A handful of bills regarding proposed statutes concerning assignment of property insurance benefits were withdrawn from both houses of the Florida legislature this month. Each of the proposed laws were directed toward assignments entered into by property owners in exchange for the agreement of the assignee — typically a contractor — to complete the associated repairs for which the insurance benefits have not yet been paid, in whole or in part, by the carrier.
For instance, Senate Bill (SB) 62 would have created a new statute that pertained to “assignment agreements,” defined as “any instrument by which post-loss property insurance benefits for services to protect, repair, restore, or replace property, or to mitigate against further damage to property, are assigned, transferred, or conveyed, regardless of how named or styled.” Under the statute proposed by SB 62, the assignor/policyholder could rescind the assignment with no penalty or fee within seven business days of the insured’s execution of the assignment. The SB 62 would have also excluded an assignee/contractor from seeking an award of attorneys’ fees against the carrier under Florida’s other statutes that entitle an insured to recover the insured’s reasonable attorneys’ fees if the insured prevails in a lawsuit against the carrier.
In addition, SB 62 would have imposed a number of obligations on the assignee/contractor, including the obligation to deliver a copy of the assignment to the insurer within three business days and participate in an appraisal or other alternative dispute resolution process provided under the policy. By its terms, SB 62 did not apply to assignments that were “granted to a subsequent purchaser of property who acquires an insurable interest in the property following a loss.”
An amended version of SB 62, which was incorporated in a larger bill, CS/CS/SB 1168, was limited to assignments of “residential homeowner’s property insurance post-loss benefits” and included a notice requirement regarding the assignor/insured’s right to cancel the assignment. It would have also estopped an insurer from challenging the necessity or workmanship of the assignee/contractor’s work if the insurer failed “to attempt in good faith” to inspect the property within seven days of being notified of the underlying loss. The amended version of SB 62, as set forth in CS/CS/SB 1168, also included a provision directing the Office of Insurance Regulation to collect from carriers certain data regarding each assignment claim submitted to them.
CS/CS/SB 1168 would have added a provision to an existing statute, section 627.422 of the Florida Statutes. That provision would have prohibited the “restriction” of the assignment of post-loss benefits arising under personal lines residential property insurance policies.
The last piece of withdrawn legislation I want to mention, House Bill (HB) 7015, appears to have been the House version of SB 62. HB 7015 went further than SB 62 and its amended version in CS/CS/SB 1168. HB 7015 would have established a pre-litigation procedure under which the assignee/contractor and the carrier would have been required to exchange settlement offers regarding the assigned claim. If they did not reach an agreement and the matter went to litigation, the parties’ entitlement to attorneys’ fees would have been determined by the difference between (1) the assignee/contractor’s presuit settlement offer and (2) the judgment ultimately obtained by the assignee. If the difference was less than 25 percent, the carrier would be entitled to an award of its attorneys’ fees. If the difference was at least 25 percent but less than 50 percent, neither party would be entitled to their attorneys’ fees, and if the difference was 50 percent or greater, the assignee/contractor would be entitled to its attorneys’ fees.
Because these proposed bills were withdrawn from consideration, they do not affect the current law regarding enforcement of post-loss assignments in Florida.
