This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives.
STORAGE NAME: h1191.IBS
DATE: 1/23/2024
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 1191 Assignment of Benefits for Surplus Lines Insurers
SPONSOR(S): Fabricio
TIED BILLS: IDEN./SIM. BILLS:
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Insurance & Banking Subcommittee Fortenberry Lloyd
2) Civil Justice Subcommittee
3) Commerce Committee
SUMMARY ANALYSIS
An assignment is the voluntary transfer of the rights of one party under a contract to another party. An AOB is
an instrument that assigns or transfers post-loss benefits under a residential or commercial property insurance
policy to or from a person who protects, repairs, restores, or replaces property or mitigates against further
property damage. Once an AOB is executed, the assignee can take any action the policyholder could take to
enforce the insurance policy. Accordingly, if an insurer refuses to pay an assignee for a claim submitted under
the policy, the assignee may file a lawsuit against the insurer.
During Special Session 2022A, the Legislature prohibited policyholders from assigning, in whole or in part, any
post-loss insurance benefit under a residential or commercial insurance policy issued by an authorized insurer
on or after January 1, 2023. Any attempt to assign post-loss benefits under such a policy is void, invalid, and
unenforceable.
Surplus lines insurance refers to a category of insurance for which the admitted market is unable or unwilling to
provide coverage. Surplus lines insurers are not “authorized” insurers as defined in the Florida Insurance
Code. Rather, surplus lines insurers are “unauthorized” insurers, but may transact surplus lines insurance if
they are made eligible by OIR. Unless specifically stated, the provisions of the Code, including those regarding
AOBs, do not apply to surplus lines policies.
Beginning July 1, 2024, the bill applies the existing prohibition on AOBs for residential and commercial property
insurance policies to policies issued by surplus lines insurers in addition to policies issued by authorized
insurers.
The bill has no impact on local or state government revenues or expenditures. It has an indeterminate direct
economic impact on the private sector.
The bill is effective on July 1, 2024. STORAGE NAME: h1191.IBS PAGE: 2
DATE: 1/23/2024
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Background
Assignment of Benefits (AOB)
An assignment is the voluntary transfer of the rights of one party under a contract to another party. An
AOB is an instrument that assigns or transfers post-loss benefits under a residential or commercial
property insurance policy to or from a person who protects, repairs, restores, or replaces property or
mitigates against further property damage.
1
Once an AOB is executed, the assignee can take any action the policyholder could take to enforce the
insurance policy. Accordingly, if an insurer refuses to pay an assignee
2
for a claim submitted under the
policy, the assignee may file a lawsuit against the insurer. An assignee must give an insurer and the
assignor
3
prior written notice of at least 10 business days before filing suit on a claim (pre-suit notice).
4
The pre-suit notice may not be served before the insurer has made a determination of coverage.
5
It
must specify the damages in dispute, the amount claimed, and a pre-suit settlement demand, and must
include an itemized, detailed, written invoice or estimate of the work performed or to be performed.
6
During Special Session 2022A, the Legislature prohibited policyholders from assigning, in whole or in
part, any post-loss insurance benefit under a residential or commercial insurance policy issued by an
authorized insurer on or after January 1, 2023.
7
Any attempt to assign post-loss benefits under such a
policy is void, invalid, and unenforceable.
8
Any assignment agreement executed under a residential or
commercial property insurance policy issued before January 1, 2023 is valid as long as it complies with
the requirements of s. 627.7152, F.S.
Surplus Lines Insurers
Surplus lines insurance refers to a category of insurance for which the admitted market is unable or
unwilling to provide coverage.
9
Surplus lines insurers are not “authorized” insurers as defined in the
Florida Insurance Code (Code),
10
which means they do not obtain a certificate of authority from Office
of Insurance Regulation (OIR) to transact insurance in Florida.
11
Rather, surplus lines insurers are
“unauthorized” insurers,
12
but may transact surplus lines insurance if they are made eligible by OIR.
1
S. 627.7152(1)(b), F.S.
2
An assignee is the party that receives the right to pursue the assigned benefits.
3
An assignor is the party who legally transfers rights or benefits to another individual, the assignee.
4
S. 627.7152(9)(b), F.S.
5
Id.
6
Id.
7
Ch. 2022-271, Laws of Fla. The existing statutory carve-out for a seller-to-buyer assignment related to ongoing
insurance claims was maintained by law. See s. 627.7152(11), F.S.
8
S. 627.7152(13)(a), F.S.
9
The admitted market is comprised of insurance companies licensed to transact insurance in Florida. The administration of surplus
lines insurance business is managed by the Florida Surplus Lines Service Office. S. 626.921, F.S.
10
The Florida Insurance Code is chapters 624-632, 634, 635, 636, 641, 642, 648, and 651, F.S. S. 624.01, F.S.
11
S. 624.09(1), F.S.
12
S. 624.09(2), F.S. STORAGE NAME: h1191.IBS PAGE: 3
DATE: 1/23/2024
The export of insurance policies, including property insurance policies, to the surplus lines market is
regulated by the Florida Office of Insurance Regulation (OIR) under the Florida Surplus Lines Law.
13
Pursuant to the Surplus Lines Law, unless specifically stated, the provisions of the Code, including
those regarding AOBs, do not apply to surplus lines policies.
Effect of the Bill
Beginning July 1, 2024, the bill applies the existing prohibition on AOBs for residential and commercial
property insurance to policies issued by surplus lines insurers, in addition to policies issued by
authorized insurers.
B. SECTION DIRECTORY:
Section 1. Amends s. 627.7152, F.S., relating to assignment agreements.
Section 2. Provides an effective date of July 1, 2024.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
While the elimination of AOBs for surplus lines property insurance policies may appear to affect third-
party providers, recent legislation regarding attorney fees for property insurance litigation may mitigate
any financial impact of this bill.
D. FISCAL COMMENTS:
None.
13
Ss. 626.913–626.937, F.S., constitute the Florida Surplus Lines Law.
STORAGE NAME: h1191.IBS PAGE: 4
DATE: 1/23/2024
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not Applicable. The bill does not appear to affect county or municipal governments.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
The bill neither authorizes nor requires administrative rulemaking.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES