Tampa Bay is Ground-zero for Assignment of Benefits Cases Over Broken Auto Glass

May 25, 2017/in Tampa Bay Times

Tampa Bay is ground-zero for assignment of benefits cases over broken auto glass

Auto glass lawsuits filed by a third party (through what’s known as assignment of benefits) are skyrocketing in Tampa Bay. [Times file photo]

By Malena Carollo
Published: May 25, 2017
Updated: May 25, 2017 at 08:57 PM

When Rachel Thorpe tried to renew her auto insurance last year for her Toyta RAV4, she was stunned to see her monthly premium had nearly doubled to $600. The Sarasota driver was baffled since her only recent claim was over a broken windshield.

The problem: she had signed over her rights to deal directly with the insurance provider to her auto glass company. And, unbeknownst to Thorpe, her insurance company was sued over the repair. Then came the rate hike.

“I was irate,” she said. “I was totally irate.”

There is an air of familiarity to this tale.

Homeowners and insurance companies the past few years have cried foul over what’s known as assignment of benefits, in which a property owner signs over their insurance rights to a third party like a contractor, repair firm or attorney.

A barrage of non-weather related water claims led to big losses at Citizens Property Insurance and other companies, which, in turn, has triggered higher rates for consumers.

Now, instead of property insurers being sued for busted water pipes and leaking roofs, it’s auto insurers sued for cracked windshields. And instead of south Florida — the focal point of the water damage insurance claims — Tampa Bay is now ground zero for auto glass claims.

In the past few years, lawsuits brought by auto glass companies against insurance companies exploded from 1,389 in 2012 to 19,695 in 2016 according to the Florida Department of Financial Services.

Hillsborough County accounts for almost 35 percent of such cases statewide for 2016 — 6,663 — followed by Pinellas County at just above 4,415, a January study by the Florida Justice Reform Institute found.

Related coverage: Leaky pipe problems pose risk to Florida homeowners insurance

Claims that make it to court follow a pattern: An auto glass company offers to fix a consumer’s windshield and deal with the insurance company for them. The consumer then signs an assignment of benefits agreement, allowing the glass company to deal directly with insurance issues. The glass company bills the insurer for the repair, and if the insurance company refuses to pay that amount, the glass company brings a lawsuit.

The latter part is what Thorpe didn’t expect when she had her windshield replaced in February 2016. A crack from an errant rock on the highway grew into a gash one hot day, so she called her insurance company to have it fixed. Everything seemed to go smoothly. Auto Glass America, a company she chose after hearing their ads, replaced the windshield.

But Thorpe was unaware of what happened next. Auto Glass America billed her insurance company, Esurance, for just over $1,200 for the windshield replacement. When Esurance refused to pay, Auto Glass America then assigned Thorpe’s benefits over to a second company, Broward Insurance Recovery Center, which took Esurance to court. Thorpe’s name was included in the plaintiff section as the assignor of benefits to Broward.

Here’s where the central issue crops up: When a consumer takes their insurance company to court over a disputed amount and wins, they are eligible for what’s known as a one-way attorney fee. The fee is a Florida statute that requires insurance companies to pay the winning consumer’s lawyer fees.

“The idea was if David, the insured, is going to take on Goliath, the insurer,” then the smaller party should have their fees paid, said William Large, president of FJRI.

In assignment of benefits cases, the auto glass company is acting as the consumer, and is thus entitled to have their lawyer’s fees paid. This drives up what could be a dispute over a few hundred dollars to a potential bill for a few thousand dollars for the insurance company. Large argues that this is an abuse of assignment of benefits.

“This is a business model perfected by third party corporate vendors and their attorneys to use a statute that was meant to benefit an insured (consumer), not them,” FJRI’s Large said.

According to the FJRI analysis, a majority of the suits come from a small set of auto glass vendors and lawyers. Auto Glass America files far and away the most lawsuits against insurance companies across Florida courts, including 5,589 for 2016. Broward Insurance Recovery filed the second most at about 1,600.

Auto glass companies, however, say they are heading to court so often because insurance companies give them no other choice. Chuck Isaly, owner of Auto Glass America, said that his company has the most lawsuits because of its size. He said lawsuits are the only recourse companies like his have to get paid fairly if insurance companies refuse their bill.

“I can assure you that all auto glass companies simply want to be paid fairly and not be strangled by these Goliath insurance companies,” Isaly said. “We just want to be paid fairly and then compete against each other for the business and make a fair living. That’s all we want in life.”

