AOB… Lawmakers need to solve the problem!

Someone’s been brewing the stew.  Since lawmakers came to town nearly 70 articles and/or editorials favorable to reforming Assignment of Benefits (AOB) have appeared in the mainstream.  Recently, others have popped up including radio ads, YouTube video’s and more.

And, they all blame the abuse on 3rd party vendors and their trial attorneys.

Furthermore, many specifically mention Senator Dorothy Hukill’s necessary fix, SB-1038, which includes returning the one-way attorney fee provision (Fs-627.428) to the homeowners who need it, and away from the for-profit entities and trial lawyers who hijacked it for themselves.

It’s extremely rare that all insurance regulators agree on anything.  But, AOB makes it easy.

Check out Insurance Commissioner David Altmaier’s committee presentations on the OIR’s new webpage—devoted exclusively to supporting AOB reform and providing links to at least 30 of the articles and editorials referenced above.  Most importantly it also specifically mentions the commissioner’s support for legislation “addressing attorney fees”.  So, too, did Commissioner Altmaier’s presentation to the Senate Banking and Insurance Committee.

Then there’s what Florida’s Insurance Consumer Advocate (ICA) thinks about the problem. Her testimony, her consumer warnings, her statewide workshops and her home page have all consistently indicated the need for attorney fee reform.

CFO Atwater agrees as well.

That makes three state insurance regulators arm-in-arm–on both the need for reform and the need to address attorney fees.

There’s more.  The recent announcement that Florida’s insurer of last resort, Citizens, after almost 11 years of profitable operation lost $27.1 million in 2016.   Why?  Water losses, AOB and litigation costs.

Citizens data is irrefutable. Board chairman Chris Gardner said “every year, we rely on standardized, accepted actuarial principles to set our rates… Last year, the same principles that provided rate decrease to our customers in recent years translated into hikes for 84% of our policyholders.  Without legislative changes, that trend will continue.”

And, Citizens press release specifically references Senator Dorothy Hukill’s’ bill SB-1038 as the solution.

In fact, everyone I’ve spoken to (and, I do mean everyone) agrees that AOB reform must address the engine of abuse—Fs 627.428, Florida’s one way attorney fee statute.  Because without it, one way or the other, the abuse reignites once lawmaker’s go home.

That’s why it’s so disappointing to hear that the Chairman of the Senate Banking & Insurance Committee, Senator Anitere Flores (R-Miami) partnered with the former president of the trial lawyer’s lobbying group (The Florida Justice Association) in favor of legislation that ignores the attorney fee fix.   Heck, even legislation in the house (HB-1421) designed to flush out a compromise doesn’t do that.

The Wall Street Journal pulled no punches excoriating committee chair Flores for her stand which has not only allowed SB-1038 to languish in her committee but, caused Senator Farmer’s bill to continue on its merry way.

You can watch the vote and debate on Senator Farmer’s bill SB-1684 here .

Did I fail to mention that his bill eliminates attorney fees paid by insurance companies from being included in their rates—a cute idea opposed by both the Insurance Consumer Advocate and Insurance Commissioner David Altmaier?

Don’t let me influence you on this. Read the Journal’s opinion on Senator Flores here, and Senator Flores’ opinion of the Journal’s opinion here.   Do your own research, then decide.

The Journal, whether you agree or not, is quite clearly telling Florida homeowners who’s to blame “…when they open their next insurance bill.” 

And, Commissioner Altmaier’s new webpage is quite clear telling homeowners how much of a premium increase Senator Flores’ may be responsible for.   A quick glance reveals some of the worst hit families to be those with smaller homes in Senator Flores’ own district.

According to the OIR, a Miami-Dade homeowner with a $150,000 home is paying an annual premium of $2,732.  That’s today.  In just five years, without the needed reforms, that premium will be a devastating $4,441.60.  (See OIR’s 5-year rate projections, here).

Almost a doubling of premiums would certainly be a “Category 5” for Flores’ constituents.  And, who knows what those premiums would be if Senator Farmers bill were to pass?

I’ve said it before.  This is the worst crisis in my 40 years of dealing with just about every type of insurance crisis.

All of Florida’s insurance regulators agree that AOB needs to be reformed.  All the state sponsored studies remain unrefuted.  The state’s non-profit insurer affirms that attorney fees are the culprit.

Everyone I’ve talked to (and, I do mean everyone), agrees.

Now it’s time for lawmakers to agree, and to… “SOLVE THE PROBLEM!”


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  1. As one good Senator told me… “This won’t get fixed for the next 2 years, but it will get fixed the year after”. Sad state we’re in…

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