Tuesday, 21 January 2020 14:51

Florida Legislative Preview 2020: Industry Calls on Lawmakers to Reform Lawsuit Abuse

Written by Amy O'Connor, Insurance Journal


The explosion of AOB claims over the last several years and other market forces, including excessive litigation and losses from Hurricane’s Irma and Michael, have created a hazardous financial environment for many insurers, according to Demotech, which rates 46 Florida-based carriers.


As a result, Demotech said last week that many of Florida's domestic insurance carriers face rating downgrades in the coming days and weeks.


Industry advocates and consumer groups are urging the Florida Legislature to pass legislation this year that would help the state’s private market, including reforms to the excessive litigation.


“Market factors such as Florida’s crumbling legal environment and lawsuit abuse have had significant consequences in the insurance marketplace and made it challenging for companies to maintain A ratings,” said Logan McFaddin, Vice president of state government relations for the American Property Casualty Insurance Association (APCIA).


“The Florida Legislature needs to implement meaningful reforms during the 2020 Legislative Session that reduce lawsuit abuse and restore fairness to Florida’s legal system.


APCIA looks forward to working with lawmakers during the upcoming session to address these critical issues.”


Paul Handerhan, president of the Federal Association for Insurance Reform (FAIR), said two bills have been introduced, both sponsored by Senator Jeff Brandes, that would target first party litigation abuses.


Senate Bill 914 would provide that for certain attorney fees awarded for claims arising under property insurance policies, the maximum fee a court may award is a lodestar fee and prohibit the court from considering contingency risk or using a contingency risk multiplier.


The other bill, SB 1634, would revise requirements for the civil remedy notice provided to insurers and the Department of Financial Services; delete a requirement for certain persons acting on behalf of an insurer to provide certain notice before scheduling a meeting or onsite inspection for certain purposes; and require named insureds to provide insurers with a specified notice as a condition precedent to filing suit under a property insurance policy.