Chief Financial Officer Tom Gallagher with
Senator Mike Fasano, left, and Representative David Rivera, right.
STRONGER CONSUMER PROTECTIONS NOW IN PLACE FOR FLORIDA'S INSURANCE CONSUMERS
Florida Chief Financial Officer Tom Gallagher commended state lawmakers for approving legislation that will improve protections and increase the rights of Florida’s insurance consumers, especially the state’s elderly.
One of the measures, amended on to Senate Bill 2994 and passed, would require insurance companies and agents offering annuity products to seniors over the age of 65 to clearly document the basis for selling the product, including consideration of a senior’s financial and tax status, as well as investment objectives. It would also give the Department of Financial Services, which Gallagher oversees, and the Office of Insurance Regulation the authority to take corrective action if a company or agent violated the law.
“Annuities can be an effective investment tool for many Floridians wanting a steady stream of income for retirement,” said Gallagher, who credited Sen. Jeff Atwater and Rep. Dave Murzin for sponsoring the original annuities legislation. “But some of our state’s seniors are being preyed upon by agents who are motivated by commission payments, not consideration of a senior’s financial circumstances. This legislation will allow us to hold companies and agents accountable for the products they sell and the investment advice they give.”
Also amended on to SB 2994 were much-needed protections to consumers insuring homes or automobiles, including requiring insurance companies to reinstate coverage when a consumer’s insurance policy is canceled for non-payment by the mortgage company.
“For every Florida consumer whose mortgage company has failed to make a payment, this legislation will protect them from losing their insurance coverage,” Gallagher said.
The legislation restores a standard of “like, kind and quality” for replacement parts, a requirement which had been in place in department rule for nearly 10 years. It also establishes standards for dealing with total loss of automobiles to ensure consumers are paid a fair price when their car is totaled in an accident.
The legislation also prohibits insurance companies from mandating arbitration as the sole claims-dispute resolution process in lieu of a consumer’s statutory right to have the claim mediated. Arbitration can place a considerable burden on the insured, both in terms of time and money, which may lead some consumers to accept what they consider an unfair settlement of their claim.
Other strong provisions in the bill include requiring insurance companies to refrain from canceling coverage for homeowners due to a water damage loss that was rectified, as well as disclose to applicants who are denied coverage the reason for denial, including information used from CLUE reports.
Finally, the legislation calls for a study to be done on the feasibility of creating a state-sponsored insurer to offer sinkhole insurance and creates a dedicated consumer contact within the Department of Financial Services to track trends and provide information to state policymakers regarding sinkholes.
“Consumers deserve to be in the loop on decisions made by their insurance companies so they know exactly what’s going on with their policy or claim,” Gallagher said. “This legislation puts the consumer first and demands consumers receive fair and equitable treatment from insurance companies.”
Gallagher said Sen. Mike Fasano and Rep. David Rivera were instrumental in getting the consumer protections approved.