What’s more, he said, it’s just a few large insurance companies that balk at paying glass companies’ prices. A large swath of Auto Glass America’s cases are against Geico, the largest auto insurer in Florida. Many large companies, Isaly said, have pricing agreements with auto glass companies, which helps both parties avoid such litigation. Isaly said Geico doesn’t have a pricing agreement with his or most other glass companies. Geico would not answer questions for this article, instead referring the Tampa Bay Times to Property Casualty Insurers Association of America, an industry trade association.

Logan McFaddin, Florida-based regional manager for PCIAA, coudn’t directly address Geico’s practices.

But she acknowledged that lawsuits can have unintended consequences for the consumers involved, even unknowingly.

“If you’re seen as a litigious consumer who’s going to sue your (insurance) company right out of the gate, then that’s a risk for the company,” McFaddin said.

The breadth of lawsuits may also lead to higher premiums for consumers, though it’s unclear how much the litigation will actually affect insurance prices. And regulators aren’t talking about it.

Insurance companies and regulators have been extremely vocal about how assignment of benefits have affected their costs. It was a major issue during the recent session of the Florida Legislature, though lawmakers wound up making no changes. When it comes to assignment of benefits for auto insurance, however, state regulators are reluctant to even discuss the topic.

The Office of Insurance Regulation typically tracks assignment of benefits issues and acknowledges that such claims have existed in the state for over a century. But OIR spokesperson Amy Bogner said the agency doesn’t track auto glass claims because they fall under the umbrella of comprehensive coverage and aren’t separated out specifically.

OIR deferred to the Florida Department of Financial Services, which tracks lawsuits related to assignment of benefits, including those for auto glass. DFS would not make someone available for an interview and did not answer a list of emailed questions sent Monday, instead emailing a short statement.

“Similar to what is being seen in the property insurance market, these rising trends will produce negative impacts for consumers in the form of higher rates,” Ashley Carr, director of communications for DFS, said in a email.

http://www.tampabay.com/news/business/banking/tampa-bay-is-ground-zero-for-assignment-of-benefits-cases-over-broken-auto/2325132

House of Cards

May 12, 2017/in Business Observer

‘House of cards’
BY: BETH LUBERECKI | CONTRIBUTING WRITER
May 12, 2017

Kelly Overcash, with Lykes Insurance, says the
Assignmentof Benefits issue is “starting to come
to a head.”

Another Florida Legislature session has ended, and another attempt to pass assignment of benefits reform failed.

If you’ve ever gone to the doctor, you’re probably familiar with the concept of assignment of benefits. You sign a form that allows your health-care provider to work directly with your insurance company to secure compensation for their work. It’s a practice that tends to work pretty smoothly.

But AOB agreements are being used more often in property insurance in Florida, and things aren’t working quite as well. In this case, third-party contractors — predominantly working in water remediation and sometimes roofing — get homeowners to sign a document assigning the benefits of their insurance policy over to the vendor.

This gives the vendor the right to deal directly with the insurance company on the claim.

It also gives them the benefits of Florida’s one-way attorney fee statute, which the insurance industry officials say was intended to protect consumers, not contractors. Under that statute, if a homeowner takes his or her insurance company to court over a claim and the homeowner wins, the insurance company must pay the policyholder’s attorney fees, even if the claim amount disputed was just $1 more.

“It helps the little guy stand up to the big guy and levels the playing field,” says Don Matz, president of Tower Hill Insurance, Florida’s largest homeowners’ insurer. “But when an AOB is signed, the contractor gets to stand in the shoes of the insured, and the one-way statute carries over to them. And that was never designed to be a business-to-business arrangement.”

Because of this, AOB lawsuits are on the rise. Florida Chief Financial Officer Jeff Atwater said there were 405 AOB lawsuits across all 67 counties in 2006. In 2016, there were 28,200.

The frequency of water-damage claims in general has increased by 46% since 2010, according to the Florida Office of Insurance Regulation’s 2016 Data Call Study, and the severity of those claims has increased by 28%. It also found that claims with an AOB clause tend to have a much higher severity.

“What’s happened with these third-party vendors and the attorneys that represent them is they’ve taken advantage of this provision,” says William Large, president of the Florida Justice Reform Institute, a nonprofit civil justice reform organization. “So many times the claims are three- or fourfold greater than the market price. The benefit [of the one-way attorney fee statute] is meant for the insured, the Davids of the world. It’s not meant for the Goliaths of a third-party corporate vendor working with an attorney.”

While a lot of the controversial use of AOBs happens in South Florida, it’s an issue that goes statewide. The rise in AOB lawsuits has led insurers to request rate increases, and some private insurance companies are pulling back on their willingness to write policies. That means homeowners will have less choice when it comes to property insurance and be forced to pay more for it, which could impact people’s ability to secure mortgages and buy homes.

“This is only just now starting to come to a head,” says Kelly Overcash, private risk division manager at Lykes Insurance Inc., which has offices in Tampa, Sarasota, Fort Myers and Winter Park. “A lot of companies have said they can’t write new policies because of the abuse. It’s a house of cards.”

Close the loophole

The insurance industry has lobbied to push bills through the Legislature to curb alleged abusive practices related to AOBs for a few years. Trial attorneys have fought back to prevent limitations.

Insurers got fairly close this year with the House passage of HB 1421. That would have created a graduated scale to determine whether attorney fees would be paid by insurers based on the dollar amount in controversy awarded to the plaintiff, with the goal of making lawsuits less lucrative and therefore less appealing.

But nothing made it through the Senate.

“Florida’s hardworking families should remember this – the Florida Senate chose to side with anti-consumer special interests, instead of stepping up and protecting consumers from an AOB loophole that has attracted plaintiffs’ attorneys like gold rush miners,” says Edie Ousley, a spokeswoman for the Florida Chamber of Commerce, one of the leading groups that pushed AOB reform.

In the past, the insurance industry fought similar battles centered on practices it considered abusive related to issues like mold and sinkholes. In those cases, either legislation was passed or limitations were placed on insurance claim amounts, and the problems largely went away. AOBs, in the industry’s mind, are just the latest moneymaking scheme.

“Attorneys started getting involved in AOBs after the 2004-2005 storm seasons,” says Charles “Dick” Tutwiler, president of Tampa-based Tutwiler & Associates Public Adjusters. “All this big business dried up, and it was a great opportunity for them to continue to sue insurance companies. They file a lawsuit, then it becomes an issue of intimidation.”

Homeowners’ insurance policies tend to require that the policyholder show proof of a loss and give their insurance company time to come in and inspect it. Michael Peltier, a spokesman for Citizens Property Insurance Corp., says courts have been ruling that those requirements don’t transfer over to AOB assignees.

“They’re not required to provide the same amount of information to the insurance company as the homeowners themselves,” he says. “From a strategic standpoint, if I’m going to file a lawsuit, I would rather do it through the contractor than the homeowner, because the burden of proof is less burdensome.”

Settling becomes the lesser of two evils. “The average claim that is litigated runs about three times higher than a nonlitigated claim,” says Peltier. “Oftentimes you will simply settle the case, even if you still have to pay the one-way attorney fees. If you continue on, those fees rack up, so it’s less expensive to settle.”

‘Devastating’ bill

Companies and individuals in the water-remediation industry — and the attorneys who defend them — argue AOBs, and in many cases the lawsuits that tend to result from them, are necessary to ensure they get paid at an amount commensurate with their work.

“If I don’t bring suit, [the insurance companies] can push me off for six months,” says Florida Association of Restoration Specialists President Jeff Grant. “They won’t move fast enough to send an adjuster out to inspect the property. They don’t want us to remove things either, but then when mold is growing they want to deny that portion of the claim.”

New Port Richey attorney Dean Makris, who represents vendors and homeowners in lawsuits against insurers, says he’s seen similar delays and underpayments. “That’s really the issue why there’s litigation,” he says. “It’s not so much that AOBs are out there, it’s more so that insurance companies are delaying or underpaying those claims.”

When insurers refuse to pay expenses based on industry standards, Grant says he faces the equivalent of career suicide. “The insurers either have to pay what’s asked or leave it so that I have to sue the client,” he says. “And if I go around suing my clients because their insurance company didn’t pay, I’m not going to be in business long.”

Grant sees the push for legislation as a way for insurance companies to hold on to more money. “It’s just about how much greed,” he says.

Makris says if the House bill became law, it would have been “devastating,” because the freedom to use AOBs is vital for third-party vendors. “It would have crippled if not killed the industry,” he says. “These repair companies might not have been in business anymore.”

