Insurance company lawyers and lobbyists are a crafty crew. Kelly Kubiak got word from me after I learned late Tuesday afternoon that Florida legislators needed to hear from her early Wednesday morning regarding a proposed law that would let delaying, denying and wrongful acting insurance companies obtain a “get out of free jail card” so long as a claim was paid 20-60 days after appraisal. Kelly changed her schedule and travelled up to Tallahassee to do work For the PolicyholderTM.
State Farm is using its own policyholders’ premiums to pay for huge lobbying costs against its own customers. A chief lobbyist against consumers and for property insurers not being held accountable for their wrongful conduct is Holland & Knight’s Mark Delegal.
Delegal is a lawyer simply doing his job and plying his trade as a superb lobbyist. But, in this case, he’s pushing a law that would effectively let wrongful and unethically acting insurance companies that break the law through delay, denial, and untimely payment of insurance claims do so without accountability. Under his proposed law, so long as the matter drags out through an appraisal and then the insurer pays the appraisal award within the policy grace period—Usually 20-60 days—the wrongful insurer would now be exempt from laws protecting insurance consumers since 1982.1
This proposed bill represents bad public policy. It is very harmful to policyholders as well as to insurers that act in good faith and timely pay their claims. Guilty and cheating insurers are treated just the same as law abiding insurers. Policyholders with insurers that delay, underpay and fail to act in good faith are left with no recourse despite having to endure claims not being fully and timely paid.
I spoke with insurance company attorney and insurance claims expert John Pappas about the proposed law. He reminded me that during the Windstorm Insurance Conference panel which he participated, John opined that if an insurer learned of reasons to pay more on a claim at any time, the insurer should pay more promptly as a matter of good faith. Honest and ethical claims handling would demand it.
While I can certainly understand the different viewpoints and the difficulty of finding the proper laws to reform issues relating to the Assignment of Benefit contracts currently pending before the legislature, this proposed law is simply bad for policyholders and honest acting insurance companies. Laws and ethical standards without any accountability are worthless. Indeed, when we take away accountability, some otherwise good faith acting insurers will be even more prone to act wrongfully and disregard their ethical obligations.
Why should we make laws that support bad players and wrongful actors? Policyholders with delayed and wrongfully denied Hurricane Irma and Michael claims are already upset and angry. Wait until they hear what their own insurers are trying to get legislators to gut their legal rights.
Could policyholders show up and protest their treatment in Tallahassee as I noted policyholders did in Austin after Hurricane Ike?
Here is the full video where Kelly Kubiak testified.
Thoughts For The Day
This is the fundamental problem with the ruling class in Washington, D.C. – the party bosses, the K Street crowd, the lobbyists who control all these politicians. They will do anything to maintain their power. They will do anything. They will say anything.
I have had lobbyists, and I have had some very good ones. They could do anything.
1 Fla. Stat. §626.9541.