Florida passes insurance reform to curtail litigation, boost reinsurance
Florida’s lawmakers passed sweeping legislation designed to curb runaway litigation and provide a boost to the state’s property reinsurance backstops, wrapping up works within three days of a special session called for the purpose.
The bill cleared both houses and staved off a series of proposed amendments all with majorities at or approaching a three to one ratio.
The bill was sent late Wednesday evening to Florida governor Ron DeSantis for signing.
“Governor DeSantis and Florida lawmakers continue to show tremendous leadership in addressing our state’s property insurance market crisis,” the US industry lobby group APCIA said in a statement. “Rampant legal system abuse has caused insurance costs to skyrocket and burdened Florida families, and we applaud lawmakers for addressing this issue head on to help stabilize the marketplace.”
The bill knocks out Florida’s assignment of benefits (AOB) provisions and statutes on one-way attorney fees frequently blamed for the high litigation rates in the state.
Designed to assist policyholders in the pursuit of wrongfully-denied claims and protect them against legal fees in the process, they have allowed contractors with lawyer support to launch a relentless barrage of court litigation, detractors say.
The bill also creates a new optional reinsurance programme FORA, funded with up to $1 billion in taxpayer money, allowing insurers to buy reinsurance coverage for the two most damaging hurricanes of the season, all at what policymakers believe will be "reasonable" rates.
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