How can you tell when an insurance company lobbyist is not telling the truth? Everybody should know the answer. But a recent article in the Insurance Journal, Florida’s SB 2A Ended One-Way Legal Fees. Now Some Insurers Say it’s Retroactive, shows that laws written and supported by the insurance industry are always suspect. 

Florida legislators, relying upon insurance industry lobbyists, told fellow legislators that the one-way attorney fees law would not apply retroactively and would not affect Hurricane Ian policyholders whose claims were being denied. The law passed and guess what? The insurance companies are now saying the new laws are retroactive to escape accountability for underpaying, delaying, and denying Hurricane Ian policyholders their benefits. 

The article noted:

Case law speaks to the question, Lozier and Merlin said. In 2010, the Florida Supreme Court in Menendez vs. Progressive Express Insurance found that a Florida statute requiring notification of intent to sue could not be applied retroactively to policies issued before the amendment was enacted.

The court noted that even if the Legislature intended for the pre-suit notice provision to be applied retroactively, the court cannot accept that assertion ‘if the statute impairs a vested right, creates a new obligation, or imposes a new penalty.’ It was considered a substantive change, not merely procedural, the justices wrote.

With SB 2A’s attorney fee provision, there was no clear legislative intent that the law should reach back in time, said Lozier, with the Clausen Choquette law firm. Interpreting the law otherwise would be a substantive change, would attach new and unexpected penalties, and would run afoul of the U.S. Constitution’s ex post facto principle, she argued.

The bottom-line lesson is one for our elected leaders. When insurance company lobbyists say something, you cannot rely upon it. The statistics they cited to support the new laws were made up. The impact of the laws was not truthfully described. 

Thoughts For The Afternoon

Trust is hard to come by. That’s why my circle is small and tight. I’m kind of funny about making new friends.