Episodes

  • Episode 49: Episode 49 – When Insurers Exit

    Episode 49: Episode 49 – When Insurers Exit
    Apr 22 2024

    A new report claims that Florida's property insurance market is full of “low quality insurers,” especially those Florida-based companies that write the bulk of the 7.5 million homeowners and condo insurance policies. It casts aspersions on Demotech, the rating agency that reviews their financial stability.


    Former Florida Deputy Insurance Commissioner Lisa Miller sat down with Demotech President Joe Petrelli to get the other side of the story that the report didn't. She also learned that it wasn't low capital and surplus that led to seven company insolvencies, as the report claims, but instead targeted technology-enabled claim instigation.


    Show Notes     (For full Show Notes, visit https://lisamillerassociates.com/episode-49-when-insurers-exit/)


    The report, When Insurers Exit: Climate Losses, Fragile Insurers, and Mortgage Markets was written by researchers at Columbia University, Harvard University, and the Federal Reserve Board and published online prior to being peer reviewed. The report’s abstract describes it as a study of how homeowners insurance markets respond to growing climate losses and how this impacts the home mortgage markets.


    “Using Florida as a case study, we show that traditional insurers are exiting high risk areas, and new lower quality insurers are entering and filling the gap. These new insurers service the riskiest areas, are less diversified, hold less capital, and 20 percent of them become insolvent. We trace their growth to a lax insurance regulatory environment. Yet, despite their low quality, these insurers secure high financial stability ratings, not from traditional rating agencies, but from emerging rating agencies.”


    The report specifically targets rating agency Demotech, which provides Financial Stability Ratings (FSR) for most of the 50 or so Florida-based property insurance companies, including six of the recent eight carriers to enter the market. The report claims Demotech’s ratings “are high enough to meet the minimum rating requirements” of Fannie Mae and Freddie Mac, which back many home mortgages, but that most of those insurance companies wouldn’t meet government requirements if rated by AM Best, suggesting the companies are financially weak.


    “I think the thing to keep in mind is the report is based on what are called counterfactual AM Best ratings of Demotech-rated companies,” said Joe Petrelli, President of Demotech, who described counterfactual methods as those based on “what-if” scenarios. “So I think that, in and of itself, should have alerted people that this was not based on anything real or actual. It was based on counterfactual information. It's like rewinding the world, changing a few crucial details, and then hitting play to see what happens. It's essentially a simulation,” said Petrelli.

    Petrelli is an actuary and a 55-year veteran of the insurance industry. He and wife Sharon co-founded Demotech in 1985 and today the agency reviews and rates 460 insurance companies across America. It is registered with the U.S. Securities and Exchange Commission as a nationally-recognized statistical rating organization for insurance companies. Florida regulators approached Demotech in 1995 to become the very first ratings company to review and rate independent, regional and specialty companies that filled the gap left by.... (For full Show Notes, visit https://lisamillerassociates.com/episode-49-when-insurers-exit/)
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    23 mins
  • Episode 48: Episode 48 – 2024 Legislative Roundup

    Episode 48: Episode 48 – 2024 Legislative Roundup
    Mar 12 2024

    How will the insurance bills that passed in the recently completed 2024 Florida legislative session compliment past marketplace reforms? Is a property insurance market marred by carrier insolvencies in recent years and ongoing double-digit rate increases starting to stabilize?


    Former Florida Deputy Insurance Commissioner Lisa Miller talks with two legislators about the new laws expected to impact Florida’s property insurance and real estate markets, reinsurance prices, condominium affordability, and their joint belief in bipartisanship for finding workable policy solutions.


    Show Notes


    Florida State Representative Tom Fabricio     (R-Miami Lakes) sits on the House Insurance & Banking Subcommittee and Chairs the House Ethics, Elections & Open Government Subcommittee. He is a former insurance defense attorney whose practice now focuses on commercial and real estate litigation, including real estate transactions.


    Florida State Senator Nick DiCeglie     (R-St. Petersburg) is Vice Chair of the Senate Banking and Insurance Committee, Chair of the Senate Transportation Committee, and a former Chair of the House Insurance & Banking Subcommittee. He is President and CEO of Hope Villages of America, a Tampa Bay area nonprofit organization addressing hunger, homelessness, and domestic violence.


