Florida Senator Gary Farmer filed an Assignment of Benefits reform bill in the Florida Senate. As discussed in Unauthorized Practice of Public Adjusting Case Petitioned to Texas Supreme Court, and Two different approaches to the Assignment of Benefits Issue, I expect that some form of assignment of benefit reform will be passed in Florida this upcoming session.

Here is the proposed language in the bill (click on image for full bill):

I am certain that the insurance restoration industry and the small cadre of attorneys representing contractors filing suits without much of any insurance adjustment will fight any reform. But, from the policyholders’ perspective, it is needed. The insurance industry should embrace most of this proposed legislation.

I am not certain that I agree that insurance companies should not be able to claim as actuarial expenses when paying costs of attorneys’ fees paid when losing or settling cases. Unlike other industries, insurance companies are litigation machines. From an actuarial standpoint, litigation and even extra-contractual damages have historically been an actuarial expense. I can understand that some would argue that customers should not have to indirectly pay the costs of attorneys’ fees in premiums when insurers lose cases, but win or lose, insurers have a legal right to deny claims and have their day in court. Win, lose, or draw, policyholders and insurers have a right to legal process and both should be able to expense costs of litigation. Insurance companies that wrongly fight their customers will lose those customers by creating ill will and having higher premiums.

Thought For The Day

“If you want good laws, burn those you have and make new ones.”
― Voltaire