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.

An onerous version of AOB reform is on the move in the Senate. SB1168, by Senator Steube, passed its first committee of three committees this week. The bill amends current statutes to provide that attorney fees may not be included in the insurer’s rate base and may not be used to justify a rate or rate change. 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, 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 is not on the Judiciary committee in week 4, so it won’t be on that agenda prior to week 5. 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.

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 call Lee at 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.

A U.S. government weather forecaster said on Thursday that La Niña conditions are likely to persist through the Northern Hemisphere winter.

La Niña is characterized by unusually cold ocean temperatures in the equatorial Pacific Ocean and is linked with floods and droughts. It is the opposite phase of what is known as the El Niño Southern Oscillation (ENSO) cycle.

The National Weather Service’s Climate Prediction Center (CPC) in its monthly forecast pegged the chance of La Niña developing at about 85 to 95 percent, with a transition to ENSO-neutral expected during the spring.

“Based on the latest observations and forecast guidance, forecasters believe this weak-to-moderate La Niña is currently peaking and will eventually weaken into the spring,” the agency said.

The agency last month projected the chance of the phenomenon developing through the Northern Hemisphere winter at about 80 percent, with a transition to ENSO-neutral most likely during the mid-to-late spring.

La Niña emerged in 2016 for the first time since 2012, before fading in early 2017.

Please enjoy the full article below;

https://www.insurancejournal.com/news/national/2018/01/12/477026.htm

Please call Lee at 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 as well.

In the wake of Hurricanes Harvey, Irma, and Maria, the 2017 hurricane season is projected to be the most expensive in history, with total estimated economic losses exceeding $200 billion.

According to a new report from MacKinsey & Company, each of these three major hurricanes are expected to rank among the 10 most costly insured natural catastrophes on record globally.

Based on their research, McKinsey & Company anticipates that these record-breaking disasters will have a number of effects on the insurance industry.

Here are the key effects of 2017’s historic hurricane season, as outlined by McKinsey & Company researchers:

        • These disasters will, for most insurers and reinsurers, be a story of earnings volatility and not of capital due to the record-high surplus of the U.S. property and casualty industry.
        • Personal-auto and business-interruption insurance will be the biggest unexpected losses, given that flooding is typically not covered in homeowners’ contracts.
        • These consecutive disasters will stress insurance operations, including large-volume claim management and loss creeps, due to spikes in adjustment expense.
        • In the coming months, insurers will likely face a significant consumer experience and public relations risk. Insurers need to go into crisis-management mode and deliberately and proactively address the risk, starting now.
        • The long-term impact on premium rates will depend on the willingness of investors to recapitalize and continue to invest. If investors get scared by a new trend of increased losses in the wake of natural disasters, rate increases may be substantial and contribute to the ending of a prolonged soft cycle.
      • Please read the full article below;
      • http://www.propertycasualty360.com/2018/01/09/lessons-and-consequences-of-the-record-setting-201?eNL=5a5633b1140ba01a4996dd35&utm_source=PC360_PersonalLinesPro&utm_medium=EMC-Email_editorial&utm_campaign=01102018

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 Federal Emergency Management Agency (FEMA) has completed a reinsurance placement with 28 private reinsurers to help the National Flood Insurance Program (NFIP) recover losses it may have to pay in 2018.

Expanding on its first private reinsurance placement last year of $1.042 billion, the 2018 deal calls for FEMA to transfer up to $1.46 billion of the NFIP’s financial risk to the private reinsurance market. This new reinsurance agreement is effective from January 1, 2018, to January 1, 2019.

Please enjoy the full article below;

https://www.insurancejournal.com/news/national/2018/01/08/476500.htm