    Both lawmakers discussed their motivation for entering the Florida Legislature and their vision for Florida’s homeowners insurance marketplace and by extension, the state economy. Topics included the admitted insurance market (those companies whose rates and policy forms are approved by state regulators) and the surplus lines companies (those whose rates and forms are largely unregulated, and who often insure risks admitted companies don’t), along with reinsurance companies, who provide catastrophe insurance for insurance companies. Among the bills and issues discussed on the podcast with host Lisa Miller:

    • HB 1503 authorizes surplus lines insurance companies to take out policies (“takeouts”) from the legislatively-created and state-backed Citizens Property Insurance Corporation’s non-homesteaded residential properties, such as second homes, among other risks. “I think surplus lines are important (for) it allows other free market competition,” said Rep. Fabricio. “Because ultimately, with Citizens having a population of over 1.2 million to close to 1.3 million policies, we need to depopulate Citizens. We need to bring Citizens down to a number under a million policies, where Citizens will be truly our carrier of last resort,” he said.
    • HB 1029 applies the popular My Safe Florida Home homeowners program to condominium complexes and individual condo unit owners in an initial pilot program. The program offers a $2 to $1 match to incentivize homeowners to harden their homes from future hurricanes. “Anytime that we can mitigate losses in the state, it’s going to go a long way in contributing to that healthy insurance market,” said Sen. DiCeglie, who sponsored the Senate companion bill. “In my district alone, we have thousands of condominium associations and those folks are looking for relief as well. Recent condominium reforms requiring them to put more money in reserves, so that they're making the necessary repairs and upkeep of the condominiums (together with)....

    (For full Show Notes, visit https://lisamillerassociates.com/episode-48-2024-legislative-roundup/ )

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    38 mins
  • Episode 47: Episode 47 – Stress & Strain of Adjusting

    Episode 47: Episode 47 – Stress & Strain of Adjusting
    Feb 28 2024


    Ray Shelton, Ph.D.     is a nationally-known expert on stress and the impacts it has on frontline personnel in disasters and other crises. He is a Fellow and the Director of Professional Development for The American Academy of Experts in Traumatic Stress, in Miller Place, New York. He’s seen tragedy first-hand over 35 years serving with the Nassau County, New York Police department, including the Twin Towers Collapse during 9/11. He’s also a former firefighter and paramedic.


    “The adjusters are no different than fire, police, and EMS, they're front line. They're action-oriented. They take risks. They have tremendous attention to detail. They have a powerful need for control, to help people get their lives back in order,” said Shelton. “But the price that is paid for that, is all of the memories, all of the conversations, all of the sites that they see stays with them. There's absolutely no delete button in the human brain.”


    Shelton worked with the Liberty Mutual Insurance Catastrophe Response Team during the California Wildfires in 2008 and subsequent tornado outbreaks across the country. That’s where he met Jenny Pye, M.S., whose 35 years with Liberty Mutual included serving as a Property Claims Manager and Director of Quality Improvement for Auto Physical Damage (APD), Property, and Shared Services.


    “Every time I hear Ray talk, it takes me back to early in my career when I was an adjuster in the field and would go out and have multiple fatality 18-Wheeler accidents, and just the emotions of being on scene and investigating a claim,” said Pye.
    “Sometimes the bodies were still there and then talking to their families, just all those emotions.”


    Today, Pye is the Director of Commercial Claims at Pilot Catastrophe Services, based in Mobile, Alabama. She helps adjusters and the firms they serve to not only proficiently manage the technical part of the job, but manage the emotional toll that claims can have. She said adjusters who strive for great customer experience, often ignore or cover-up signs of traumatic stress.


    “But sometimes you get feedback as a manager and hopefully before you get that feedback from your customer, you're recognizing these issues,” said Pye. “Maybe the adjuster is not as responsive as they normally are. It's not just answering a text or phone call, if you're calling about a claim, it can be on a Zoom call and you will see where these folks that are normally engaged are not engaged.” That, she adds, requires claim managers to “finely tune your senses to be aware of what’s going on.”


    Shelton, who presents “Fine Tuned Adjuster” webinars for the Property Loss & Research Bureau said there are consequences of not recognizing the signs in adjusters or of claims management not responding to the signs.


    “If you do nothing, it stops productivity and the bigger danger (is) maybe that you lose that person who has bottled this all up from multiple times that this has occurred and finally says, ‘You know, I've had enough’ and they leave the industry,” Shelton said, noting the current market challenge of recruiting adjusters to replace those that leave the profession.

    (For full Show Notes, visit https://lisamillerassociates.com/episode-47-stress-strain-of-adjusting/)



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    22 mins
  • Episode 46: Episode 46 – Insurers: Know the Building AND The Board

    Episode 46: Episode 46 – Insurers: Know the Building AND The Board
    Nov 14 2023

    Advances in artificial intelligence (AI) and machine learning are getting closer to providing insurance companies with a new underwriting tool to combat fraud: the ability to review meeting minutes and other public documents from homeowners and condominium associations, whose communities are home to nearly half of Florida’s 22.3 million residents.

    Several Florida associations have been accused of recent wrongdoing, including one where four former board members were arrested, accused of engaging in a multi-million dollar embezzlement of monthly dues from residents. Former Florida Deputy Insurance Commissioner Lisa Miller sat down with an insurance lawyer and an insurance services company executive who uses AI, to find out how often this fraud happens, how it increases property insurance rates, and exactly how the new technology to fight it will work.


    Show Notes


    The South Florida Sun Sentinel did a recent exposé of a West Miami development called The Hammocks, a 6,500-unit community of houses, townhouses, and condominiums. Four former association board members were arrested for allegedly engaging in an intricate scheme to embezzle millions of dollars in monthly dues from residents. Authorities say $2.4 million in checks were written to five companies that did little or no work for the homeowners association (HOA) – two of them owned by the husband of the former board president.


    Andy McGuire    , Chief Strategy Officer and Co-Founder of PEAK6 InsurTech, said such fraudulent practices contribute to inflationary pricing and higher insurance rates. He said advances in technology, especially artificial intelligence (AI) and the machine learning process, are providing better insights into risk. His company’s subsidiary, Focus Technologies, is doing this today to serve its customers better.


    “With enough observations, you can run a model, for example, on the language used in the meeting minutes to potentially pick up on schemes,” said McGuire. “Now that we have this example, for this particular issue, we can build an AI and teach it with these talk paths or words and knowing that it resulted in fraud, you have your first learning. You can get enough positive observations that you now have a model that an underwriter can load the minutes into and get a prediction. Combine that with financial data and a propensity to commit fraud of each individual member of the board, and you have a fully automated decision tree. I don't think we're totally there yet, but we're really close. This is the future,” said McGuire, whose 25 years in the industry include risk management and reinsurance.


    Tiffany Rothenberg     is a Partner at the Kelley Kronenberg law firm’s West Palm Beach office in the heart of Florida’s condominium country. She represents commercial property insurance companies in complex coverage disputes and is an expert in the HOA and condominium association insurance claims arena.


    “I can't tell you how frequently we end up seeing this kind of a scenario,” Rothenberg told host Lisa Miller. “I just had a case here in Palm Beach County, where the association submitted a $4.5 million dollar Hurricane Irma claim for roof damage. When we started to review their condo records, we discovered that the association actually had five roof replacement proposals that were all under $1 million. And then during depositions, it came out they actually signed a contract with one of those roofing contractors for around... (For full Show Notes, visit https://lisamillerassociates.com/episode-46-insurers-know-the-building-and-the-board/)

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    28 mins
  • Episode 45: Episode 45 – Insurance Claim Estimates Change & Are Supposed to!

