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Insurance Consumer Advocate

Sha'Ron James

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Tallahassee, FL 32399-0308

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Insurance companies on consumer panel defend industry practices from critics' censure


By Gray Rohrer, Florida Current

Insurance company representatives defended industry practices criticized by consumer advocates and trial lawyers Wednesday during a meeting of a panel convened by state Insurance Consumer Advocate Robin Westcott that will submit recommendations to state lawmakers.

Westcott organized the Homeowners’ Bill of Rights Working Group and suggested that examinations under oath -- sworn statements under questioning by lawyers that insurance companies sometimes require of consumers as a condition of receiving a claim -- have parameters set out in statute to prevent abuses by companies seeking to deny valid claims.

“I think there is some merit in putting some structure around (examinations under oath),” Westcott said. Representatives of insurance companies on the panel, however, said laws against bad faith and court decisions prohibiting companies from asking irrelevant questions during EUOs, scheduling them an inconvenient times, or using other tactics to deny valid claims are sufficient. Plus, the EUOs are a useful tool for companies to investigate claims to ensure they aren’t bogus, since false claims drive up the cost for all customers, they said.

“There are remedies for inappropriate questions for EUOs,” said State Farm lobbyist Allen McGlynn. “There’s a lot of good case-law in the state of Florida that says, ‘Here is how these EUOs have to be conducted.’ It’s not like this is all just happening out there in a vacuum.”

Westcott also pushed for more rules against insurance companies using credit or background checks to void policies after a claim is made, instead of using those checks to screen out customers in the first place. The practice, she said, puts homeowners in danger of losing their home for having no insurance because they end up having a gap in coverage once their entire policy is voided, in addition to having their claim denied.

Regulators slapped a $1.3 million fine on Universal Property & Casualty Insurance Co. for that practice earlier this year, which the company is challenging. The industry representatives on the panel suggested waiting to see whether the fine is upheld before making significant changes to state law or adding provisions in new policies. The panel is scheduled to reconvene Thursday in House Office Building Room 404 at the Capitol at 9 a.m.