Florida’s Chief Financial Officer (CFO), Jimmy Patronis, has revealed five initiatives designed to tackle fraud and litigation in the state that his office will be pushing forward at the Special Session set for later this month.
As numerous issues continue to hinder Florida’s property insurance and reinsurance marketplace, governor Ron DeSantis issued a proclamation calling for a special legislative session.
Scheduled to commence on May 23rd and extend no later than May 27th, 2022, the special session will consider legislation related to property insurance, reinsurance, and changes to the Florida Building Code.
The aim is to improve the affordability of property insurance, the Office of Insurance Regulation, civil remedies, and appropriations.
Speaking earlier today, Patronis, Florida CFO, State Fire Marshal, and member of the Florida Cabinet, said: “In this Special Session, my office will be pushing forward five different initiatives aiming at cracking down the kind of fraud and litigation that drives up rates on every single one of us.”
The first is the creation of three new anti-fraud homeowner squads, in addition to the existing two, that Patronis said will “live and breathe property insurance fraud.”
Next there’s $3 million in funding for a fraud-related campaign designed to educate the public and ultimately help property insurance policyholders in Florida understand what it actually means to sign away a claim.
The third initiative relates to amendments to qui tam law, which comes under the The False Claims Act. The idea here, explained Patronis, is to implement a “reporting mechanism that will incentivize the public to come forward and report the fraud taking place.”
Fourth, is to financially encourage people to call the Florida blocked Florida Fraud Fighter tip line.
The final initiative revealed by the CFO earlier today has focus on adjustments to laws surrounding assignment of benefits (AOB), which, as our readers will be aware, has become a real issue for the Florida property market.
Patronis said that his office would be pushing for reform to AOB laws, “including banning the bundling of these assignment of benefits.”
Expanding on the AOB challenge, Patronis added: “Much of the fraud and abuse in our legal system we have highlighted this morning started with a policyholder assigning their benefits away to somebody else, to a fraudster. We cannot allow law firms and public adjusters to get into the business of bundling these AOB’s and selling them the same way you would a security for a profit.
“I want to deter this feeding frenzy of bad actors going after our consumers to sell AOB’s on the open market, which again ultimately drives up rates, which drives carriers out of the state of Florida, because the environment allows that type of activity to exist in the first place.”
Patronis was joined by Florida’s Citizens Property Insurance Corporation Chief Executive Officer (CEO), Barry Gilway, who said that one way his company is trying to keep premiums down is by taking a hard line on fraud.
“I’m thrilled to hear the CFO today announce all of these aspects that will make such a significant difference,” said Gilway.
Insurers and reinsurers operating in the state will welcome the fact these fraud and AOB focused changes will be discussed at the special session. And while there’s no guarantees it will be embedded into legislation, it’s promising that these issues will definitely be tabled at the session later in the month.