    Episode 45: Episode 45 – Insurance Claim Estimates Change & Are Supposed to!
    Jun 2 2023
    Media coverage has intensified over an allegation by three independent insurance adjusters that Florida property insurance companies are cheating their policyholders out of rightful claim payouts. The three accuse the industry of altering their field adjuster reports and reducing claim payouts – all without their knowledge or approval. Former Florida Deputy Insurance Commissioner Lisa Miller sat down with two independent field adjusters and an attorney who represents insurance companies to learn their perspective and just how damage claims – and their payouts – are ultimately decided and by whom. Show Notes The three adjusters and their allegations first appeared in public last December to testify during the Florida Legislature’s special session which resulted in a series of new consumer insurance reforms. The reforms included the end of one-way attorney fees for property insurance lawsuits, the end of Assignment of Benefit contracts, and a further tightening of claim practices, among other things. These were all abusive practices by bad actors against insurance companies and policyholders that were blamed for driving up the cost of insurance and creating market turmoil. (For full Show Notes, visit https://lisamillerassociates.com/13875-2/) Shawn Kelliher of Cape Coral is a 16-year veteran in the insurance adjusting business. His first 13 years were working for Farmers Insurance Company as a desk adjuster and then as a catastrophe field adjuster, including large loss and complex claims across the country. He said “it’s absolutely not the case” that insurance companies are out to get everybody and explained that there are many legitimate reasons why field damage estimate reports change. Field adjusters often don’t know what damage is covered by the insurance policy. “Some policies have actual cash value only coverage, some policies have specific exclusions for certain items and a lot of times we don't know that,” Kelliher said. “So we see and document the damage and that goes in our report and that’s sent up (to the independent adjusting firm or insurance company), only to be later found out that, unfortunately, in those circumstances where they (the policyholders) don't have coverage, those items have to be removed or taken out of the estimate. And it's not a malicious situation,” the Naples, Florida native said. Kelliher said he’s seen it many times over the past three years that he’s been an independent adjuster in Florida. He said he works for a variety of adjusting firms and across a vast array of insurance carriers, doing both residential and commercial work. Vanessa McGonigal, an independent field adjuster from Cooper City agrees. Often times, she said she is not aware of any changes that may take place in the final adjusting report on a claim. “If we're preparing an estimate for all of the damages we see and we submit that and coverage is not afforded for something written on our estimate, where is it that we should give permission to have that removed? If it's not covered, it's not covered,” McGonigal said. She began her career in 2009 as an estimator for a general contractor and then five years ago, became an independent field adjuster. She said she has worked for a couple of independent insurance adjusting firms, doing both residential and commercial claims, including from Hurricane Ian.Both McGonigal and Kelliher said that if there is a change to the estimate, sometimes they make it, sometimes their adjustment firm does it, or the desk adjuster at the insurance company, depending on the change and the situation. “They'll call me and say, ‘Hey, you know, I read your report, I saw your photos, this is what I was thinking. Can you kind of explain your thought process here or justify what it is that you put in your estimate?’ and we’ll have a conversation about it,” said Kelliher, who has worked “several hundred” Hurricane Ian claims. “And ultimately, again, ultimately, it's the carrier's determination of coverage. As independent adjusters, we have zero claims authority to extend coverage. The adjustments that are being made, are to bring the estimate accurate, or in line with the policy or coverages as endorsed.”McGonigal outlined the steps she takes as a field adjuster from the time she is assigned the claim to delivering her report on damage. She said her typical day could include handling up to 15 Hurricane Ian claims. That doesn’t leave a lot of time – nor should it – for follow-up, unless there’s a question or a dispute about damages, the Hollywood native said. Robert Schulte is an attorney with the Louisiana-based Monson Law Firm, working in its Florida office. He has represented Florida insurance companies in homeowners and commercial insurance matters since 2012 and is skeptical of the three adjusters’ allegations against the industry. “In the weeks before ...
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    33 mins
  • Episode 44: Episode 44 – Dynamic Duo: Ian Hit Hard

