House and Senate Maintain Differing Views on AOB Issue
As the 2018 legislative session reaches its halfway point, the House of Representatives and the Senate continue to take such differing approaches on the “assignment of benefits” issue that it remains questionable whether any meaningful reform will pass this year. The House of Representatives acted early in the session to pass a bill dealing with several aspects of the AOB issue, including a compromise position on the most contentious issue— the one-way attorneys’ fee provision.
Despite testimony from the Office of Insurance Regulation, Citizens Property Insurance Corporation and others about the negative effects on consumers arising from the continued failure to address the AOB crisis, the Senate takes an approach that is favored water remediators and restoration specialists and is opposed by insurer groups, business groups, and certain professional trades. Opposition to the Senate approach stems from a bottom-line view that its proposals will not stem the tide of abuses and resulting rate increases.
In one positive development, a Senate committee recently abandoned a provision in the bill that would have prohibited insurers from including attorneys’ fees from being considered in ratemaking. The provision would have taken a bad situation and made it worse. Still, the remainder of the Senate proposal represents a hope that dealing with the periphery of the assignment of benefits issue will bring about reform. This is a false hope, however, as the bill does not address the root cause of Florida’s increase in water damage claims, assignments of benefits, increased loss payments and the ultimate impact on premium levels.