In October of last year I wrote a blog on the Florida Legislature’s efforts to alter the laws regarding Assignment of Benefits.Since that time, there have been some changes to the bills (House Bill 1097 and Senate Bill 596) as originally drafted. In particular, Senate Bill 596 underwent some significant changes just this week. The new bill can be viewed in its entirety here.
Here is a summary of the new version of the Senate Bill:
This bill requires that ALL of the following conditions must be met for an assignment agreement to be valid:
-The agreement must authorize a person or entity to be named as a payee or copayee for the benefit of payment as provided in the policy for services rendered and materials provided to mitigate or repair covered damage only.
-The agreement must be provided to the insured’s property insurer within 3 business days after execution.
-The agreement must contain an estimate for proposed services and materials to be provided.
-The agreement must allow the insured to cancel the agreement within 3 business days after the agreement is executed or submitted to the insurer, whichever is later. The assignee is entitled to be reimbursed for work already performed before cancellation of the agreement.
The bill prohibits AOBS if ANY of the conditions are met:
-The agreement imposes an agreement cancellation fee, a mortgage processing fee, or adds an amount for overhead and profit.
-The final invoice issued under the agreement exceeds the estimated cost for work performed and the increase was not authorized by the insurer.
-The agreement prevents or inhibits an insurer from communicating with the insured at any time.
-The agreement purports to transfer or create any authority to adjust, negotiate, or settle any portion of a claim to a person not authorized to adjust, negotiate, or settle a claim under part VI of ch. 626, F.S.
The agreement must contain the following notice, in 14-point type: WARNING: YOU ARE AGREEING TO GIVE UP CERTAIN RIGHTS YOU HAVE UNDER YOUR INSURANCE POLICY TO A THIRD PARTY. PLEASE READ AND UNDERSTAND THIS DOCUMENT BEFORE SIGNING IT. YOU HAVE THE RIGHT TO CANCEL THIS AGREEMENT WITHOUT PENALTY WITHIN 3 BUSINESS DAYS AFTER THE DATE THIS AGREEMENT IS EXECUTED OR WITHIN 3 BUSINESS DAYS AFTER YOUR PROPERTY INSURANCE COMPANY HAS RECEIVED A COPY OF THIS AGREEMENT, WHICHEVER IS LATER. IF WORK IS BEING PERFORMED AS A RESULT OF DAMAGES CAUSED BY AN EVENT FOR WHICH THE GOVERNOR HAS DECLARED A STATE OF EMERGENCY AND IS WITHIN 1 YEAR AFTER SUCH DECLARATION, YOU HAVE 5 DAYS AFTER THE DATE OF EXECUTION TO CANCEL. THIS AGREEMENT DOES NOT CHANGE YOUR DUTIES UNDER YOUR PROPERTY INSURANCE POLICY, SUCH AS PROMPTLY NOTIFYING YOUR INSURANCE COMPANY OF A LOSS AND MITIGATING YOUR PROPERTY FROM FURTHER DAMAGE.
I will keep everyone informed of the status of this bill as it works its way through the process.