House AOB package clears committee despite some qualms


House assignment of benefits (AOB) legislation cleared its sole committee Tuesday and appears headed to the floor, despite reservations about its limits on attorney fees and lack of language directly sanctioning insurance fraud.

Judiciary Committee members also expressed skepticism about insurers pressing policyholders to accept their preferred vendors before approving the bill (PCB JDC 18-01) on a 13-5 vote.

“Once again, we end up in this room dealing with the actions of bad actors,” Rep. Erin Grall observed.

She complained that it’s not clear the legislation would allow policyholders and legitimate repair contractors to secure legal representation against low-ball claims offers by insurance companies — or would even solve the problems it seeks to address.

“The bad actors will be able to do the math in order to get paid at the end of the day. The insurance companies will be able to figure out the math to either pay claims or not pay claims,” said Grall, a Vero Beach Republican.

Echoing another point that Grall made, Democrat John Cortes objected to insurers pressuring policyholders to accept vendors of their choosing.

“It kind of irks me that I have to sign a piece of paper and then the insurance company undercuts me, then I have to sue my insurance company to get the money that’s owed,” he said. “How do I win?”

The legislation contains essentially the same language as a measure that cleared the House during the spring Legislative Session. A less industry-friendly version stalled in the Senate, but that panel is debating reforms including mandatory arbitration in AOB disputes.

The insurance industry and its business allies blame a spike in AOB litigation on fraud and other abuses. Attorneys and contractors blame bad faith largely by a limited number of insurers that make inadequate claims offers or delay responding altogether.

The House bill would attack the problem by imposing deadlines on contractors to file notices and invoices, and on insurers to respond. It would encourage parties to settle disputes out of court by limiting either’s ability to recover attorney fees, depending on how far out of whack settlement offers are from final judgments.

Panama City Republican Jay Trumbull is carrying the legislation this year, taking over from Tampa Republican Jamie Grant, who ushered last year’s version through lengthy hearings before the Insurance & Banking Subcommittee and full Commerce Committee.

Trumbull was unaware of any additional committee hearings ahead of the 2018 session, but said members are fully aware of the arguments, he said. “There are some members who still have some concerns,” he conceded following the vote.

The main idea, he added, is to subject contractors to both the obligations and benefits provided by insurance policies they seek to enforce, rather than just the right to sue and recover attorney fees.

“I do believe that this bill is going to curb the issues of fraud. You’re going to have the bad actors who aren’t going to go through some of the hoops that we have created,” he said. But “we want to make sure the assignee (contractor) stands in not one but both shoes of the insured.”

“There is a reason why we went from 1,400 claims in 2014 to 28,000 claims in 2016 — and it’s not because it’s been raining harder,” committee Vice Chair Shawn Harrison said during debate.

“Everyone knows there’s a problem.”

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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