Legislators


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The Florida insurance market has been a hotbed of controversy over the last year, and many are looking at the Florida State Legislature to alleviate some of the concerns coming from consumers, businesses and the industry itself.

From insurance fraud to workers’ compensation to the escalating assignment of benefits (AOB) issue, there is no shortage of insurance topics for lawmakers to discuss when the 2017 session begins March 7.

Workers Comp

Legislation addressing the tailspin of Florida’s workers’ compensation market is considered a top priority, thanks to several 2016 decisions from the Florida Supreme Court.

AOB

The industry is backing a bill (Senate Bill 1038) drafted by the Florida Office of Insurance Regulation and sponsored by State Senators Dorothy Hukill and Kathleen Passsidomo to address the abuse of assignment of benefits in Florida, particularly related to water claims

Insurance Fraud

Florida CFO Jeff Atwater announced that he is working with State Sen. Jeff Brandes and Rep. Holly Raschien to “tackle the ever-evolving issue of insurance fraud in Florida.”

Several bills have been filed, including Senate Bill 1012, 1014, and House Bill 1007 and 1009.

Please enjoy the full article below;

http://www.insurancejournal.com/news/southeast/2017/03/03/443403.htm

Please call L & S Insurance at 1-888-244-7400 for free quotes on Home Insurance, Auto, Flood, Private Flood, Business & Commercial & Life & Financial products as well.

Florida now has legislation backed by the top Florida insurance regulator and the industry that promises to curtail homeowners insurance abuse under the assignment of benefits (AOB) feature.

Senate Bill 1038, filed Feb. 17 by State Sen. Dorothy Hukill and co-sponsored by Sen. Kathleen Passidomo, seeks to clarify the intent of the assignment of benefits provision for policyholders and limit the scope of benefits provided to those other than the named insured on the policy

The assignment of benefits bill would also instill specified conditions for assignment agreements to be valid. The bill stipulates that an assignment agreement will not be valid unless it meets the following conditions:

  • Agreement is in writing and is executed by all named insureds
  • Allows insureds to rescind the assignment agreement within seven business days without penalty
  • Requires the assignee to provide a copy of the assigned agreement to the insured no later than three business days after the agreement is executed;
  • And includes a written, itemized, per-unit cost estimate of the work to be performed by the assignee.

Other stipulations of the bill include: prohibiting certain provisions in an assignment agreement; specifying requirements for an assignee or transferee; and requiring an assignee to meet certain requirements as a condition precedent to filing suit under a policy.

Under Florida’s current one-way attorney fee statute, 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 goal of the bill is to keep the assignment of benefits consumer protection in place, but take away the incentive – the one-way attorney fee – that the industry claims is driving abuse by assignees, who have included unregulated water mitigation, remediation and roofing contractors typically working with attorney groups.

If passed by the Legislature and signed into law, the bill would become effective July 1, 2017

Please enjoy the full article below;

http://www.insurancejournal.com/news/southeast/2017/02/28/443010.htm

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Assignment of benefits abuse has escalated over the last five years to the point where it is now a serious disruption to Florida’s insurance market.

The abuse, which is especially rampant in South Florida, stems from unscrupulous contractors and attorneys cashing in on homeowners dealing with a water loss, such as a burst pipe or roof leak. The “bad actors,” as they have been dubbed by the industry, use an AOB to acquire the homeowners’ insurance benefits, file inflated claims, and then lawsuits against insurers when those claims are disputed or denied

The industry hopes this will be the year that the Florida Legislature addresses the problem.

AOB is such a hot topic in Florida right now that it dominated discussions on almost every panel and between attendees of the Florida Chamber of Commerce’s Florida Insurance Summit held Feb. 1-3 in Miami. A glance at the numbers from various Florida sources tells the story of why:

  • Frequency of water claims rose 46 percent and severity increased 28 percent between 2010 and 2015 (OIR 2015 Data Call)
  • AOB property insurance claims totaled 28,000 in 2016, up from 843 in 2010 and 405 in 2006 (Florida CFO Jeff Atwater)
  • Florida’s Citizens saw a 30 percent increase in new lawsuits filed against the insurer between January and November 2016 (Citizens)
  • 50 percent of Citizens’ water-related claims resulted in litigation in 2016, up from 15 percent in 2011 (Citizens)
  • As of October 2016, Citizens had 9,306 litigated claims pending and continues to receive an average of approximately 850 new claims per month (average of approximately 980 per month from August to October)
  • In South Florida, the average AOB claim costs more than $32,000, nearly triple the average of non-AOB claims (Florida Consumer Protection Coalition)

Please enjoy the full article below;

http://www.insurancejournal.com/news/southeast/2017/02/09/441410.htm

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Assignment of benefits abuse has become such a well-known problem in the state of Florida this year that it now just goes by the nickname “AOB.”

