OIR


Please call Lee Gorodetsky@954-270-7966 for free quotes on Home Insurance, Auto, Flood, Private Flood, Car, Business & Commercial & life, health Investments & group benefits as well.

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.

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Please call  Lee Gorodetsky at 954-270-7966 for free quotes on Home Insurance, Auto, Flood, Private Flood, Auto, Business & Commercial , & life, Health and group benefits as well.

An onerous version of AOB reform is on the move in the Senate, passing its second of three committees this week. SB1168, by Senator Steube, 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.

We are 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.

Please call Lee from Acentria Insurance at 954-351-1960 or my cell at 954-270-7966 for free quotes on Home Insurance, Auto, Flood, Private Flood, Car, Business & Commercial, & Life, group & financial products as well.

The 2018 Florida Legislative Session is underway, and lawmakers have wasted no time taking up legislation to address the assignment of benefits crisis plaguing the state.

While they debate which reform option to back, stakeholders say the Florida Legislature must do something this year to keep an already bad situation from getting worse.

The insurance industry, regulators, and consumer groups have tried unsuccessfully for five years to convince Florida lawmakers to reform the policyholder benefit known as AOB, which allows an insured to sign over their insurance policy rights to a third-party. The insurance industry has continued to call out what they call abuse of AOBs by vendors and attorneys who use an AOB contract to take control of a homeowner’s policy, inflate a claim, then sue an insurance company that disputes the bill.

Evidence of that abuse is mounting in the form of increased litigation and insurance rates.

According to the Consumer Protection Coalition, a group of business leaders, consumer advocates, real estate agents, construction contractors, insurance agents and insurance trade groups fighting for reforms to AOB abuse, the number of lawsuits involving an AOB grew from 405 in 2006 to more than 28,000 in 2016 – an increase of more than 6,800 percent. Last year, 20,000 lawsuits were filed as of July.

But lawmakers have feuded with the industry over the right reforms to enact in previous years, and this year may not be any different.

Please enjoy the full article below;

https://www.insurancejournal.com/news/southeast/2018/01/17/477337.htm

Please contact Lee at Acentria Insurance at 954-351-1960 for free quotes On Home Insurance, Flood Auto, Private Flood, Car Insurance, Business & Commercial policies and Life & Financial products as well.

Hurricane Irma’s damaging rampage through Florida may require the state fund that provides backing to private insurers to pay up to $5.1 billion in claims.

Anne Bert, chief operating officer for the Florida Hurricane Catastrophe Fund, said Thursday the fund will be able to pay claims with cash. That means the fund will

The financial health of the fund is important because the state can impose a surcharge on most insurance policies to replenish it if money runs out. Some critics have called the surcharge a “hurricane tax.”

The fund entered storm season in good financial shape and new estimates conclude the fund could borrow up to nearly $8 billion.

The $5.1 billion claims estimate is preliminary, but actuaries said they based it on experience from previous hurricanes.

not have to borrow any money.

Please enjoy the full article below;

https://www.insurancejournal.com/news/southeast/2017/10/30/469653.htm

Please call Lee at Acentria Insurance at 954-351-1960 for free quotes on Home Insurance, Flood, Private Flood, Auto, Business & Commercial and Life & Financial products as well.

Although insured losses as a result of Hurricane Irma will not be as severe as originally forecast, the storm still represents a sizeable catastrophe event that will test the infrastructure and potentially strain the financial wherewithal of some local and regional carriers in Florida, particularly those that are geographically concentrated, according to a new briefing from A.M. Best.

The Best’s Briefing, titled, “Hurricane Irma Tests Newer Participants in Florida Market,” notes that over the past decade, the number of more concentrated local/regional writers in Florida’s insurance market has increased as national writers pulled back on the state

The state-formed Citizens Property Casualty Insurance Corporation took on much of that risk exposure, and as a result, experienced significant financial pressure. This led to a fairly successful depopulation program, whereby private insurers were given incentives to assume policies from Citizens. This, along with other factors that included benign weather in Florida and favorable reinsurance pricing, prompted many new insurance companies to form.

According to the report, a number of new insurance companies were formed since 2007, writing nearly a fifth of the property market lines: homeowners, farmowners, fire and allied, and commercial multiperil (non-liability). Hurricane Irma represents the first severe event to test the strength of these business models, particularly with regard to risk selection, loss mitigation and potentially their reinsurance programs.

The report also states that with Hurricane Irma occurring in such close proximity to Hurricane Harvey, the demand for independent catastrophe claim adjusters has increased. A.M. Best-rated entities had already started strengthening their claims processes in response to the state’s Assignment of Benefit issues. Newer companies may face additional pressure from a lack of experience as well as limitations due to scale.

Please enjoy the full article below;

http://www.insurancejournal.com/news/southeast/2017/09/18/464615.htm

The ads were out before the storm hit so be careful. Please remember to call me at The Acentria office at 954-351-1960. We also provide free quotes on Home Insurance, Auto, Flood, Private Flood, Car, Business & Commercial and Life, group and Health Insurance  products.

As Florida residents return home after being evacuated by Hurricane Irma, the pressure is on the insurance industry to keep a bad situation regarding assignment of benefits abuse in the state from getting worse.

Florida regulators, carriers, industry trade groups and lawmakers are all echoing the same advice to policyholders: now’s the time to contact your agent or insurer and file claims.

“CFO Jimmy Patronis and Insurance Commissioner David Altmaier encourage Floridians to be prompt in notifying their insurance companies and cautious of repair deals that sound too good to be true,” the Florida Office of Insurance Regulation alerted consumers in a statement released Tuesday.

While Florida was spared the worst-case scenario by Hurricane Irma in terms of the storm’s strength, the state still suffered significant damage from wind and coastal flooding. Agents and carriers are just starting to deploy resources to affected areas, and stakeholders say timing will be of the essence as “bad actors” will be on the prowl for homeowners willing to assign to them the right to obtain insurance benefits to deal with damage to their homes.

“All consumers need to be on alert as they recover from Irma for fraudulent schemes and assignment of benefit scams so they don’t unknowingly sign away their rights,” said Chris Gardner, chairman of Citizens board of governors. “If unsure, agents are prepared to advise you and guide you through the claims process.”

Please enjoy the full article below;

http://www.insurancejournal.com/news/southeast/2017/09/13/464047.htm

Please call Acentria Insurance at 954-3151960 to ask me about quotes for Home, Flood, Private Flood, Auto, Business & Commercial and Life & Financial products as well.

They say they have no choice after the Florida Legislature for the fifth year in a row failed to address the crisis in water damage claims abuse.

“We keep saying help us try to solve this problem,” said Michael Carlson, president of the Personal Insurance Federation of Florida.

AOB will ultimately be addressed by the marketplace if lawmakers don’t do anything

Since lawmakers reneged on enacting reforms, insurance carriers are now taking matters into their own hands and the state’s regulator is warning consumers to be prepared.

“We will continue to see homeowners’ insurance companies raise their rates for our consumers in a best-case scenario, and in a worst case scenario just simply stop offering their products in certain regions of the state,” Insurance Commissioner David Altmaier told the Florida Cabinet last month

Please enjoy the full article below;

http://www.insurancejournal.com/news/southeast/2017/07/19/457961.htm

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