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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

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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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Florida’s insurance industry will apply significant pressure on lawmakers to pass assignments of benefit (AOB) reform in the upcoming legislative session as consumers face rate increases and a looming coverage availability crisis due to serious and costly abuse of the policyholder benefit.

While the industry seems to finally have reached a consensus on what is fueling the widespread AOB abuse and how to fix it, the question of whether the Florida Legislature will agree to act on the industry’s recommendations remains to be seen

The Florida Office of Insurance Regulation (OIR) and Citizens Property Insurance Corp., as well as other stakeholders, are working together with Florida lawmakers to introduce a bill for the 2017 legislative session, which begins on March 7. The goal is to keep the assignment of benefits consumer protection in place, but take away the incentive that is driving the abuse by assignees, who have included attorney groups, unregulated water mitigation, remediation, and roofing contractors.

The unanimous feeling is that Florida’s one-way attorney fee statute is the main driver of the problem, and that’s what the industry says needs to be addressed by legislation in the upcoming session. Under Florida’s current law, 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 industry says third party contractors and attorneys have been abusing the policyholder benefit, particularly for water losses, to inflate claims and fees

 

Please enjoy the full article below;

http://www.insurancejournal.com/news/southeast/2017/02/15/441784.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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In September, Hurricane Hermine broke Florida’s hurricane drought that had lasted since 2005. The category 1 storm hit the Florida Panhandle, bringing significant storm surge to the Tampa Bay area before slowly traveling up the Eastern Seaboard.

The storm weakened to a tropical storm as it moved inland in Florida, with winds topping 70 miles per hour, according to the U.S. National Hurricane Center, but it was still enough to cause widespread damage and power outages. Toppled trees in Tallahassee left some residents without power for a week

Then in October, Hurricane Matthew hit. The storm was classified as a category 3 with winds of 120 miles per hour.

“When Matthew was nearing Florida, there was a large amount of uncertainty of whether there would be more wind and storm surge or less so because the storm was paralleling so close to the coast,” said Tom Sabbatelli, RMS Hurricane Risk Expert based in the UK

 

Please read the full story below;

http://www.insurancejournal.com/news/southeast/2016/12/14/435122.htm

 

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Florida lawmakers can expect substantial pressure to tackle the assignment of benefits (AOB) and water loss claims crisis from the state’s insurer of last resort when Florida’s legislative session begins early next year.

At a governing board meeting Wednesday, leaders of Citizens stressed that rising water claims and “out of control” litigation are threatening the insurer’s long-term financial stability and will stifle efforts by Citizens to offer premium breaks to policyholders in 2017.

The company said that barring significant changes, including possible legislative action on assignment of benefits, non-hurricane losses will continue to chip away at Citizens‘ reserves and could result in policies returning to the state’s insurer of last resort as private insurers face similar challenges.

“Without significant reform, litigation, water claims and AOB pose a serious threat to the financial position of Citizens,” said Chris Gardner, chairman of the Board of Governors. “This is not a sustainable situation.”

Citizens plans to make AOB reform its 2017 legislative priority, the company said.

Please enjoy the full article below;

http://www.insurancejournal.com/news/southeast/2016/12/08/434610.htm

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Citizens Property Insurance Corp. is urging its policyholders to call Citizens first to report losses following Hurricane Matthew in order to protect themselves from assignment of benefit (AOB) scams, according to a statement from the company.

“Citizens is ready to assist our policyholders as they begin their recovery from Hurricane Matthew and get their lives back in order,” said Barry Gilway, Citizens president, CEO and executive director. “Our claims representatives are ready to help. All you have to do is call.”

In its warning to its customers, Citizens said, “Unfortunately, unscrupulous contractors and repair companies thrive in the frenzied days following any storm. Policyholders must be wary of unlicensed contractors or deals that sound too good to be true.”

The company said to protect themselves, policyholders who have experienced a loss from the storm should call Citizens first to ensure they stay in control of their claim. Further, Citizens advises policyholders not to sign anything, including an assignment of benefit, before consulting with Citizens or their insurance agent.

“Here’s why. You may be signing away your rights and be left with unfinished repairs or forced to pay a contractor for repairs not covered by your policy. The policy may also place a limit on emergency repairs until Citizens is notified to inspect damage before permanent repairs are made,” the company said

Please read the full article below!

http://www.insurancejournal.com/news/southeast/2016/10/10/428833.htm