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Insurance Consumer Advocate

Sha'Ron James

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Florida Bill on Assignment of Benefits Retains Attorneys' Ability to Collect Fees


Date: March 15, 2017
Source: Best's News Service


A Florida senator has introduced legislation that would allow attorneys to charge fees in assignment of benefits cases, contrary to new insurance industry-backed legislation that prohibits the practice in an attempt to discourage it. Senate Bill 1218 has been referred to several committees, including Banking & Insurance and Regulated Industries. The bill’s introduction follows assignment of benefits reform legislation recently offered by Republican Sen. Dorothy Hukill, with the support of Insurance Commissioner David Altmaier. While regarded as similar, the bills have one significant difference — Hulkill’s bill would prevent attorneys from being awarded fees in claims disputes involving third parties acting on behalf of insureds who assigned their claim to third parties, usually after suffering water damage. Courts in recent years extended to third parties the ability to gain attorneys’ fees in assignment of benefits cases, authority that had only been granted to the insured previously (Best’s News Service, Feb. 28, 2017). Attorney fees in assignment of benefits cases are the biggest cost driver in the system, said Liz Reynolds, director of state affairs, southeast region for the National Association of Mutual Insurance Companies. Reynolds said while assignment of benefits is not unusual, using it while allowing attorneys to collect fees from insurers in such cases has created a situation that is open to abuse. “I hope Sen. Hukill’s bill is the one that moves,” Reynolds said. The American Insurance Association said any assignment of benefit reforms that fail to remove the incentive for attorneys to collect recovery fees in such cases and generate claims and litigation is insufficient. The top five writers of homeowners multiperil insurance in Florida during 2015 were Universal insurance Holdings Group, with an 8.54% market share; Tower Hill Group, with 7.62%; State Farm Group, with 7.00%; Citizens Property Insurance Corp., with 5.74%; and Federated National Insurance Co., with 4.65%, according to BestLink.