Senate, House line up on ‘assignment of benefits' overhaul

TALLAHASSEE, Fla. – After years of debate about the issue, a Senate committee Wednesday approved a bill that the sponsor said represents an agreement with the House on the controversial insurance practice known as assignment of benefits.

The Senate Rules Committee approved the bill (SB 122), sponsored by Sen. Doug Broxson, R-Gulf Breeze, after backing an amendment with major changes that line up with the House version.

Assignment of benefits, or AOB, is a decades-old practice in which policyholders sign over claims to contractors, who then pursue payment from insurance companies for work.

Legislative fights began largely because of residential water-damage claims, with insurers arguing that AOB has become riddled with fraud and litigation -- driving up premiums.

Plaintiffs’ attorneys and many home-repair firms contend assignment of benefits helps ensure that insurers properly pay claims.

The revamped Senate bill, which is now ready to go to the full Senate, includes limiting attorney fees in AOB disputes and allowing insurers to offer potentially lower-priced policies that would not allow assignment of benefits -- proposals that mirror a bill (HB 7065) passed last week by the full House.

Insurance and business groups and Insurance Commissioner David Altmaier praised the Senate committee for backing the changes Wednesday.

“Year after year we have watched the AOB crisis negatively impact our consumers -- many of which are recovering from hurricanes,” Altmaier said in a statement. “Now, more than ever, is the time to pass meaningful reform so we can protect consumers and start recovering from years of compounding abuse.”

But opponents said the bill does not guarantee that customers of private insurers will see lower premiums and that it would hurt many repair businesses.

“The proposed AOB legislation will negatively impact Florida’s small independent restoration contractors, while further confusing homeowners with the option of two policies,” Amanda Prater, a spokeswoman for the Restoration Association of Florida, said in a statement. “Not only will today’s decision cost Florida hundreds of jobs and put small businesses out of work, but it also encourages a tricky system designed to lead homeowners away from quality repair contractors and into the vicious cycle of the insurance companies who continue to deny, delay and underpay claims.”