Bill to Address Insurance Claims Abuses Advances

Sun Sentinel

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A bill aimed at slowing insurance rate increases by curbing claims abuses advanced out of a key state House committee on Tuesday, despite complaints from both sides about key provisions.

The House Insurance and Banking Subcommittee spent more than two hours debating Rep. James Grant’s proposed revisions to a bill he filed just last week, before rejecting the revisions and advancing the original measure.

Neither the original bill nor the proposed revision contained the element sought most of all by the insurance industry — restrictions on collection of so-called one-way insurance fees. Those fees, collected by attorneys of repair contractors working under assignment of benefits, are incentives driving sharp increases in litigation, costly settlements and rising premiums, insurers say.

Meanwhile, a bill filed last month in the state Senate by Dorothy Hukill, R-Ormond Beach, that would prevent contractors working under assignments from collecting fees under the so-called “one-way insurance fee” statute appears dead.

Sen. Anitere Flores, chair of the Senate Banking and Insurance Subcommittee, said Tuesday that she’s not sure when or if she will give her committee the opportunity to vote on a bill that would bar collection of one-way attorney fees by contractors who sue insurance companies while working under an assignment of benefits.

Flores said in January that she would evaluate any proposal based on its prospect to reduce insurance costs for consumers. On Tuesday, she said, "We are going to monitor what happens in the House and it is still early in the process to determine the full impacts of any changes and how that would affect rates.”

Hukill’s bill was crafted with input from state-run Citizens Property Insurance Corp., state Insurance Commissioner David Altmaier, and various lobbying groups, including the Florida Chamber.

Edie Ousley, the Florida Chamber’s vice president of public affairs, said it’s still early in the session. “We believe lawmakers want to ensure their constituents are protected from this, and we look forward to working together toward sound solutions,” she said in an email statement.

Altmaier and a Citizens spokeswoman told the House subcommittee that by not removing the attorneys fee incentive, Grant’s bill didn’t go far enough to rein in abuses by contractors and attorneys.

But water damage contractors who spoke at the hearing said they would lose work under Grant’s proposal to limit assignments only to general contractors. That proposal was part of the rejected revisions.

Nearly all of the subcommittee members, as well as speakers on both sides of the issue, praised Grant’s efforts in trying to forge a compromise and urged him to keep working.

Grant argued that lawmakers shouldn’t paint either side as the villain and instead should focus on lowering costs by encouraging settlement of claims before they have to go to court.

Recalling State Farm insurance representative Mark Delegal’s statement earlier in the hearing that “losses drive premiums [higher]” Grant said, “He’s absolutely right. But it would also be incumbent to understand that denials or reductions drive profits.”

Neither side is going to be happy with whatever results in the effort, Grant said. “If you tackle something significant and you haven’t made everyone a little uncomfortable, you haven’t done anything,” he said.

The bill has a long way to go before reaching a vote by the full Legislature and, if passed, the governor’s desk. It next faces a hearing in the House Commerce Committee.