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Wednesday, April 24 2019
After seven years of failed attempts, Florida legislators have passed property insurance reform to address the abuse of a policyholder benefit known as assignment of benefits (AOB).
The insurance industry and consumers advocates say the abuse has caused higher insurance premiums in the state and made insurance harder to obtain.
By a vote of 25-14 by the Florida Senate on Wednesday passed a measure (SB 122) that addresses the abuse of post-loss AOBs for residential or commercial property insurance claims and limits one-way attorney’s fees related to AOB agreements. The bill was a committee substitute for House Bill 7065, which passed the House on April 11.
The bill’s provisions:
The Senate bill was sponsored by Senator Doug Broxson, chair of the Insurance & Banking Subcommittee.
Florida Governor Ron DeSantis is expected to sign the bill, which would then become law on July 1, 2019.
Advocates of reform praised the passage of the bill, saying it was long overdue and will bring much needed relief to Florida homeowners.
Insurance Commissioner David Altmaier issued the following statement to Insurance Journal following the passage of the AOB reform,
“OIR’s main focus is to work towards decreasing insurance costs for consumers living in Florida, while balancing the solvency needs of companies operating in Florida. The passage of HB 7065 is a significant step towards stemming the insurance product affordability and availability crisis that has grown from years of compounding AOB abuse.”
President of the Florida Association of Insurance Agents (FAIA) Jeff Grady said the passage of AOB reform is also a big win for insurance agents.
“This a long awaited day for Florida consumers and the industry as a whole. Agents have been impacted by AOB fraud resulting in poor loss ratios and cancellations of company appointments,” Grady said. “We are grateful for the leadership within both the legislature and the Florida cabinet to finally enact AOB reform and eliminate this fraud from our insurance marketplace.”