problems. SB 596 passed the Senate Banking and Insurance Committee on February 1, with the all-important language stating that an agreement is void if “it purports to assign or transfer the right to enforce payment for post-loss benefits in the policy,” still in the bill. This provision cuts off the vendors from getting attorneys’ fees, and is the root of this problem. Unfortunately, however, several Committee members said their support was contingent on Senator Hukill amending that provision in the next Committee. CS/HB 1097 by Representative Caldwell has removed that “enforcement” provision. CS/HB 671 by Representative Broxson, which passed the House Government Operations Subcommittee on February 8, does not address “enforcement.”
In addition to the enforcement provision, CS/SB 596 would provide for the following:
- The insurer must be notified of the assignment within 3 business days; and an estimate for materials and services must be provided.
- Within 3 business days following the insurer being notified, the policyholder has a right to rescind without penalty, except for reimbursement for work already performed to mitigate or repair; if the Governor has declared a state of emergency, the policyholder has 5 business days.
- The assignment must contain in 14-point type a statement to the policyholder describing the right to rescind; that the assignment cannot impose any kind of cancellation fee or a check processing fee, or add a provision for overhead and profit; that the final bill cannot exceed the estimate, unless approved by the policyholder and insurer.
- The transfer of the right to enforce payment is prohibited and anything that prevents or inhibits an insurer from communicating with its policyholder is prohibited.
- The assignment cannot transfer the authority to adjust, negotiate, or settle the claim to anyone who is not otherwise authorized to do so; and provides that the law will apply to all assignments which are executed after the effective date.
- The provisions of the bill will not apply to powers of attorney granted to management companies, family members, or guardians.
We are continuing to aggressively lobby for a strong bill on this issue, and will work to prevent a detrimental bill from being passed.
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