Michael Moline
Details of insurance claims gleaned for the ongoing battle against assignment of benefits (AOB) abuse are “trade secrets” that should be shielded from public view, a new lawsuit says.
Universal Property & Casualty Insurance Co. recently filed in Leon County Circuit Civil court against the Office of Insurance Regulation (OIR), seeking to block it from complying with a public records request. Thomas Crabb of The Radey Law Firm in Tallahassee represents Universal in the action.
In the complaint, the insurer identified the source of that request as Gray Proctor of Orlando, who sought details of individual homeowner claims and the procedures for processing those claims. His website describes him chiefly as an appellate attorney who also offers trial support services.
Similar suits are filed every year, generally after an interested party has filed a records request seeking to use “open source intelligence,” or public records, to gain a business advantage on its competitors.
But the “Florida Legislature has expressly made trade secrets confidential and exempt from disclosure under the Public Records Act,” the complaint asserts.
State law describes a trade secret as business information that is secret; of value; of use in business; and of advantage to the business or to competitors who might learn of the information. The owner of the secrets must have taken steps to preserve their confidentiality.
The complaint identifies Universal as Florida’s largest homeowners insurer, with more than 600,000 policies in force bringing premiums in excess of $900 million per year. That’s 180,000 policies more than the second largest, Citizens Property Insurance Corp.
It cites industry-wide “data calls” in 2015 and 2017, as the insurance office attempted to come to grips with the extent of AOB abuse. The office, individual insurers and business allies have long complained that unscrupulous contractors and attorneys take advantage of AOB agreements to milk insurers.
OIR demanded “granular” information about individual claims filed against the company, including claims numbers, locations of loss down to the zip code; policy limits; “house characteristics” including size, ownership status, year constructed, and age of the roof; and details of any AOBs, including the identities of any contractors and attorneys involved.
“Because of (Universal’s) position as the largest insurer of residential property in Florida, its data is among the most, or the most, comprehensive and robust compilation provided to OIR,” the complaint says.
The data “provides claims-level insight” into Universal’s internal procedures, “including but not limited to how it compensates claims counsel, how it handles water extraction/mitigation costs, how it negotiates claims in litigation, and how it manages its loss adjustment expenses.”
Moreover, the data would allow a competitor to identify AOB “hot spots” that could guide underwriting decisions. “Another carrier could use (Universal’s) data in conjunction with, or in lieu of, its own to evaluate where to write or not write policies.”
Additionally, third parties, including water-mitigation companies, could benefit from the data during negotiations with Universal, the complaint says: “Entering the requested injunction will serve the public interest.”
“… The Florida Legislature has found that the harm in disclosing trade secrets significantly outweighs any public benefit from disclosure and that the public’s ability to scrutinize and monitor agency action is not hampered by nondisclosure of trade secrets.”
The lawsuit seeks a judicial declaration that the info it provided to the insurance office is secret and exempt from disclosure, and an injunction barring the office from releasing the information.