The insurance industry feels differently. “Contractors don’t necessarily only do insurance-related work,” says Logan McFaddin, Southeast regional manager for the Property Casualty Insurers Association of America. “If you’re a contractor and someone wants a new roof, you don’t make them sign an AOB and you’re still able to get paid. I think it doesn’t really ring true that they can’t get paid [without an AOB]. I’ve seen testimony from a lot of vendors who say they don’t use AOBs and they don’t have any problem getting paid.”

Insurers also don’t feel AOBs need to totally go away. “We do not oppose the AOB practice,” says Peltier. “It’s a homeowner’s right to decide they want someone else to take care of the problem for them. What our concern is, is that the law is being twisted by folks for whom it was never intended to benefit.”

Makris agrees — to a point — that some kind of regulation would be OK. “There should be some checks and balances put in place so repair companies can’t operate without any discretion,” he says. “It may be a good thing to have some more regulation here. I think it just needs to be fair, and what we had [in HB 1421] was not fair at all.”

Real Damage

Citizens Property Insurance Corp., the state’s insurer of last resort, has been especially impacted by Assignment of Benefits claims and litigation. It posted a $27.1 million net loss for 2016 — its first loss since 2005 and a loss that occurred in a year with minimal storm damage. Citizens officials attribute that loss to increases in AOBs and the percentage of non-weather-related water claims that move to litigation.

Also, a total of 8,097 new lawsuits were filed against Citizens between January and November 2016, a 30% increase from the same period in 2015. And while less than 15% of water-related claims resulted in litigation in 2011, nearly 50% did so in 2016. Those increases occurred even though Citizens’ policy count dropped 26.3% between January 2015 and November 2016.

http://www.businessobserverfl.com/section/detail/house-of-cards/

Appellate Court Says Ratings Firm and Regulators Did Not Violate Sunshine Law

May 10, 2017/in WorkCompCentral

Wednesday, May 10, 2017

Appellate Court Says Ratings Firm and Regulators Did Not Violate Sunshine Law

By J. Todd Foster

An appellate court on Tuesday reversed a trial court ruling that the National Council on Compensation Insurance and Florida regulators violated the state’s Sunshine Law when deliberating last year’s rate hike.

The 1st District Court of Appeal’s panel decision came down to the definition of the word “committee.” The court accepted NCCI’s contention that its actuary, Jay Rosen, singlehandedly arrived at the recommended rate increase.

The increase was allowed to go into effect Dec. 1 pending the appeal. More than three-quarters of the increase was due to a Florida Supreme Court decision in April 2016 that the state’s statutory fee formula for claimants’ attorneys was unconstitutional because it did not allow for reasonable fees in some cases.

Miami claimants’ attorney James Fee, a former defense lawyer and an owner of Druckman & Fee, sued NCCI and OIR, contending they violated Section 627.091 of Florida Statutes. That law provides that whenever a committee of a recognized rating organization with responsibility for workers’ compensation and employer’s liability insurance meets to discuss rates, it must do so in public under the state’s Sunshine Law, Section 286.011 of the Florida Statutes.

“Thus, under the plain and ordinary meaning of the terms ‘committee’ and ‘meet,’ Rosen, in his individual capacity, does not act or ‘meet’ as the statutory rate-determination committee contemplated by section 627.091(6),” Justice Lori S. Rowe wrote for the majority of the appellate panel.

Justices Susan L. Kelsey and Harvey L. Jay III concurred.

The opinion states that the Sunshine Law applies to formal and informal meetings only when two or more members of the same board or commission meet to discuss a matter on which action will be taken later.

“A ‘committee’ has been defined as a ‘subordinate group,’ not a single person,” Rowe wrote. “The plain language of the statute thus extends sunshine requirements only to rate filings; actions taken by OIR subsequent to receiving a rate filing (approval, disapproval or deviation); and appeals of OIR’s actions. The only portion of the statute that has any nexus to NCCI’s activities in this case is the rate filing itself.”

Until 1991, NCCI’s Classification and Rates Committee deliberated on recommended rate filings, but that panel disbanded 26 years ago for all of its state clients nationwide because of antitrust concerns.

NCCI provides advisory loss costs for 34 states and the District of Columbia and recommends full rates to regulators in Florida and three other states — Arizona, Idaho and Iowa. In Illinois and Indiana, NCCI provides recommendations for both loss costs and full rates.