The issue with AOB comes from when a policyholder suffers a loss, such as water damage to their home, and then signs over their insurance policy to the person repairing the damage. Repair contractors utilizing the AOB on behalf of the insured often work with attorneys who then sue the insurance company over the claim

Florida’s one-way attorney fee statute has encouraged these suits because the insurance company is typically left paying the attorney fees. In many cases, policyholders don’t know the lawsuit has even been filed.

Florida’s state-run insurer Citizens has been the most affected by this abuse. Citizens CEO and Executive Director Barry Gilway says that the negative impact on the pricing of property insurance and availability of coverage in Florida is getting worse. Gilway said while the gross misuse of the AOB form is a major component of the issue, the problem has really become a litigation issue relating to all non-wind water claims.

“The situation is deteriorating even further at Citizens,” Gilway told Insurance Journal. “Despite a book of business that has stabilized at around 490,000 policies, we are now projecting the number of lawsuits received each month will grow from 900 this year to over 1,000 in 2017. And yes, it is the same 10-15 firms that continue to be responsible for 60 percent of the litigation across the state.”

Please click the link below to read the full story!!

http://www.insurancejournal.com/news/southeast/2016/12/13/434926.htm

In Fort Lauderdale and all of S. Florida some people do not get covered as they should. Most do, but this will help the few who did not get paid. They will all be costly and come with Litigation so I know for sure we will all pay for this with more rate hikes for many years to come. Water Damage claims, Hurricane Matthew and now this?? How much more can we take. Please call L & S Insurance at 1-888-244-7400 for free quotes on Home Insurance, Auto, Flood, Private Flood, Business & Commercial & Life & financial products as well.

John Sebo v. American Home Assurance Company, Inc. Case No.: SC14-897 (Fla. Dec. 1, 2016) image

John Sebo purchased a four year old home in Naples, Florida. American Home Assurance Company (AHAC) provided homeowners insurance. The policy insured against “all risks.” Shortly after the purchase, water began to intrude throughout the home. It became clear that the house suffered from major design and construction defects. AHAC denied coverage for most of the claimed losses. Trial proceeded against AHAC, where Mr. Sebo sought a declaration that the policy provided coverage for his damages.
Please read the full article below;

 

Please call L & S Insurance at 1-888-244-7400 for free quotes on Home Insurance, Auto, Flood, Private Flood, Business & Commercial & Life & Financial products as well.

Abuse of assignment of benefits (AOB) from water loss claims has become a full-blown Florida insurance crisis that will mean higher insurance rates next year and for the foreseeable future for every Florida policyholder, according to Citizens Property Insurance Corp. CEO Barry Gilway and Chief Risk Officer John Rollins.

“We are going to have a round of rate increases from private carriers,” said Rollins. “South Florida will definitely have a rate increase. The question is more open in the rest of the state, but the trends are very disturbing.”

Private insurer executives have echoed the warning—and say hikes of as much as $1 billion will be needed.

The issue now most commonly referred to as just “AOB” took center stage at the Florida Association for Insurance Reform’s conference on April 28. Several industry experts said AOB is no longer just a problem for Citizens, the state-backed property insurer, and maintained the impact will go far beyond rates if the “crisis” isn’t addressed. The overall Florida market will also suffer, especially if the state is hit by a serious catastrophe.

“[AOB] is also trickling into the reinsurance pricing,” Bruce Lucas, chairman & CEO of Heritage Insurance said at the FAIR event. “The number one question asked of us by reinsurers is, ‘What are you doing about AOB?’ because after a storm, it could be a big issue.”

Citizens, which has seen AOB claims skyrocket, was the first to highlight the issue in its rate filing last summer. Now the insurer is retooling its efforts to combat the AOB abuse in light of Florida lawmakers’ failure to enact a legislative solution.

Please enjoy the full article below!

http://www.insurancejournal.com/news/southeast/2016/05/03/407257.htm

Please call L & S Insurance at 1-888-244-7400 for free quotes on Home Insurance, Auto, Flood, Private Flood, Business & Commercial & Life & financial products as well.

The Florida Cabinet has selected David Altmaier to be the state’s new insurance commissioner.

Altmaier, 34, is currently a deputy commissioner within the Florida Office of Insurance Regulation. He will replace Kevin McCarty, who is stepping down after 13 years on the job

Altmaier was one of three candidates, all OIR employees, interviewed at a special Cabinet meeting today.

He was selected after members of the Cabinet could not agree at previous meetings or at today’s on other candidates including Rep. Bill Hager; Jeffrey Bragg, a former federal insurance official; or Belinda Miller, who is OIR chief of staff.

Florida law requires that the governor and CFO must agree on the choice of an insurance commissioner, who can then be hired with the support of at least one other Cabinet member.

Attorney General Pam Bondi and Agriculture Commissioner Adam Putnam joined Gov. Rick Scott and CFO Jeff Atwater in supporting Altmaier.

 

Please enjoy the full article below!

http://www.insurancejournal.com/news/southeast/2016/04/29/407083.htm

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