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The push for assignment of benefits (AOB) reform in the 2019 Florida legislative session is in full swing, and the insurance industry and consumer advocates have pulled out all the stops to emphasize their contention that abuse of a policyholder benefit has led to a full-blown insurance crisis in the state.

Whether their efforts will be enough this year after six years of failed reform attempts remains to be seen. Lawmakers are weighing legislative options, but a bil

The industry isn’t giving up on what is its top issue in the 2019 session.

“We remain hopeful of the process and that members of the [Florida] Senate and House will work through the various issues that have been raised and will land on a piece of legislation that will be helpful for consumers and that actually address these issues,” said Michael Carlson, president of the Personal Insurance Federation of Florida (PIFF), which represents personal lines insurers in the state.

The AOB problem in Florida stems from unlicensed water remediation and roofing contractors who have homeowners sign over their insurance policy rights in exchange for repairs to their homes. The contractors, typically working with an attorney, file inflated or fake claims, and then pursue lawsuits against insurers when those claims are disputed or denied.

Florida’s one-way attorney fee statute, which the insurance industry, consumer advocates and the state’s insurance regulator agree is driving the AOB abuse, leaves insurers footing the bill for the inflated claims and the attorney fees if the insurer is found to have underpaid the claim by any amount.

“After six or seven years of this campaign to make changes and having looked at this issue from several different vantage points and a lot of data the industry has concluded this is an attorney fee-driven cottage industry,” said Carlson.

The current remedy supported by the industry and Florida’s insurance regulator was introduced by Florida Senator Doug Broxson, who chairs the Senate Banking & Insurance Committee. Senate Bill 122 would continue to allow policyholders and beneficiaries to recover attorney fees under Florida’s one-way attorney fee statute but would prohibit assignees from obtaining attorney fees.

l backed by the industry has already stalled in the Senate Banking & Insurance Committee.


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