Fee could not be reached for comment Tuesday. Maitland claimants’ attorney Geoff Bichler said he hopes Fee will appeal the reversal to the state Supreme Court.

“The decision today insulates NCCI from basic transparency that everyone should embrace in the rate-making process,” Bichler said. “The rate-making process is a critical component of the workers’ compensation system that affects every person in the state of Florida to some degree. When NCCI determines that a court decision requires a rate adjustment, and OIR uses that determination to approve a rate hike, the people have a right to know how that conclusion was reached.”

The court decision came one day after the Florida Legislature adjourned its 2017 session and failed to overhaul the workers’ compensation system over the business community’s concerns of rising costs related to the attorney fee issue.

David Langham, chief deputy judge of the Office of Judges of Compensation Claims, said the 1st DCA ruling was not surprising.

“I thought the characterization of one person as a committee was difficult,” Langham said. “If one person is a committee, then any person speaking with someone at the water cooler could be a Sunshine Law violation.”

Insurers applauded the ruling and said it was expected.

“It appears that this lawsuit was an attempt to divert attention away from needed workers’ compensation reform in Florida,” said Trey Gillespie, assistant vice president of workers’ compensation for the Property Casualty Insurers Association of America.

“NCCI is a private organization that was not created by a public entity and clearly is not a governmental body subject to the sunshine and public records laws. The evidence was very clear that NCCI did not utilize a rate-determination committee to finalize the filing with OIR,” he said.

The American Insurance Association said the trial court ruling, had it stood, would have meant that NCCI could never deliberate out of a public session.

“The Office of Insurance Regulation has always conducted their review of rate filings in a transparent and professional manner, and the opinion of the 1st DCA affirms that as well,” said Ron Jackson, AIA Southeast region vice president. “As the DCA’s opinion noted, the construction of the law placed upon it by the plaintiff, Mr. Fee, and the circuit court was an overbroad and incorrect application of the terms of the law.”

Coral Gables defense attorney H. George Kagan emailed that an appeal to the Supreme Court would be a long shot.

“While it was extremely important to those involved – each of whom having also fought the good fight it certainly seems – and while there was understandable curiosity, even suspicion, about the rate process, its ‘Gone with the Wind’ news now,” Kagan said.

Fee sued NCCI and OIR on Aug. 10. Leon County Circuit Judge Karen Gievers ruled Nov. 23 that “clear and convincing evidence” showed that NCCI and OIR held a series of illegal “secret” meetings that resulted in “shutting the public out of meaningful participation in the rate-making process.”

NCCI chief legal counsel Steve Sibner said in a telephone interview Tuesday that Florida has one of the most transparent rate-making processes in the country.

“We’re obviously pleased with the decision,” Sibner said. “I can tell you from my standpoint we always believed we and OIR were in compliance with Florida law.

“OIR has a public hearing each time we submit a filing. In this case, they conducted a public hearing that was four hours long. People had a chance to speak and to submit written comments for a long time afterwards. All of the documents submitted to the OIR were made public. There has been appropriate public scrutiny,” he said.

OIR issued only a brief statement: “We’re aware of the ruling and pleased by the outcome.”

The Florida Justice Reform Institute, a tort reform organization, applauded the appellate court’s reversal, saying there was no evidence NCCI used a committee as part of its actuarial analysis.

“NCCI used an actuary, and the actuarial work product was reviewed. Since there wasn’t a committee used as part of the actuarial analysis, there was not a public records violation,” said William Large, the institute’s president.

Florida Workers’ Advocates called the ruling disappointing and said it would have a “substantial impact” on Florida businesses and their workers.

“This decision underscores how important it is for the Legislature to stand up to the greedy insurance industry and establish a fair and transparent rate-making process that fosters competition,” Mark Touby, FWA’s president, said in an emailed statement. “With the next legislative session just eight months away, we look forward to working with the Senate and House to achieve this goal, which is so important to Florida’s economic future.”

NCCI’s original rate filing last summer was for a 19.6% increase, but the ratings firm pared it down to 14.5% after the OIR directed it to do so.

Ultimately a hike of 10.1% was needed, NCCI said, to cover the Supreme Court’s ruling in Castellanos v. Next Door Co. The high court found the attorney fee formula in Section 440.34 of the Florida Statutes unconstitutional as a violation of due process under both the state and U.S. constitutions because it made no allowances to ensure attorney fees would always be reasonable.

