The Florida House Commerce Committee gave its approval to legislation to reform assignment of benefits, passing the bill on a vote of 21-to-7.
The bill would enact a complicated formula based on the level of the settlement offer versus the actual settlement offer to determine recoverable costs for contractors holding AOBs.
Under the legislation, an insurer could be entitled to attorneys’ fees even if a contractor who provides service to a homeowner under an assignment of benefit wins a judgment that is greater than the insurers initial payment offer, if it falls below a threshold.
Committee members rebuffed an attempt by Rep. Joe Geller, of Dania Beach, to codify the proposal for settlement language in the legislation with current rules of procedure. Still, the bill sponsor acknowledged the proposal still needs more work.
The Florida Justice Association spoke in opposition to the legislation.
“Why does the FJA get involved in these issues? Because in the 05 and 04 hurricanes and storms, homeowners and condo owners weren’t getting their claims paid. So, we got involved to help them and for the last 12 or 13 years we’ve been involved, hopefully, for good rate setting on the front end and good claims handling on the back end,” said Reggie Garcia with the FJA. “Let’s paint a picture of the homeowners who call these fine men and women in the work shirts, who come to their home in the middle of the night, fix their home, dry it out, and submit a bill. Then the question is, ‘When does that get paid? Who pays it? What is the amount?’ I believe that is everyone’s goal is for legitimate claims to be paid promptly.”
Garcia told committee members the FJA is in favor of reasonable licensure, insurance and bonding, a reasonable notice provision, and a reasonable rescission provision. He noted how there had been a “robust” level of discussion regarding determining the appropriate level of regulation on small businesses in regard to AOBs.
“This bill contains the word ‘must’ 15 times in a ten-page bill,” said Garcia. “Those new duties, requirements and restrictions, with the exception of a couple of them, are imposed on the men and women in the colored shirts who do this work for you and your constituents.”
Representatives of independent contractors who provide service to homeowners when they are hit by a crisis brought attention to a provision in the bill calling on contractors to submit to examinations under oath.
“We do have some concerns about several provisions in the bill. We’d love to talk about examinations under oath, which is an area where we have some concerns and the burden that would place on small business owners,” said Foyt Ralston, representing the Florida Association of Restoration Specialists.
The legislation now moves to the House calendar.