- The Florida Senate approved a bill aimed at enhancing consumer protection and increasing insurer accountability in the state, addressing insurance coverage, rates, and claims handling.
- The bill provides a balance between insurers and policyholders, ensuring access to affordable and reliable property insurance.
- It also increases regulatory oversight of insurers, raises maximum administrative fines for violations, and requires insurers to respond promptly to the Department of Financial Services Division of Consumer Services.
Amid an alarming rise of complaints that some insurers are dragging their feet and holding up recovery payments in the wake of Hurricane Ian, the Florida Senate on Wednesday approved Senate Bill 7052, aiming to enhance consumer protection and increase insurer accountability in the state. The legislation contains provisions related to insurance coverage, rates, insurer claims handling, and regulatory oversight practices.
The bill seeks to provide a balance between insurers and policyholders, insurers are held accountable if they fail to meet their contractual obligations. It also aims to maintain consumer access to affordable and reliable property insurance by strengthening the property insurance market.
The bill requires property insurance and motor vehicle rate filings to include the combined effect of recent legislative reforms. It also mandates property insurance mitigation discounts be updated at least every five years and requires insurers to provide information on hurricane mitigation discounts available to policyholders on their websites.
Florida Chief Financial Officer Jimmy Patronis expressed support for the bill, stating that it will help empower storm victims, allowing them to recover more quickly.
“Florida has done a lot to mitigate the impacts of a hardening insurance market in our state while working to keep policyholders at the forefront,” Patronis said in a prepared release. “For too long, unscrupulous insurance companies, public adjusters, and attorneys have been allowed to drive the decline in the state’s insurance system. Thankfully, last year we passed vital reforms to alleviate the fraud, waste, and abuse that drives up rates for every Floridian. I have no doubt that this legislation will help empower storm victims so they can get back on their feet quicker and further down the road to recovery.”
As for insurer claims handling, the legislation calls for liability insurers to follow proper claims handling practices, residential property insurers to create and use claims-handling manuals compliant with the Insurance Code, and the Office of Insurance Regulation (OIR) to ensure proper implementation of these manuals. The bill also strengthens the Unfair Insurance Trade Practices Act by prohibiting altering or amending adjuster’s reports without detailed explanations for any change that reduces the estimated loss.
Lawmakers noted that previous reforms targeted trial lawyers that were driving up insurance costs and in many cases, forcing insurance companies out of business. But while other recent legislative changes helped bolster insurers, legislators sought to take additional steps to hold insurers accountable, too.
“The goal of all of this activity has not been to benefit the insurance industry but rather to benefit policyholders,” said the bill sponsor, Senator Travis Hutson. “We have no desire to go from a system that enriches trial lawyers, to a system that incentivizes insurance companies to use the law to avoid paying claims that should be paid.”
The legislation increases regulatory oversight of insurers by requiring the OIR to forward relevant records and information on potential criminal law violations to the Department of Financial Services (DFS), law enforcement, or prosecutorial agencies. It also increases maximum administrative fines for insurers by 250 percent generally and 500 percent for violations related to a state of emergency, such as a hurricane. Additionally, the bill requires insurers to respond promptly to the DFS Division of Consumer Services and increases staffing for both the DFS Division of Consumer Services and the OIR.