Swiss Re Insurance-Linked Fund Management

Xactanalysis Insights and PCS

Florida CFO Patronis wants to ban Assignment of Benefits (AOB)

Share

Florida Chief Financial Officer (CFO) Jimmy Patronis has floated a plan to significantly tighten up and introduce new rules to combat insurance fraud in the wake of major hurricane Ian, with an all-out ban of Assignment of Benefits (AOB) one of the possible legislative measures.

welcome-to-florida-miami-night-signPatronis held a press conference in Cape Coral yesterday to highlight fraud prevention efforts in the wake of hurricane Ian and discussed legislative efforts that can be expected.

The CFO is set to propose legislation to crack down on bad Public Adjusters by curbing their ability to take advantage of Floridians under financial duress, eliminating Assignment of Benefits (AOB) abuse through an all-out ban on the use of AOBs, creating a statewide prosecutor focused solely on property insurance fraud, and requesting a $3 million anti-fraud public education campaign.

Florida’s CFO Jimmy Patronis commented, “Today, I stood with my fraud fighting teams in Cape Coral to highlight my efforts to fight back against post-storm fraud and announce my pursuit of meaningful fraud reform legislation next session.

“In the wake of Hurricane Ian, we need to build on the efforts from the recent Special Session and continue to reduce frivolous litigation, stop predatory public adjustors, and tackle AOB abuse once and for all. Bad actors use tools like AOBs to take advantage of Florida consumers in their most vulnerable moments, preying on our citizens for too long.

“At the same time, there are bad public adjusters swarming impacted areas, soliciting, and trying to make a quick buck. They are promising to help while betraying the trust of people who have lost everything. This upcoming legislative session, we are going to work to make it less profitable for unscrupulous public adjusters following a disaster.”

One idea is to eliminate the incentive for public adjusters to follow fraudulent practices or to put policyholders under duress following a disaster, through the creation of a schedule of how Floridians’ payments will be laid out, under Florida Statutes.

Patronis explained, “We have bad Public Adjusters swarming impacted areas, soliciting, and trying to make a quick buck. Not only do individuals need more time to get out of a Public Adjuster contract during a state of emergency, we need to reduce the percentage a Public Adjuster is entitled to immediately following a storm, ensuring their motives are aligned with helping Floridians get back on their feet.

“Bad actors use tools like AOBs to take advantage of Florida consumers in their most vulnerable moments. CFO Patronis said, “During states of emergency, the number of bad actors looking to take advantage of Floridians increases and we’ve seen these same individuals preying on our citizens for too long, so with the help of the Legislature, I want to ban the use of AOBs.”

After last year’s special session of the legislature, it’s uncertain how much of an effect the reforms enacted will have.

Many voices across insurance and reinsurance markets are calling for a more robust approach, and many of the measures proposed by Florida’s CFO will likely be well-received.

Patronis’ proposed measures lay an important line in the sand, that lawmakers are aware much more needs to be done and that it is critical that fraud is stopped, to enable the insurance and reinsurance market to function more normally in Florida.

After hurricane Ian, the state’s policyholders could face much higher rates, while reinsurance pricing for Floridian domestic carriers will likely soar at renewals.

Stemming fraud, by removing the incentives and eliminating AOB could ultimately have a positive effect on the reinsurance market’s risk appetite for Florida, which should help it to become more functional over-time and could even return confidence in Florida’s property insurance sector.

Of course, measures still have to get through House and Senate, with no guarantee of the broad support needed to pass them.

But these proposals are already more bullish than those seen a year ago, which could be a positive sign for Florida’s insurance future.

Read all of our news and analysis on the Florida insurance and reinsurance market.

Register today for ILS NYC 2023, our next insurance-linked securities (ILS) market conference. Held in New York City, February 10th, 2023.

Artemis London 2022 - Insurance-linked securities conference in London

Get a ticket soon to ensure you can attend. Secure your place at the event here!

Print Friendly, PDF & Email

Artemis Newsletters and Email Alerts

Receive a regular weekly email newsletter update containing all the top news stories, deals and event information

  • This field is for validation purposes and should be left unchanged.

Receive alert notifications by email for every article from Artemis as it gets published.