Florida Chief Financial Officer (CFO) Jimmy Patronis announced five legislative proposals targeting fraud that he will pursue during the upcoming special session on insurance reform, adding to the efforts that he has put forward in assembling a pair of anti-fraud teams late last year.
A primary proposal for the upcoming session is to establish three anti-fraud Homeowner Squads. The Department of Financial Services (DFS) will request 23 new positions, including fifteen detectives, three supervisors to work cases, three attorneys, and one administrator, to prosecute cases.
The teams would cover Jacksonville, Fort Lauderdale, and Miami.
“As area policyholders know, Florida’s insurance market is in trouble. We are seeing more private carriers exit the market, and we’re seeing Citizens Insurance policies grow. Governor DeSantis has rightly called a special session to reform insurance, and lawmakers will have an opportunity to curb frivolous litigation and fight fraud,” said Patronis during the press conference announcement of his proposals. “Florida communities are under attack by fraudsters who are willing to try anything to game the system. They are stealing from us all! To win this war, we need the troops, the weapons, and a full commitment to the mission. So in this special session, I will put forward five initiatives aimed at cracking down on the kind of fraud that increases all of our rates.”
The second initiative would create a $3 million anti-fraud and public education campaign, while the third initiative proposes to amend Florida’s False Claims Act to allow whistleblowers to recover damages in Qui-Tam cases.
Qui-Tam cases allow the general public to file whistleblower complaints about fraud cases, without necessarily being the victim, or as part of the fraud taking place.
The Qui-Tam proposal conjoins with the CFO’s fourth proposal that would incentivize and provide monetary compensation for usable information regarding fraud cases, in the same vein that residents can be rewarded by Crime Stoppers after giving information that leads to an arrest.
“We need teams that live-and-breathe property and casualty fraud, and we need to give state attorneys good cases so that we can accelerate the pace at which these fraudsters are sent to jail, said Patronis. “By placing these new teams in areas with lots of fraud, we’ll not only hold criminals accountable, but we’ll provide even more deterrence and potential savings to homeowners through lower premiums.”
The final proposal would make changes to Assignment of Benefits (AOB) law, including banning the bundling of AOBs.
An AOB is an agreement that allows for the transfer of insurance claims rights or benefits of the policy to a third party. An AOB gives the third-party authority to file a claim, make repair decisions, and collect insurance payments without the involvement of the homeowner.
AOBs have been used with life and health insurance policies for many years. However, AOBs are now commonly used in homeowners’ insurance claims by restoration companies and contractors.