jump to main menu jump to subject menu jump to content jump to footer


Insurance Consumer Advocate

Sha'Ron James


Contact Us
Mailing: 200 East Gaines St.
Tallahassee, FL 32399-0308

For Consumer Assistance:
Contact the Division of
Consumer Services within the
Department of Financial Services

Online at
Consumer Services
Toll-free in Florida
1-877-MY-FL-CFO
(1-877-693-5236)
Out of State
(850) 413-3089
Español
(850) 413-3033

Public Records Requests



Follow the ICA on Twitter


design placeholder only

Insurers reach out to Gov. Scott as AOB fight grow testy

 

Date: April 10, 2017
Source: Palm Beach Post
Author:  Charles Elmore

 

Not going so fast: Legislation that insurers and their allies wantas state lawmakers round the clubhouse turn on a session that ends in early May.

Picking up: Bristling references to scams and smears and appeals for help to Gov. Rick Scott.

Fun fact: The biggest single contribution to Scott’s Let’s Get to Work committeein 2017 has been$250,000 from Skye Lane Properties, a subsidiary of Heritage Property & Casualty Insurance Co.

The beef now, as it has been for years, is overlegislation insurers say is needed to rein in contractors and lawyers who are driving up consumer rates on claims like damage from faulty plumbing or roofs. It starts when consumers sign “assignment of benefits” agreements, giving third parties control of insurance benefits. Then contractors go to court, where their attorneys can pick up big feesunder laws designed to protect little-guy consumers, but insurers say are being hijacked.

Opposing them: legislators who are sometimes also lawyers. They say insurers could solve the problem by paying fair claims quickly, or if cases are bogus, winning in court.

“We are halfway through the 2017 legislative session, and it appears another year may pass without meaningful reforms to end AOB abuse in Florida,” lamentedDulce Suarez-Resnick, an independent insurance agent in Miami and member of the Latin American Association of Insurance Agents. “Make no mistake: If the Legislature fails to address the growing cancer of AOB for a fifth straight year, Florida’s hardworking families are the ones who will lose.”

A coalition supporting the legislation presented petition signaturesand called for action last week.

On Thursday, the CEO of state-run Citizens Property Insurance Corp. talked to Gov. Rick Scott about AOB. So did Florida insurance commissioner David Altmaier, who supports reforms insurers want.

“Gov. Scott has continued to meet with industry leaders and consumers on the need to fix the current AOB issue in Florida,” a Scott spokeswoman said. “The call with Commissioner Altmaier and President Gilway this morning was one of the many conversations and meetings he has had with them on AOB over the past few months.”

Scott’s spokesman continued, “Our office will continue to work with the industry to develop a legislative solution that prevents homeowner’s insurance from continuing to rise.As of today, while both the House and the Senate have AOB legislation moving, the proposals are very different. We encourage the legislature to also work with the industry and consumers to fix the skyrocketing costs on homeowners and close the loopholes which exist in current law that drive-up costs on homeowners due to attorney’s fees for AOB claims.”

It has been prickly fight. Insurance companies are “smearing” her, said Sen. Anitere Flores, R-Miami, after her committee last week passed a bill, SB 1218, that theydid not like. Sponsored by attorney and state Sen. Gary Farmer, D-Fort Lauderdale, the bill would license water clean-up contractors for the first time and add some consumer protections, but no changes to the state’s “one-way” attorney fee rules insurers say are being abused. Instead, insurers would be barred from passing legal fees on to customers when they lose.

As The Palm Beach Post has reported, sorting through claims of a crisis can be tricky. Florida’s largest insurer, Universal Property & Casualty Insurance Co., told stock analysts the severity of its AOB claims has been falling for a couple of years and the frequency was “nothing major.” It did this by responding to claims quickly, its CEO said.

Citizens blamed AOB for a $27 million loss in 2016, but it also spent six times that amount, $181 million, on optional offshore reinsurance that did not pay any claims.

Citizens compiled a list of 13 law firms it says are the behind the most serious problems. One of them isTrujillo Vargas Gonzalez Hevia, in which House Appropriations Chairman Carlos Trujillo is a name partner. A reporter asked whether Trujillo was being accused of scamming people, floridapolitics.com reported.

“I did not say that or infer it, sir,” Gilway said. “What I’m saying, basically, is: There are 13 firms that are driving this, from Citizens’ perspective.”

For his part, Farmer said the state-run insurer could make things better by paying claims quickly: “Citizens is the problem — not AOB, not attorney fees.”