March 2018


Please call Lee at 954-270-7966 for free quotes on Home Insurance, Auto, Flood, Private Flood, Car, Business & Commercial and Life, Health and group benefit policies.

 

Please read below how for 3 years in a row now AOB is still not resolved. Our Legislators in Tallahassee receive t much PAC money so why solve problems and help the consumer. instead we will see an average of 15% rate hikes for several years because they cannot agree on to much.

 

SB1168, by Senator Steube, passed two of its committee of three committees, but that’s as far as this onerous version of AOB reform ultimately got prior to stalling out in the Senate. SB1168 also amended current law to provide that a misrepresentation, omission, concealment of fact, or incorrect statement on an insurance application may prevent recovery only if the misrepresentation, omission, concealment of fact, or incorrect statement directly relates to the cause of the claim. If the misrepresentation, omission, concealment of fact or incorrect statement directly relates to the cause of the claim, one of the following must have applied:

  • The misrepresentation, omission, concealment, or statement is fraudulent or is material to the acceptance of the risk or to the hazard assumed by the insurer; or
  • If the true facts relative to the loss claimed had been known to the insurer pursuant to a policy requirement or other requirement, the insurer in good faith would not have:
    • Issued the policy or contract;
    • Issued the policy or contract at a premium rate at least 20 percent higher than the rate actually charged;
    • Issued a policy or contract in as large an amount; or
    • Provided coverage with respect to the hazard resulting in the loss.

In addition, SB1168 also would have amended current law to prohibit an insurer from utilizing “managed repair” controls, such as requiring that a particular vendor make repairs to a dwelling insured on the basis of replacement costs. It also prohibits the insurer from even recommending or suggesting a particular vendor to make repairs to a dwelling insured on the basis of replacement costs.

 

The bill required the assignee to provide a copy of the assignment agreement to the insurer within the earlier of 7 days after execution of the agreement, or 48 hours after beginning nonemergency work if the insurer has a facsimile number and e-mail address on its website designated for the delivery of such documents. It allowed the insurer to inspect the property at any time. If the insurer fails to attempt in good faith to inspect the property within 7 days after learning of the loss and promptly deliver to the assignee written notice of any perceived deficiency in the assignee’s notice or the work being performed; however, the failure may be raised to estop the insurer from asserting that work done was not reasonably necessary or that the notice was insufficient. We worked hard to stop this bill from advancing or being amended onto other legislation.

 

Industry’s preferred AOB bill, SB62 by Senator Hukill, was never scheduled for a committee hearing by the Banking & Insurance committee in the Senate.

 

Meanwhile, the Florida House of Representatives AOB reform, HB 7015 by Representative Trumbull was sent to the Senate in the first week of the legislative session. While the House version was not a perfect solution, the bill makes significant changes to the way property repair vendors are restricted in their use of an “assignment of benefits” or “AOB.”   The bill requires disclosures be provided to insureds before entering into an AOB. It moved to a “loser pays” attorney fee system. The House legislation provided the insured with an opportunity to rescind the assignment within 7 days of entering into the contract with the vendor. Further, the bill increased consumer protections and required vendors to provide written estimates of the work to be completed and required the assignee to notify the insurer of the assignment within 3 days of it being executed.   While it would be better to eliminate attorneys’ fees to repair vendors altogether, this bill would have been an improvement over the current system.

 

In the end, the House and Senate versions of AOB never matched up. This issue will be revisited next session.

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Please call Lee at 954-270-7966 for free quotes on Home Insurance, Auto, Flood, Private Flood, Car,  Business & Commercial, & life, group & financial products as well.

Looks like the house version of AOB is weak and the Senate version will not pass so the combined version if it passes will be little action again. Why would a Senator or Congressman do anything to really help if the PAC money keeps coming when nothing happens and they just do more Band-Aids to not really help, but it can be called a Political win for all? Read for your self and you can decide if I am correct!

 

PROPERTY

  1. AOB REFORM  SB62/SB1168/HB7015

 

An onerous version of AOB reform may be stalled in the Senate. SB1168, by Senator Steube, passed its second committee of three committees on February 6th, but no action last week. SB1168 also amends current law to provide that a misrepresentation, omission, concealment of fact, or incorrect statement on an insurance application may prevent recovery only if the misrepresentation, omission, concealment of fact, or incorrect statement directly relates to the cause of the claim. If the misrepresentation, omission, concealment of fact or incorrect statement directly relates to the cause of the claim, one of the following must apply:

  • The misrepresentation, omission, concealment, or statement is fraudulent or is material to the acceptance of the risk or to the hazard assumed by the insurer; or
  • If the true facts relative to the loss claimed had been known to the insurer pursuant to a policy requirement or other requirement, the insurer in good faith would not have:
    • Issued the policy or contract;
    • Issued the policy or contract at a premium rate at least 20 percent higher than the rate actually charged;
    • Issued a policy or contract in as large an amount; or
    • Provided coverage with respect to the hazard resulting in the loss.

In addition, SB1168 also amends current law to prohibit an insurer from utilizing “managed repair” controls, such as requiring that a particular vendor make repairs to a dwelling insured on the basis of replacement costs. It also prohibits the insurer from even recommending or suggesting a particular vendor to make repairs to a dwelling insured on the basis of replacement costs.

 

The bill also requires the assignee to provide a copy of the assignment agreement to the insurer within the earlier of 7 days after execution of the agreement, or 48 hours after beginning nonemergency work if the insurer has a facsimile number and e-mail address on its website designated for the delivery of such documents. It allows the insurer to inspect the property at any time. If the insurer fails to attempt in good faith to inspect the property within 7 days after learning of the loss and promptly deliver to the assignee written notice of any perceived deficiency in the assignee’s notice or the work being performed; however, the failure may be raised to estop the insurer from asserting that work done was not reasonably necessary or that the notice was insufficient.

