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Florida’s insurance industry will apply significant pressure on lawmakers to pass assignments of benefit (AOB) reform in the upcoming legislative session as consumers face rate increases and a looming coverage availability crisis due to serious and costly abuse of the policyholder benefit.

While the industry seems to finally have reached a consensus on what is fueling the widespread AOB abuse and how to fix it, the question of whether the Florida Legislature will agree to act on the industry’s recommendations remains to be seen

The Florida Office of Insurance Regulation (OIR) and Citizens Property Insurance Corp., as well as other stakeholders, are working together with Florida lawmakers to introduce a bill for the 2017 legislative session, which begins on March 7. The goal is to keep the assignment of benefits consumer protection in place, but take away the incentive that is driving the abuse by assignees, who have included attorney groups, unregulated water mitigation, remediation, and roofing contractors.

The unanimous feeling is that Florida’s one-way attorney fee statute is the main driver of the problem, and that’s what the industry says needs to be addressed by legislation in the upcoming session. Under Florida’s current law, policyholders suing their insurer over a claim dispute can recover their attorney’s fees if the insurer is shown to have underpaid the claim, by any amount.

The industry says third party contractors and attorneys have been abusing the policyholder benefit, particularly for water losses, to inflate claims and fees


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