Senate Prepares for Controversial 'AOB' Insurance Fight
But with the issue pitting groups such as insurance companies and plaintiffs attorneys — and with the key focus likely to be attorney fees — expect a noisy fight over the next few months.
January 23, 2019 at 12:44 PM
3 minute read
A Senate committee plunged again into a debate about the controversial insurance practice known as “assignment of benefits,” with the chairman vowing to resolve the issue after unsuccessful attempts in past years.
“We've got to own this issue once and for all,” Senate Banking and Insurance Chairman Doug Broxson, R-Gulf Breeze, said.
But with the issue pitting groups such as insurance companies and plaintiffs attorneys — and with the key focus likely to be attorney fees — expect a noisy fight over the next few months.
Assignment of benefits is a decades-old practice that involves insurance customers signing over claims to contractors, who do work and ultimately pursue payment from insurers. The issue has become controversial in recent years amid allegations by insurers that the system has become rife with fraud and litigation, driving up consumers' insurance premiums.
Much of the focus has been on water-damage claims in South Florida for such things as busted pipes but also has extended to windshield-damage claims and now is spilling into the recovery in the Panhandle from Hurricane Michael.
State Chief Financial Officer Jimmy Patronis, who is from hard-hit Panama City, went before the committee Tuesday and implored lawmakers to address the so-called AOB issue. Patronis, whose office helps oversee the insurance industry, said he hasn't limited his position to addressing attorney fees.
“I've had a call to action with the [insurance] carriers and I said, 'Look, just do your job. As long as you are doing your job and you are fighting to make sure that our consumers are taken care of, then it makes it a lot easier to find where the bad actors exist,' ” Patronis said, while discussing Hurricane Michael claims.
Broxson's committee hosted speakers, including Patronis, state Insurance Commissioner David Altmaier and Citizens Property Insurance Corp. President and CEO Barry Gilway. Other speakers were former Supreme Court Justice Kenneth Bell, who represents an insurance-industry group called the Personal Insurance Federation of Florida, and Orlando attorney Lee Jacobson, who represents the Florida Justice Association trial attorneys group.
Altmaier and Citizens officials have pointed to a spike in litigation about assignment of benefits for increased property-insurance rates. The Citizens Property Insurance Board last month, for example, approved a plan that would raise residential insurance rates by an average of 8.2 percent starting in September for customers of the state-backed insurer.
With the annual legislative session beginning March 5, the insurance industry and its supporters are focused on trying to limit attorney fees in AOB disputes. Broxson has filed a bill (SB 122) focused on fees, and Altmaier also backs taking action on the issue, telling the committee that litigation has “exploded” in recent years.
Bell acknowledged a “habitual battle between insurance companies and attorneys,” but he said the AOB debate involves a “significant problem that's being caused by attorneys.”
But opponents of attorney-fee changes say assignment of benefits and the possibility of litigation help make sure insurers properly take care of claims.
“The assignment of benefits is the most mischaracterized, consumer-friendly tool that I've heard,” Jacobson said. “It's a contract between two willing parties. It's between the policyholder and his, her or its chosen vendor. They aren't forced to sign this.”
Jim Saunders reports for the News Service of Florida.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllMediating Community Association Disputes: Tips for Attorneys, and Their Clients
6 minute readCole, Scott & Kissane Keeps Transitioning More Resources Into Construction As Tort Reform Changes Loom
4 minute readCheap Lumber, Stronger Hurricanes—Perfect Storm for the Strained Florida Insurance Market
4 minute readTrending Stories
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250