Assignments of Benefits (AOBs) have been the subject of several recent court opinions. I discussed some of those decisions in my recent blog post, Assignment of Benefits. I did not, however, specifically discuss a recent opinion by Florida’s First District Court of Appeals: Security First Insurance Company v. Florida Office of Insurance Regulation.1 In this case, Security First sought to amend its homeowner's policies to restrict the ability of policyholders to assign post-loss rights without the company's consent. The Office of Insurance Regulation (OIR) rejected the request; Security First appealed OIR's decision.
Given the jurisprudence surrounding AOBs in the state, this was not a difficult case for the appellate court to decide:
On this point we find an unbroken string of Florida cases over the past century holding that policyholders have the right to assign such claims without insurer consent. See, e.g., W. Fla. Grocery Co. v. Teutonia Fire Ins. Co., 77 So. 209, 210–11 (Fla.1917) (“[I]t is a well-settled rule that the provision in a policy relative to the consent of the insurer to the transfer of an interest therein does not apply to an assignment after loss. It is true that the assignment in this case contains the words ‘subject to the consent of the [insurance company]’ but, as such consent was not necessary to its validity, the condition was superfluous.”); see also Lexington Ins. Co. v. Simkins Indus., Inc., 704 So.2d 1384, 1386 n. 3 (Fla.1998) (insurer conceded “that an insured may assign insurance proceeds to a third party after a loss, even without the consent of the insurer.”); One Call Prop. Servs. Inc. v. Sec. First Ins. Co., 40 Fla. L. Weekly D1196a (Fla. 4th DCA May 29, 2015) (“Even when an insurance policy contains a provision barring assignment of the policy, an insured may assign a post-loss claim.”) (collecting cases); Citizens Prop. Ins. Corp. v. Ifergane, 114 So.3d 190 (Fla. 3d DCA 2012) (“Post loss insurance claims are freely assignable without the consent of the insurer.”); Better Constr., Inc. v. Nat'l Union Fire Ins., 651 So.2d 141, 142 (Fla. 3d DCA 1995) (“[A] provision against assignment of an insurance policy does not bar an insured's assignment of an after-loss claim.”). Under our standard of review, OIR did not interpret the law on this issue in error; it got it right. See Fla. Hosp. v. Agency for Health Care Admin., 823 So.2d 844, 847 (Fla. 1st DCA 2002) (“The standard of review of an agency decision based upon an issue of law is whether the agency erroneously interpreted the law and, if so, whether a correct interpretation compels a particular action.”). Affirmance of its order is required.
Unfortunately, although various appellate court's around Florida (as well as OIR) have gotten it right, the following line in this decision should concern us all: "We agree with these sentiments, and reiterate that the policy arguments and evidentiary basis for them put forth by Security First are more properly addressed to the Legislature." As readers of the blog, you know my thoughts on whether policyholders can trust the Florida Legislature to analyze and address this issue fairly.