Senate begins search for consensus on AOB reform


Assignment of benefits reform was among the first topics tackled by the Senate Banking & Insurance Committee Tuesday as it began preparing for the 2018 Legislative Session.

A panel of interested parties, invited to debate points of contention, appeared to agree that so-called AOB agreements ought to be in writing, and that a deadline should be imposed for delivering them to insurance carriers.

Working out the details could be tricky, however, not least over which parties could sign AOB contracts. The policyholder, certainly. But what if a divorcing couple holds the policy jointly? Should mortgage-holders have a say?

“That’s why we’re doing this rather methodically — putting the issues out, giving everybody their time,” committee chairwoman Anitere Flores said following the hearing. “There is more that the sides agree on than they disagree on. So let’s try to get something passing.”

The House Insurance & Banking Committee used the same approach during the 2017 Legislative Session, and produced a bill that cleared the floor. The Senate’s AOB legislation never came before the full chamber.

Flores said she asked committee staff to review legislation proposed during the past three years to narrow the major bones of contention.

“And then maybe at some point … we’ll have a nice menu of issues the committee agrees on, and then we can have a bill,” she said. “It’s obviously going to take us several weeks. But we’d rather do it right and take our time than just rush and hear Bill X or Bill Y.”

Regarding sign-offs on AOB, Orlando trial attorney Lee Jacobson complained some carriers already are submitting agreements to mortgage lenders — without authority under state law, he asserted.

Angel Conlin, head of legal affairs and compliance for American Strategic Insurance, said that assertion is being tested in a case before the 2nd District Court of Appeal. She argued the practice is justified.

“The mortgage company is my insured,” Conlin said. “If the divorced couple, if they’re both listed on my policy, they both have rights under my contract and I have duties to both. If I were to pay only one person, because only one of my insureds signed an assignment of benefits, I have failed in my obligations to everyone that I had that contract with.”

The Office of Insurance Regulation has projected policyholders can expect rate increases of around 10 percent in each of the next five years, largely because of inflated costs due to AOB.

Michael Moline

Michael Moline is a former assistant managing editor of The National Law Journal and managing editor of the San Francisco Daily Journal. Previously, he reported on politics and the courts in Tallahassee for United Press International. He is a graduate of Florida State University, where he served as editor of the Florida Flambeau. His family’s roots in Jackson County date back many generations.


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