Assignment of Benefits for Surplus Lines Insurers
The proposed changes under HB 1191 are significant in terms of the protections they afford to insurers against fraudulent assignment of claims, which can have an overall positive impact on the financial health of the insurance market in Florida. Insurers have expressed that the current ease of transferring benefits post-loss can lead to unnecessary financial strain on the industry. By restricting the assignment of these benefits, the bill aims to streamline the claims process and reduce administrative burdens associated with excess claims management.
House Bill 1191 pertains to the assignment of benefits regarding surplus lines insurers specifically relating to post-loss insurance claims. The bill seeks to amend existing laws to prohibit the assignment of such benefits under residential and commercial property insurance policies that are issued on or after January 1, 2023, with a further extension for surplus lines insurers as of July 1, 2024. This change is aimed at reducing the potential for fraud and abuse in insurance claims, a concern raised frequently in recent discussions around the insurance sector in Florida.
Sentiment around HB 1191 appears to lean positively from the insurers’ standpoint, with many supporting the bill as a necessary step to curb fraudulent activities related to insurance claims. However, concerns have been raised by consumer advocacy groups who fear that the restrictions on assignment could limit policyholders' rights and their ability to effectively manage claims— especially in cases where an assigned benefit could otherwise assist in the recovery process post-loss.
Notable points of contention regarding HB 1191 include the balance between preventing fraud and preserving consumer rights. Opponents of the bill argue that the prohibition on assignments may hinder homeowners and business owners from navigating their insurance policies effectively, which in some circumstances, could leave them without adequate recourse after experiencing property loss. These differing perspectives highlight a broader debate on the role of regulation in ensuring both industry sustainability and consumer protection in Florida's insurance landscape.