    Episode 44: Episode 44 – Dynamic Duo: Ian Hit Hard
    May 15 2023
    An interim report submitted to the Florida Building Commission says that Southwest Florida coastal communities impacted by last September’s Hurricane Ian were “ill-prepared” for the storm surge and flooding, despite lessons on wind mitigation learned from Hurricane Charley 18 years earlier. Ian was the costliest storm in Florida history, killing 156 people and causing an estimated $109.5 billion in damage in Florida. Only an estimated half of that will be covered by insurance.Former Florida Deputy Insurance Commissioner Lisa Miller sat down with the report’s co-author and another extreme events scientist who produced early catastrophic models on Ian for insurance companies. They discussed how this new research shows some of the same patterns of destruction seen in prior storms, that Florida hurricanes are not getting stronger or more frequent, how elderly and poor residents are disproportionately hurt, potential changes to the state building code, and why a new approach to mitigation is needed. Show Notes New lessons are emerging from Hurricane Ian, the high-end Category 4 hurricane that made landfall near Fort Myers Beach on September 28, 2022. An interim report by a team of scientists supported by the Florida Building Commission showed Ian’s tropical storm-force wind field was 2.3 times the diameter of 2004’s Hurricane Charley. The greater resulting storm surge of 13 feet impacted high population areas living in both elevated and on-grade homes along hundreds of miles of canals and coastal frontage. (For full Show Notes, visit https://lisamillerassociates.com/episode-44-dynamic-duo-ian-hit-hard/) Findings: The report evaluates specific building code-related impacts to structural performance, including breakaway walls relative to code provisions, placement of the coastal construction control line, evidence for surge-induced floor slab uplift forces, and performance of common roof cover and wall cladding elements. Dr. David O. Prevatt, one of the report’s co-authors, is a Professor of Civil & Coastal Engineering at the University of Florida’s Herbert Wertheim College of Engineering. He is part of the Structural Extreme Events Reconnaissance (StEER) Network of researchers and product engineers that conducts surveys to assess building performance after each hurricane. Its evaluation was used in the interim report and captured Hurricane Ian’s damage patterns and storm surge. Dr. Prevatt said Ian was not a design level wind-event, meaning its wind speed on land of about 120 mph was below the building code standards of 154-160 mph for Lee County, where it made landfall on September 28, 2022.“The severe damage we saw was really the flooding, in particular the manufactured homes on Fort Myers Beach and mostly older slab-on-grade homes,” said Dr. Prevatt. “The good news, if there is any that we can draw from this, is that recent construction built to the recent Florida Building Code standards performed well, even in areas where they were impacted by the 13-foot high storm surge.”Yet, Ian destroyed or severely damaged about 20,000 homes in a wide path from Lee County on the Gulf Coast and inland across central Florida to Daytona Beach on Florida’s Atlantic Coast. Dr. Prevatt said he saw the same patterns of damage in Ian that he saw in the previous six years from Hurricanes Matthew, Irma, and Michael. “It’s one of the saddest parts for me. If we don't harden our communities or retreat and move them away from these intense events, we will repeat what we've seen here five, 10, 20 years down the road,” said Dr. Prevatt. Dr. Karthik Ramanathan is Vice President of Research at Verisk, the worldwide data analytics and risk assessment firm. He led the catastrophe modeling team that estimated Hurricane Ian’s initial insurance and reinsurance losses at between $42 billion to $57 billion, not including federal flood insurance losses. The firm’s catastrophe or extreme event models not only help insurance companies determine adequate insurance premiums to the assessed value of risk and speed adjusters to the hardest hit areas right after the storm but “can also act as excellent platforms for you to test out the impact of mitigation measures,” said Dr. Ramanathan. “As David said, the performance of manufactured homes or mobile homes continues to be a major issue, even 30 years after Hurricane Andrew, although a lot has been done to strengthen them,” said Dr. Ramanathan. “We saw a colossal amount of damage to manufactured homes. Older and middle aged homes also saw significant damage.” He and his team spent a week in South Florida after Hurricane Ian made landfall, surveying damage in both coastal and inland counties. Some inland counties he noted had “pretty staggering” claim losses similar to coastal counties near Ian’s landfall.“Even on the wind side, some of these inland counties saw a significant amount of...
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    38 mins
  • Episode 43: Episode 43 – Future of Florida Insurance Litigation

