Insurance News: Everything you need to know about the new Senate Bill2-A

Let’s delve into the details of Senate Bill 2-A in Florida and its key reforms aimed at
addressing challenges in the state’s home insurance market:

Claims Filing Deadline:
● Previous Regulation: The bill reduces the deadline for filing new or
reopened insurance claims from two years to one year, and for
supplemental claims from three years to 18 months.
● Impact: This change intends to expedite the claims process and reduce
the timeframe within which claims can be filed. Shortening the filing
period aims to streamline the resolution of claims, providing a quicker
response to policyholders and potentially mitigating fraudulent or delayed
claims.

Resolution of Claims:
● Previous Regulation: Insurance companies are now required to
acknowledge, investigate, and pay out claims more quickly.
● Impact: Accelerating the claims resolution process ensures that
policyholders receive timely assistance in the aftermath of incidents. This
provision aims to address concerns about extended delays in processing
claims, offering a more efficient and responsive claims handling system.

Notice for Policy Cancellations:
● Previous Regulation: Insolvent insurance companies must give a 45-day
notice to policyholders before canceling policies, an increase from the
previous 30-day requirement.
● Impact: Extending the notice period for policy cancellations provides
policyholders with more time to find alternative coverage. This change
aims to protect consumers from abrupt policy cancellations due to insurer
insolvency, giving them additional time to make informed decisions about
their insurance needs.

One-way Attorney Fees and Assignment of Benefits (AOB):
● Previous Regulation: The bill repeals one-way attorney fees and prohibits
AOB agreements. This aims to prevent abuse of the system and ensures
policyholders retain full control of their claims.
● Impact: By repealing one-way attorney fees and restricting AOB
agreements, the legislation seeks to curb potential abuse and
manipulation of the claims process. Policyholders maintain greater control over their claims, and the intent is to reduce unnecessary litigation
and associated costs.

Lawsuit Restrictions:
● Previous Regulation: Policyholders are no longer permitted to sue their
insurance company unless a breach of contract is found, which is
intended to reduce fraudulent or frivolous lawsuits.
● Impact: Restricting lawsuits to cases involving a breach of contract aims
to discourage frivolous or unfounded legal actions against insurers. This
measure is designed to streamline legal processes and focus litigation on
legitimate disputes over contractual obligations.

Citizens’ Insurance Corp. Reforms:
● Changes: Changes to Citizens’ Insurance Corp. aim to revert it back to its
original purpose as a last-resort insurer.
● Impact: The reform of Citizens’ Insurance Corp. seeks to refocus its role
as a last-resort insurer, potentially reducing its market share and
encouraging more private insurers to participate in the market. This shift
is intended to promote a healthier and more competitive insurance
marketplace.

Florida Optional Reinsurance Assistance (FORA) Program:
● Introduction: The bill establishes FORA to help insurance companies
purchase hurricane reinsurance at reasonable rates, potentially reducing
the cost passed on to policyholders.
● Impact: By creating the FORA program, the legislation aims to make
reinsurance more accessible and affordable for insurance companies,
which could lead to lower reinsurance costs. This, in turn, may help
stabilize insurance premiums for policyholders, particularly in the face of
hurricane-related risks.

In summary, Senate Bill 2-A encompasses a comprehensive set of reforms addressing various aspects of the home insurance market in Florida. The goal is to tackle issues such as excessive litigation, fraudulent claims, and high insurance premiums, ultimately seeking to stabilize and strengthen the state’s home insurance market. If you have any questions or concerns, please reach out to our team and we would be happy to go over this with you.