The state Supreme Court’s decision in Westphal v. City of St. Petersburg warranted another 2.2% increase, NCCI said. The court found in Westphal that the 104-week statutory limitation on temporary total disability benefits was unconstitutional and should revert to the 260-week limitation in effect before a 1994 law change.

Those two court decisions will cost employers $1.5 billion in the first year because of higher attorney fees and unfunded liabilities that will occur as claimants’ attorneys return to court to get their fees increased for old cases, NCCI says.

The remainder of the 14.5% rate hike was for updates to provider reimbursement manuals.

See Full Article

Reprinted courtesy of WorkCompCentral.

Time May Have Run Out for Work Comp Changes

May 5, 2017/in WorkCompCentral

Friday, May 5, 2017

By J. Todd Foster

After weeks of haggling and a last-minute flurry of amendments, the Senate had failed to vote late Thursday on attorney fee caps and other system changes that had been the legislative priority of the insurance and business industries.

At least one business advocate that time may have run out.

“It is my understanding comp reform is dead for this session,” said lobbyist William Large, president of the Florida Justice Reform Institute, whose self-avowed mission is to make it more difficult for trial lawyers to sue businesses.

The legislative session ends today, except for a Monday session to deal with budget items only.

“Technically nothing is really dead until sine die, but the prospects of workers’ compensation reform look remote,” Large said. “It’s an unfortunate development for the business community and citizens of Florida. Businesses and consumers will be forced to absorb increased workers’ compensation premiums as a result of the Legislature’s failure to act. There’s probably going to be a big rate filing in the fall, and premiums are only going to increase.”

As the Senate convened early Thursday, it appeared that the sponsor of the Senate reform bill had mostly acquiesced to the House version, filing an amendment that dropped his proposed hourly cap for claimants’ attorney fees from $250 to $200. That was still more, however, than the $150 ceiling contained in the House comp reform bill that passed 82-37 on April 19.

In his proposed amendment to House Bill 7085, Sen. Rob Bradley, R-Fleming Island, also omitted his original proposal to shift Florida from administered pricing to a loss-cost system.

Proposed amendments by Sens. Jeff Brandes, R-St. Petersburg, and Jose Javier Rodriguez, D-Miami, also had not reached the Senate floor as of this report’s deadline. They would have capped attorney fees at $150 and $225, respectively.

The lack of a Senate vote by Thursday evening spelled likely defeat for insurers and business interests that insisted on reforms following a 14.5% rate increase enacted Dec. 1 in response to two state Supreme Court rulings.

In one of the decisions, the high court ruled that Florida’s statutory fee formula for claimants’ attorneys was unconstitutional because it did not allow for reasonable fees. The decision in Marvin Castellanos v. Next Door Co. triggered more than two-thirds of the rate hike, which the National Council on Compensation Insurance estimates will raise system costs by $1.5 billion in the first year.

Labor groups and workers’ advocates were lukewarm on Bradley’s more attorney-friendly bill, SB 1582, but adamantly opposed an amendment he filed late Wednesday dropping the hourly attorney fee cap to $200, and to the House bill that passed two weeks ago.

Even with the 14.5% rate increase, they say Florida’s premiums have dropped nearly 50% since 2003 reforms eroded some wage and medical benefits for workers.

Miami claimants’ attorney Mark Touby, who represented Castellanos, said he hoped workers’ comp reform was dead for this session.

“The Bradley amendment to the House bill is the insurance company’s bill,” he said. “It doesn’t do comprehensive workers’ compensation reform. It’s not about the dollar amount of the fee. There is no competitive rate-making, no benefits to injured workers, nothing in the amendment that in any way stabilizes the marketplace.

“This is just bad for business and bad for workers,” Touby said.

If the Senate, working late into the night Thursday, were to pass HB 7085 with Bradley’s amendment, the bill would have to go back to the House today with mere hours left in the session.

“As time passes, there’s a question of when and if the bill is called up. We certainly don’t know,” said Ron Jackson, Southeast region vice president for the American Insurance Association. Jackson has spent most of the week camped out at the statehouse in anticipation of a comp reform bill vote.

“AIA believes the best response to the Castellanos decision would be providing for claimant-paid attorney fees as done in the majority of the states,” Jackson said. “Obviously at this time, neither the Senate nor the House were willing to move in that direction.”

