Florida Chamber meeting in Miami to take on state’s insurance woes

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With the Legislature poised to confront major challenges to Florida’s insurance industry and the businesses and consumers who rely on it, the Florida Chamber of Commerce will convene in Miami Thursday to map out possible solutions.

On the agenda are mandatory personal-injury protection, or PIP, coverage for motorists; abuse of assignment-of-benefits agreements in property insurance; and finding a way to rein in rising workers’ compensation insurance costs.

Chief Financial Officer Jeff Atwater will review the overall landscape, and Insurance Commissioner David Altmaier will participate in a panel discussion outlining the perspectives of regulators and the regulated.

These issues are central to “our focus on creating jobs and economic opportunity,” the Chamber said in written statement.

“It’s important to address issues in Florida’s insurance industry that cost families and businesses money and make it harder for Florida to compete,” the Chamber continued.

“The Florida Chamber of Commerce’s annual Insurance Summit will attract hundreds of insurance officials, policy makers and business professionals from across the state to discuss how we can secure the future of Florida’s insurance industry.”

Attendees will also include Bryon Ehrhart, global head of strategic growth and development for Aon; Robert McClure, president and CEO of the James Madison Institute; Miami-Dade County State Attorney Katherine Fernandez RundleBarry Gilway, CEO of Citizens Property Insurance Corp.; and Richard Knabb, director of the National Hurricane Center.

Sen. Jeff Brandes, a St. Petersburg Republican, will also attend. He is among the lawmakers pushing for repeal of mandatory PIP — which, a study released in September suggested — could save drivers an average $81 per car.

However, consumers could end up paying more for other lines of coverage.

PIP coverage is considered ripe for fraud, especially in South Florida.

Belinda Miller, chief of staff in the Office of Insurance Regulation, will lay out the situation on Friday.

Cracking down on abuse of assignment of benefits, or AOB, agreements is the top legislative priority this year for Citizens Insurance, Florida’s insurer of last resort. It’s the topic of two panel discussions in Miami, centering on who’s to blame and what can be done.

AOBs are contracts through which policyholders sign away their rights in exchange for quicker repairs. But unscrupulous contractors can use them to inflate claims. And when insurers balk at paying, they can file lawsuits, further inflating costs.

Moreover, contractors can slap liens on homeowners to recover expenses insurers refuse to pay.

Gilway has blamed these contracts for a 6.4 percent increase in homeowners’ policies approved by state regulators in September.

At present, 45 percent of Citizens claims wind up in litigation, a trend largely driven by AOB abuse, Gilway said. Moreover, the trend is slowing Citizens’ efforts to move policyholders to private insurers.

Recent hearings before the House Insurance & Banking Subcommittee suggested the solution may involve increased regulation of home repair contractors but perhaps not changing Florida’s attorney fee statute to discourage abusive lawsuits.

The Chamber has formed a task force to confront rising workers’ compensation rates. Altmaier’s office approved a 14.5 percent increase that began to take effect in December, and business leaders fear coverage could fast become unaffordable, eroding the state’s economic competitiveness.

Insurance and business interests attach most of the blame to Florida Supreme Court rulings striking down limits on attorney fees and total disability benefits.

The Supreme Court found that the system, which requires injured workers to give up their right to sue in court in exchange for guarantees health care and lost wages, has become stacked in favor of employers and insurers.

A recent state Division of Workers’ Compensation survey found that nearly 66 percent of system stakeholders disagreed or strongly disagreed that the system strikes the right balance between workers and employers.

“It raised a lot of questions. The purpose of the grand bargain is to get the workers better and get them back to work,” said Danny Burgess, chairman of the House insurance and banking panel.

Knabb will participate in a discussion of hurricane modeling, forecasting, and recovery with Lorilee Medders, director of the Florida Catastrophic Storm Risk Management Center, and Bryan Koon, director of the state Division of Emergency Management.

Additional topics include the Florida Hurricane Catastrophe Fund; flood insurance; and “how errant regulation hurts Florida.”

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Michael Moline is a former assistant managing editor of The National Law Journal and managing editor of the San Francisco Daily Journal. Previously, he reported on politics and the courts in Tallahassee for United Press International. He is a graduate of Florida State University, where he served as editor of the Florida Flambeau. His family’s roots in Jackson County date back many generations.