SB1168 passed the Judiciary committee with 7 yeas, and 3 nays in week five. Committee Chairman Greg Steube pushed an amendment that eliminated language that prohibits carriers from factoring any attorney fees into their premium. The bill now has one more committee in the Senate. We continue working to stop this bill from advancing.

Industry’s preferred AOB bill is SB62 by Senator Hukill, which has not been scheduled for a committee hearing and is unlikely to advance given the composition of the Banking & Insurance committee in the Senate.

 

Meanwhile, the Florida House of Representatives AOB reform HB 7015 by Representative Trumbull was sent to the Senate in the first week of the legislative session. While the House version is not a perfect solution, the bill makes significant changes to the way property repair vendors are restricted in their use of an “assignment of benefits” or “AOB.”   The bill requires disclosures be provided to insureds before entering into an AOB. It also moves to a “loser pays” attorney fee system. The House legislation provides the insured with an opportunity to rescind the assignment within 7 days of entering into the contract with the vendor. Further, the bill increases consumer protections and required vendors to provide written estimates of the work to be completed and required the assignee to notify the insurer of the assignment within 3 days of it being executed.   While it would be better to eliminate attorneys’ fees to repair vendors altogether, this bill is an improvement over the current system.

 

In the end, it is unlikely that the House and Senate versions of AOB will match up. But if the House bill moves toward the Senate version, it will be a weaker product.

 

Please call Lee at 954-270-7966 for free quotes on Home Insurance, Auto, Flood, Private Flood, Car, Business & Commercial, & Life, group benefits, and all types of Insurance.

PROPERTY

  1. AOB REFORM  SB62/SB1168/HB7015

 

An onerous version of AOB reform is on the move in the Senate. SB1168, by Senator Steube, passed its second committee of three committees on February 6th, but no action last week. SB1168 also amends current law to provide that a misrepresentation, omission, concealment of fact, or incorrect statement on an insurance application may prevent recovery only if the misrepresentation, omission, concealment of fact, or incorrect statement directly relates to the cause of the claim. If the misrepresentation, omission, concealment of fact or incorrect statement directly relates to the cause of the claim, one of the following must apply:

  • The misrepresentation, omission, concealment, or statement is fraudulent or is material to the acceptance of the risk or to the hazard assumed by the insurer; or
  • If the true facts relative to the loss claimed had been known to the insurer pursuant to a policy requirement or other requirement, the insurer in good faith would not have:
    • Issued the policy or contract;
    • Issued the policy or contract at a premium rate at least 20 percent higher than the rate actually charged;
    • Issued a policy or contract in as large an amount; or
    • Provided coverage with respect to the hazard resulting in the loss.

In addition, SB1168 also amends current law to prohibit an insurer from utilizing “managed repair” controls, such as requiring that a particular vendor make repairs to a dwelling insured on the basis of replacement costs. It also prohibits the insurer from even recommending or suggesting a particular vendor to make repairs to a dwelling insured on the basis of replacement costs.

 

The bill also requires the assignee to provide a copy of the assignment agreement to the insurer within the earlier of 7 days after execution of the agreement, or 48 hours after beginning nonemergency work if the insurer has a facsimile number and e-mail address on its website designated for the delivery of such documents. It allows the insurer to inspect the property at any time. If the insurer fails to attempt in good faith to inspect the property within 7 days after learning of the loss and promptly deliver to the assignee written notice of any perceived deficiency in the assignee’s notice or the work being performed; however, the failure may be raised to estop the insurer from asserting that work done was not reasonably necessary or that the notice was insufficient.

SB1168 passed the Judiciary committee with 7 yeas, and 3 nays in week five. Committee Chairman Greg Steube pushed an amendment that eliminated language that prohibits carriers from factoring any attorney fees into their premium. The bill now has one more committee in the Senate. We continue working to stop this bill from advancing.

Industry’s preferred AOB bill is SB62 by Senator Hukill, which has not been scheduled for a committee hearing and is unlikely to advance given the composition of the Banking & Insurance committee in the Senate.

 

Meanwhile, the Florida House of Representatives AOB reform HB 7015 by Representative Trumbull was sent to the Senate in the first week of the legislative session. While the House version is not a perfect solution, the bill makes significant changes to the way property repair vendors are restricted in their use of an “assignment of benefits” or “AOB.”   The bill requires disclosures be provided to insureds before entering into an AOB. It also moves to a “loser pays” attorney fee system. The House legislation provides the insured with an opportunity to rescind the assignment within 7 days of entering into the contract with the vendor. Further, the bill increases consumer protections and required vendors to provide written estimates of the work to be completed and required the assignee to notify the insurer of the assignment within 3 days of it being executed.   While it would be better to eliminate attorneys’ fees to repair vendors altogether, this bill is an improvement over the current system.

 

In the end, it is unlikely that the House and Senate versions of AOB will match up. But if the House bill moves toward the Senate version, it will be a weaker product and possibly even onerous.

 

  1. AOB MANAGED REPAIR WITH RESTRICTIONS SB1140

 

B1140 by Senator Garcia specifies requirements for an insurer offering residential coverage that places a restriction on the policyholder’s choice of contractor necessary to repair damage covered by the policy. Those restrictions would require the use of a contractor with an active license, prohibiting the contractor from placing a lien on the covered property for the work performed, ensure that all necessary permits are obtained for the work being performed, and guarantee the quality of work performed by the contractor under the policy for 3 years after all work has been completed.

 

The bill has not been scheduled for a committee hearing and has no House companion.