Bradley’s amendment to HB 7085 not only would have increased the hourly fee for claimants’ attorneys by $50, it would have changed the circumstances under which judges of compensation could have departed from the statutory fee schedule: 20% of the first $5,000 of benefits secured on behalf of the injured worker; 15% of the next $5,000; 10% of the remaining benefits secured for the claimant; and 5% of the benefits secured after 10 years.

The Bradley amendment would allow judges to depart upward or downward from the fee schedule if the fee it produced were less than 60%, or greater than 125%, of customary claimants’ attorney fees.

HB 7085, which would cap hourly fees at $150, would allow an upward departure from the formula if the fee were less than 40% of an attorney’s customary fee.

NCCI said in its estimate of the original HB 7085, which capped claimants’ attorney fees at $250 an hour, that it would lower system costs by at least 5%, or a minimum of $182 million a year. About 60% of that, $110 million, would be attributed to capping hourly attorney fees at $250, the ratings organization said.

It did not evaluate the savings after bill sponsor Rep. Danny Burgess, R-Zephyrhills, dropped the cap to $150 an hour.

Among its myriad reforms, HB 7085 includes provisions to:

o Make the injured worker responsible for remaining attorney fees if required by a retainer agreement.

o Allow carriers to reduce premiums by up to 5% if they disagree with the filings made by NCCI.

o Eliminate charge-based reimbursement of outpatient medical care in favor of reimbursement at 200% of the Medicare rate for unscheduled service, and 160% of the Medicare rate for scheduled surgeries.

o Require carriers to approve or deny requests for authorization by phone or in writing within three days of receiving the request. Current law simply requires them to “respond” within three days.

http://www.workcompcentral.com/news/article/id/064b37092675b61d66c7db2d6c7a8d1c29c084a0

Reprinted courtesy of WorkCompCentral.

Florida Senate Urged to Reform Attorney Fee Awards in Property Disputes

May 1, 2017/in Florida Business Daily

Florida Senate urged to reform attorney fee awards in property disputes
Florida Business Daily Reports | May 1, 2017

Supporters of a bill restructuring the way attorneys’ fees are awarded in some property disputes are urging the Florida Senate to tackle the issue.

HB 1421, relating to property insurance assignment agreements, passed last week 91-26 in the House and was referred Sunday to the Senate Banking and Insurance Committee.

The bill is designed to stop what supporters claim is abuse by contractors and attorneys of the assignments of benefits (AOB) system, which allows for a third party to put in a claim for services instead of an insured homeowner.

It is a good, sensible solution to the problem, said William Large of the Florida Justice Reform Institute, which campaigns on tort reform and other legal issues.

“We need to get the Senate to pass this bill,” Large told Florida Business Daily. “It needs to be fixed for the benefit of all citizens. Somebody is paying for this, and that somebody is the insured who are paying higher premiums.”

Contractors called to carry out repairs, particularly water damage, are accused of strong-arming panicked homeowners into signing an AOB form with promises they will deal with the insurance company.

But some contractors, it is claimed, will put in an inflated claim, often only slightly, which may be disputed by the insurance company. And under the one-way attorney fee system, all legal fees are paid by the insurer if the amount ultimately awarded is greater than the initial offer.

Under the bill, AOB still will be allowed, but the fee structure for attorneys will change. If the award is less than 25 percent more than the offer, the insurer gets the fee. If it is between 25 and 50 percent, neither side collects; if it’s over 50 percent, the attorney gets paid.

Florida’s insurance commissioner, David Altmaier, has called for reform, as have insurance companies, including Citizens, the state-run payer. All say the practice has resulted in soaring insurance premiums.

According to Altmaier, between 2010 and 2015, there was a 46 percent increase in water claims, a 28 percent increase in severity and a trebling of AOB agreements. AOB lawsuits increased from 405 in 2006 to 28,200 in 2016.

The bill also includes other provisions to introduce more transparency, including itemized estimates of work and allowing policyholders to rescind an agreement with a specified period of time.

https://flbusinessdaily.com/stories/511110296-florida-senate-urged-to-reform-attorney-fee-awards-in-property-disputes

Tampa Bay is ground-zero for assignment of benefits cases over broken auto glass

Close the loophole

‘Devastating’ bill

Real Damage

Appellate Court Says Ratings Firm and Regulators Did Not Violate Sunshine Law

Florida Justice Reform Institute

Site Links