SENATE BANKING & INSURANCE COMMITTEE REPORT – February 4, 2019

By Niki Donner

TALLAHASSEE — The Banking & Insurance Senate committee met Monday continue discussions regarding “assignment of benefits” insurance practice in Florida.

Chairman Doug Broxson, R-Gulf Breeze indicated the committee will vote on the attorney fee awards bill. The chairman said, “this meeting will be interactive and have a very limited number of people speaking to the issue.”

Chairman Broxson’s bill allows for revising certain attorney fee provisions in the Florida Insurance Code to specify that an insured or beneficiary entitled, under certain circumstances, to attorney fees under an insurance policy or contract must be a named insured or named beneficiary.

The bill’s revisions come from the controversial AOB insurance practice that centers around contractors and attorneys favoring the assigning benefits, while insurers argue it drives up rates as well as litigation.

Chairman Broxson’s committee hosted speakers from the previous meeting to address SB 122 and invited constituents to share problems that resulted from the issue. The speakers included former Supreme Court Justice Kenneth Bell, who argued in favor of limiting the one-way attorney fees statute, representing the Personal Insurance Federation of Florida, an attorney speaking on behalf of Orlando attorney Lee Jacobson, who argued against the bill, while representing the Florida Justice Association trial attorneys, Insurance Information Institute’s Chief Actuary James Lynch, and Joshua Reynolds, owner of Wrightway Emergency Services. Additional commentary was provided by Florida Insurance Commissioner David Altmaier, and Citizens Property Insurance Corp. President/CEO Barry Gilway.

Justice Bell discussed AOB’s are the latest abusive claims practice and cost driver created by attorneys to generate fees, not to protect the consumer. He says with the intent of the one-way attorney fee statute, the current AOB system harms all consumers.

While discussing Florida’s assignment of benefits crisis, James Lynch said, “49 other states have AOB’s in their policies, but Florida stands alone in the issue.” Chairman Broxson asked for him to elaborate on this statement, from which Lynch mentioned Florida is unique due to the assignment going to the contractor.

The committee asked for recommendations from Lynch. Lynch responded with, “Insurance Information Institute does not take positions on issues, but when this becomes unique to the state you have to look at what is different from other states. The committee needs to look at where the issue continues to grow, such as in homeowner insurance and auto glass.”

But an adversary of the bill, restoration company owner Joshua Reynolds, attests to the value of the AOB during insurance claims for contractors to help consumers. Reynolds made note that the insurance companies charge a premium with a promise to make customers whole.

Constituents recognized the given presentations and pleaded their individual cases to the committee, while mentioning this is up to the legislature to address issues surrounding AOB’s and not the Courts.