    Episode 43: Episode 43 – Future of Florida Insurance Litigation
    Feb 16 2023
    The December 2022 property insurance market reforms passed by the Florida Legislature are making a big difference already, with fewer and less severe non-hurricane claims and fewer daily lawsuits, according to a major Florida insurance company. Former Florida Deputy Insurance Commissioner Lisa Miller talks with Stacey Giulianti of Florida Peninsula Insurance Company on how the reforms have leveled the playing field in insurance litigation and together with innovative industry practices, will bring positive results for consumers, carriers, and their reinsurance companies.Show NotesStacey Giulianti is a Co-Founder and Chief Legal Officer at Florida Peninsula Insurance Company, a Florida-based homeowners property insurance carrier. Together with its sister company Edison Insurance, they have a combined 180,000 polices in Florida. The 2022 reforms were designed to stem high insurance and reinsurance rates, carrier insolvencies, inflated claims, an overly-competitive residual market, and especially excessive litigation. According to the Florida Office of Insurance Regulation, in 2021 Florida had 7% of the nation’s homeowners insurance claims yet 76% of the nation’s homeowners insurance lawsuits. (For full Show Notes, visit https://lisamillerassociates.com/episode-43-future-of-florida-insurance-litigation/) Giulianti, a former plaintiff attorney before representing insurance companies, said the reforms, specifically the elimination of one-way attorney fees, will “level the playing field” between plaintiff and defense attorneys in disputed claims. “The problem was that it really only gave the incentive to the plaintiff lawyers, to people like me back in the day, to file that suit, no matter what, it doesn't matter about mediating, it doesn't matter about coming together and trying to find common ground, it was like, ‘Who cares, I am going to get attorney fees one way or the other,’” he said.He disagrees with critics who argued that eliminating the one-way attorney fees would create a barrier for consumers looking to find an attorney to sue an insurance company on their behalf. He said courts at the end of a case can still award attorney fees if justified and tax costs, such as the hiring of an expert witness, something he said is actually needed in less than 10% of disputes. “That's a little bit of nonsense from plaintiff lawyers trying to say that you need an expert in every case,” said Giulianti, who is also an accredited claims adjuster. “You don't, because most of these cases, we already know what the damage is. And it's really a scope and pricing differential. Do you repair it, do you replace it, is it $5,000 to repair that, or is it $50,000 to repair that?” Giulianti said that hiring an expert would still be less expensive to the consumer than paying 30% to 40% of their court award in attorney fees.Innovative Options: The reforms allow insurance companies to offer mandatory binding arbitration in their policies with a resulting premium discount. “Ultimately what we want is a quick, easy, and inexpensive way to get an answer. What we are really looking for is for someone to tell us either way, what the answer is to the dispute. You get the answer relatively fast and it’s resolved, versus court cases that can last for years.” Giulianti said the vast majority of claims are undisputed and simply get paid by insurance companies.Citizens Property Insurance Corporation, the state-backed residual market carrier in Florida, recently received regulatory approval to handle contested claims outside of court through the state’s Division of Administrative Hearings. These are for claims that were either denied because of a determination of no coverage or contract limitations regarding the coverage amount. “I think those types of judges from the administrative side are every bit as smart as anybody else who's going to be sitting on the bench and making those decisions,” said Giulianti, who is a member of both the Florida and Maine Bars.Florida Peninsula Insurance, along with some other carriers, have created “Customer Experience Departments,” in an effort to avoid disputes in the first place by making the claim process “as smooth as possible,” he said. During Hurricanes Ian and Nicole, Giulianti said he personally handled 300-400 First Notice of Loss calls and an additional 200-300 follow-up calls. “We have to do a better job, all of us as an industry, of walking people through the process and being transparent.” His suggestion: treat the customer as you would “the friend of the company’s CEO.”Reinsurance: Host Miller noted that although the recent legislative reforms included some state-provided assistance for insurance carriers needing reinsurance, it will not be enough, given the dwindling availability and affordability of reinsurance. She asked Giulianti what a reinsurer should look at in an insurance company that it...
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    34 mins
  • Episode 42: Episode 42 – Barry Gilway: Florida’s New Law is a Profound Change

