Florida governor Ron DeSantis has signed two bills, one of which is said to be the most-important insurance reform in the state in recent history.
Senate Bill 2-A looks to further reform the state’s property insurance market through a number of actions.
These include:
- Eliminating one-way attorney fees for property insurance claims, which the state hopes will disincentivise frivolous lawsuits, and realigning Florida’s market to best practices that will promote more market competition in the private insurance industry.
- Reducing the burden of excessive and predatory litigation to help bring down costs for homeowners.
- Enhancing the Office of Insurance Regulation’s ability to complete market conduct examinations of property insurers following a hurricane to hold insurance companies accountable and prevent abuse of the property appraisal process.
- Reducing timelines for insurers to get payments out the door and back into the hands of policyholders as they rebuild their lives.
- Building on reforms passed earlier this year by committing additional funding to provide temporary reinsurance support to help stabilise our market.
A statement from DeSantis’s administration said that SB 2-A builds on progress made during the Special Session held earlier this year to address concerns with the property insurance market. After that Special Session, DeSantis signed SB 2-D, which enacted pro-consumer measures to help alleviate rising insurance costs, increased insurance claim transparency, and cracked down on frivolous lawsuits which drive up costs for all Floridians.
This built upon previous actions taken by the Governor on property insurance including signing House Bill 7065 in 2019 to curtail Assignment of Benefit abuse and SB 76 in 2021 which restructured litigation rules for insurance claims to reduce the burden of excessive litigation.
This latest development follows news last week that the Florida’s property insurance reform bill had been passed by the House and was awaiting a signature from DeSantis, despite opposition from Democrats.
That bill aims to create a $1bn reinsurance fund, reduce litigation costs and may compel some customers to leave state-created insurer Citizens.
Supporters of the bill say its measures are necessary to stabilise Florida’s property market, which has seen numerous insurer insolvencies this year, as well as rate increases and policy cancellations that have impacted policyholders.
DeSantis said: “We have taken an all-hands-on-deck approach to cut through bureaucracy to help our communities recover from Hurricanes Ian and Nicole. I want to thank the Legislature for bringing additional disaster relief to communities across the state as we continue our historic recovery.”
He added: “The issues in Florida’s property insurance market did not occur overnight, and they will not be solved overnight. The historic reforms signed today create an environment which realigns Florida to best practices across the nation, adding much-needed stability to Florida’s market, promoting competition, and increasing consumer choice. I am thankful the Legislature answered the call for meaningful reform.”
