House moves on less strict insurer ‘accountability’ bill

TALLAHASSEE, FLA. 3/7/23-Democrats in the back row of the House Chamber remain seated while their Republican colleagues give Gov. Ron DeSantis one of many standing ovations as he delivers the State of the State address during the opening day of the 2023 Florida Legislative Session, Tuesday at the Capitol in Tallahassee. COLIN HACKLEY PHOTO

A House panel approved a bill imposing new requirements on property insurers and new reporting requirements for regulators, but the measure doesn’t contain some of the stricter measures surrounding proper claims handling and oversight included in a similar bill moving in the Senate.

“The House bill has left out any real teeth that can be used to hold insurers accountable,” said Stephen Cain, President-elect of the Florida Justice Association, a trade group for trial lawyers.

The House Commerce Committee passed the bill (PCB COM 23-04) unanimously. But Rep. Rita Harris, an Orlando Democrat, expressed a preference for the more stringent Senate version (SB 7052), which passed through the Senate Banking and Insurance Committee last week.

The House version doesn’t include provisions that would prevent the Office of Insurance Regulation (OIR) from waiving reviews of filings made by insurance companies for changes in the coverage they provide if the insurers have violated the state insurance code within the last three years.

The Senate measure would also require carriers to submit their claims handling manuals to OIR and prohibit insurers from canceling or not renewing a homeowner during a declared state of emergency even if the damage wasn’t caused by a hurricane. Neither provision is included in the House version.

But the piece of the Senate bill that property insurance groups expressed the most concern with — a provision that would set parameters for the handling of claims, including requirements for considering settlement claims and to keep all records of communications regarding a claim for at least five years — isn’t included in the House version either.

The House bill, though, does increase fines for insurers that mishandle claims, allow more time for military members serving overseas to file claims and requires OIR to detail its enforcement actions against insurers on a quarterly basis. It also prohibits financially troubled insurers from paying bonuses to executives.

Florida lawmakers have passed a series of bills over the last year aimed at shoring up the property insurance market, which has seen seven companies fail since the start of 2022. The new laws included up to $3 billion in reinsurance backed by taxpayers and removed one-way attorneys fees and the use of assignment of benefits.

Insurers said skyrocketing reinsurance and out-of-control lawsuits spurred by state laws that give incentives to trial lawyers for pursuing legal challenges on frivolous grounds were the main source of the losses seen by the industry in recent years.

But trial lawyers and opponents of those bills said they went too far, and give insurers the upper hand in denying claims for homeowners. The aim of the bills was to reduce rates for homeowners, who have seen massive increases in recent years, but a series of insurers have filed for large statewide average rate hikes with OIR, including some as much as 60%.

“You’ve given the insurance industry their Christmas list, now stand up for property owners,” Cain said.