and casualty insurance market,” Karen Kees, press secretary for Florida’s Office of Insurance Regulation told the Florida Record. “Conversations surrounding AOBs will likely remain prominent during the 2020 legislative session, and for years to come.

“It is our hope that any future conversations will focus on ways to bolster the current protections that are in place, and not from newly-developed litigation tactics that could negatively impact policyholders, yet again.”

Florida’s insurance law, prior to the signing of HB No. 7065, allowed policyholders the right to assign to a third party the claim benefits of an insurance policy. This framework, coupled with the state’s '‘one-way'’ attorney fee statute, allowed policyholders to recover attorney fees in full from the insurer for the recovery of any amount of benefits after a legal complaint was filed.

The new policy, as part of HB No. 7065 defines an '‘assignment agreement'’ and establishes requirements for the agreement; prohibits certain fees and provisions in an assignment agreement, transfers multiple pre-suit duties to assignees, requires insurers to report data on claims paid by Jan. 30, 2022, and each year after, enables insurers to make a policy prohibiting assignment available as a whole or in part, revises the state’s one-way attorney fee statute, and requires service providers to give an insurer prior notice of at least 10 business days before filing a claim or legal complaint.

“Although we are still in the infancy of this particular piece of legislation, OIR has not seen any indications that there will be issues with enforcing this measure,” Kees said. “Due to the compounding nature that nearly a decade of abusive litigation tactics has on Florida’s market, it may take some time for the provisions of the new law to truly be reflected in losses, loss adjustment expenses and rate indications.

“To get an early look at the impact of the bill, the informational memorandum includes a data call template for insurers to use in conjunction with a data call to be issued in February 2020 and due in March 2020.”

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