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Florida’s assignment of benefits crisis

Runaway litigation in Florida's insurance market, driven by abuse of assignment of benefits (AOB) laws, is increasing legal costs and leading to higher premiums for consumers.

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Florida’s assignment of benefits crisis

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  1. Florida’s assignment of benefits crisis Runaway litigation is spreading, and consumers are paying the price James Lynch, FCAS MAAA, Chief Actuary Insurance Information Institute  110 William Street  New York, NY 10038 212.346.5533  jamesl@iii.org  www.iii.org

  2. Florida’s legal environment drives abuse Source: Florida Department of Financial Services Service of Process Database, Insurance Information Institute. One-way attorney’s fee statute No insurer consent needed AOB lawsuits are increasing If plaintiff wins lawsuit, insurer pays their attorney’s fees – but if plaintiff loses, they don’t pay insurer’s fees Insureds can assign their benefits to a third-party without insurer consent or knowledge

  3. The abuse is spreading across Florida *Miami-Dade, Broward, and Palm Beach Counties. **Pinellas, Hillsborough, Orange, Volusia, Osceola, Polk and Seminole Counties. Source: Florida Department of Financial Services Service of Process Database, Insurance Information Institute.

  4. AOB abuse and impacts on PIP legal costs The cost of settling claims grew in Florida, but subsided after legislative reforms. Source: NAIC data, sourced from S&P Global Market Intelligence, Insurance Information Institute. PIP reforms take effect Impacts of reform appear on insurer balance sheets

  5. No-fault AOB lawsuits are ticking back up We can expect legal costs – and premiums – to increase soon Source: Florida Department of Financial Services Service of Process Database, Insurance Information Institute.

  6. AOB abuse increases – and spreads beyond South Florida *Miami-Dade, Broward, and Palm Beach Counties. Source: Florida Department of Financial Services Service of Process Database, Insurance Information Institute.

  7. Abuse spread to auto glass virtually overnight Source: Florida Department of Financial Services Service of Process Database, Insurance Information Institute.

  8. Has the problem been addressed? *Pinellas, Hillsborough, Orange, Volusia, Osceola, Polk and Seminole Counties. Source: Florida Department of Financial Services Service of Process Database, Insurance Information Institute.

  9. Is auto glass abuse impacting legal costs? Source: NAIC data, sourced from S&P Global Market Intelligence, Insurance Information Institute.

  10. Thank you! www.iii.org

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