    Episode 42: Episode 42 – Barry Gilway: Florida’s New Law is a Profound Change
    Dec 30 2022
    Florida property insurance companies, their policyholders, and repair contractors are starting the New Year with a new law designed to reform an out-of-control marketplace. The Florida Legislature in December passed comprehensive measures to stem high insurance and reinsurance rates, carrier insolvencies, inflated claims, excessive litigation, and an overly-competitive residual market.Former Florida Deputy Insurance Commissioner Lisa Miller talks with Citizens Property Insurance President & CEO Barry Gilway, insurance agency executive Andy McGuire, and reinsurance broker Adam Schwebach about the new law and the expectation it will help rebalance Florida’s decimated property insurance market.Show NotesSix Florida insurance companies went insolvent in 2022 and a seventh went into a regulated policy run-off. Host Miller was joined in the podcast by Barry Gilway, President, CEO, and Executive Director of Citizens Property Insurance; Adam Schwebach, Executive Vice President of reinsurance broker Gallagher Re; and Andy McGuire, Co-CEO of PEAK6 InsurTech, which includes an insurance agency representing more than 100,000 policyholders. (For full Show Notes, visit https://lisamillerassociates.com/episode-42-barry-gilway-floridas-new-law-is-a-profound-change/) The major provisions of the new law (SB 2-A) cover:Attorney Fees: Ends one-way attorney fees in residential and commercial property insurance policy lawsuits;Offers of Judgment: Reinstates the civil offer of judgment statute (also known as Proposals for Settlement) and makes attorney fees available for the prevailing party, while also allowing for joint offers of judgment;AOBS: Prohibits Assignment of Benefits (AOB) contracts of residential and commercial property insurance policies issued on or after January 1, 2023;Bad Faith: Prohibits the filing of a bad faith lawsuit until a final judgement is issued against the insurance company in the original claim dispute;Citizens Property Insurance Reforms: Makes many essential improvements to current laws governing the state-backed “insurer of last resort,” Citizens Property Insurance Corporation, including:- Changing the eligibility to remain a Citizens policyholder, by requiring that private insurance company coverage has to be 20% more expensive (up from 15%, to match current rules on new policies) and likewise for commercial residential policies;- Ending capped rates (the so-called “glide-path”) and requiring its rates be actuarially-sound and be “non-competitive” with admitted companies’ market rates;- Defining and allowing higher rates for second (non-homesteaded) homes; and- Requiring personal lines policyholders purchase flood insurance to become or remain a Citizens policyholder.Reinsurance: Establishes a second optional hurricane reinsurance fund (The Florida Optional Reinsurance Assistance Program) for carriers, offering rates of 50% to 65% of the cost of on-line rates, while maintaining the Reinsurance to Assist Policyholders (RAP) program created in the May special session;Arbitration: Allows carriers to offer mandatory binding arbitration in their policies with a resulting premium discount;Claims Handling: Reduces from 90 days to 60 days the time insurance companies have to pay or deny a claim, unless extended by regulators; and reduce from 14 days to 7 days the time a carrier has to review and acknowledge a claim communication and begin an investigation, along with other time requirement changes;Claim Filing: Further tightens deadlines for policyholders to report a claim from 2 years to 1 year for a new or reopened claim, and from 3 years to 18 months for a supplemental claim; andGreater OIR Regulation: Allows the Florida Office of Insurance Regulation (OIR) to withdraw approval of policies with an appraisal clause for companies that routinely invoke it; allows OIR to do market conduct exams after a hurricane on those companies in the top 20% of claims filed or DFS complaints and to include an examination of their MGAs; and requires companies begin monthly reporting of the numbers of claims opened, closed, pending, and those seeking alternative dispute resolution and of which type.You can read a more detailed list of major provisions here of the December 2022 law, built upon previous measures passed in the May 2022 legislative special session.Attorney Fees & AOBs: Gilway, a 46-year veteran of the property insurance industry, called the law “historic,” for repealing the state’s one-way attorney fee statute which he blamed for putting seven insurance companies out of business in 2022, reducing the availability and affordable of insurance for consumers. “From a Citizens Insurance standpoint, our average litigation payment is $77,000 and the attorney fee associated with that payment is $39,000. I’m paying more than 1,000 attorneys to defend the 20,000 outstanding lawsuits we have, brought because there’s an automatic payment under the one-way statute. You have ...
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    43 mins