Improving legal or regulatory landscapes often requires a careful survey. Who wants to change? What change do they want? And, the always elusive political query… who is willing to go on the record one way or the other?
Such is the case with Florida’s statutory cap on public adjuster fee’s. Currently at 20% for non-catastrophic claims, it is the highest in America. Ground usually fertile for consumer advocacy. Florida claimants often pay twice that of “some” other states, for essentially the same work or result. (See NOTE #1)
During 2013 negotiations on repealing Citizens 10% fee cap, a group including lobbyists from some public adjuster and insurer communities agreed to reduce the non-Citizens cap from 20% to 15%. Still among the nation’s highest and several points above the 12.5% pushed in post-Sandy New Jersey by public adjusters, it’s a monumental leap in the right direction.
Last year’s agreement is exhumed in this year’s HB-743, by Rep. Hood (R-Daytona). It’s an omnibus insurance vehicle which like last year may arrive without its’ cargo. Elections loom. Saving consumers money may have to wait.
Forgetting, for now, whether or not the reduction will also reduce costs by curtailing fraud or abuse (it clearly reduces consumer PA fee’s by 25%), I endeavored to find out where advocates and advocate groups may stand on the narrow issue:
“Lowering the statutory cap on non-catastrophic losses charged by public adjusters from 20% to 15%.”
The most telling revelation is not who supports the proposal–both consumer advocates and public adjusters. But who, despite their declared public purpose as consumer advocates, cannot say they do.
The envelope please!
- The National Association of Public Insurance Adjusters (NAPIA) formally endorses the fee reduction. I assume for the same reason they did so in New Jersey–a higher percentage motivates bad behavior that harms consumers. This is consistent with its pro-consumer stance in other states generally. However, NAPIA has been accepting of 10% in some instances. (See NOTE #2 below)
- The Council of Property Claim Professionals Inc. (CPCP), an austere group of past presidents of the Florida Association of Public Insurance Adjusters also favors the reduction in consumer fee’s to 15%. (See NOTE #3 below).
- Steve Burgess, the state Insurance Consumer Advocate (ICA) also favors the fee cap reduction to 15%. He is to be congratulated for stepping up to the plate for consumers. He did so with simple clarity of purpose, in my opinion. That is: he’s an advocate for consumers and this fee change would reduce fee’s for consumers by 25%.
- The only group I contacted that “opposed” the reduction was the Florida Association of Public Insurance Adjusters (FAPIA). I’m thankful for their willingness to respond. But, to be honest, their presidents letter was more like an angry manifesto against insurers than a reasoned address of the issue and was in stark contrast to other PA groups in this regard.
Now, here are those who inexplicably, and in complete conflict with their declared goals, simply would not take a stand.
- First, I polled candidates in the district 61 house race because it’s the open seat Sean Shaw is running for. As the former state consumer advocate on insurance matters he would’ve helped consumers if/when they had an issue with public adjuster fees. His opponents may have needed to look into the issue which is understandable. Shaw, on the other hand, appears so tied to the PA & trial bar communities he can’t fend for consumers on this issue anymore. His boss, Chip Merlin (who wouldn’t respond either) is a founder of FAPIA. Shaw is a dues paying member of NAPIA, FAPIA and AAPIA and his list of campaign contributors reads like the “who’s who” of trial lawyers & public adjusters. How will he explain his refusal to support a 25% reduction in fees to the alleged “8 million” consumers of his Policyholders of Florida(POF). Maybe this is why Sunshine State News calls Sean Shaw a “wolf in sheep’s clothing” and urges district 61 residents to vote for “Anybody but Sean Shaw”. (See NOTE #4 below)
- The Florida Association for Insurance Reform (FAIR). I spoke with director, Jay Neal, who heads up what I believe to be an open minded consumer group with a diverse and well intentioned board. He wouldn’t take a position. I’ve found that Mr. Neal is usually willing to look at the bigger, longer term, picture, even rise above politics but, he apparently did not have clearance from his board to do so in this case.
- Fair Insurance Rates for Monroe (FIRM). A narrowly focused group formed to handle property insurance issues in Monroe County, mostly Homeowner premiums in Citizens. Did not respond to my one email and I didn’t pursue it further.
- American Association of Public Insurance Adjusters (AAPIA). Members are smaller firms and/or those that handle smaller claims. After stating several times he’d get back to me it became apparent that Executive Director, Gene Veeno, was not going to do so. Traditionally AAPIA favors higher caps, if any at all, so that smaller claims can be cost-effective for his members to pursue. For example, AAPIA opposed the 12.5% across the board cap in New Jersey for this reason but, apparently isn’t willing to go on the record in opposition to 15% in Florida.
- Finally, most disappointing for consumers (albeit not surprising to me), is the Florida Consumer Action Network (FCAN). Bill Newton not only refused to support the fee cut, but when I asked him why, curtly responded: “Come on Scott, ease up a bit. I don’t do public adjuster stuff”. How convenient! This proves my long held belief that FCAN is not a consumer group but a fronting organization for trial lawyers and, by proxy, for public adjusters.
More to come.
NOTE #1: only fourteen states have any PA fee caps. Usually the result of a Florida-like climate (political, legal or environmental), these states are a mixed bag of PA regulations–some don’t license public adjusters, some label the enterprise itself as the unauthorized practice of law and at least one declares PA fee’s based on a percentage of the claim amount to be “against public policy.”
NOTE #2: See my blog “NAPIA Responds“. NAPIA’s legislative blog states the following position on fee caps:
We do not advocate or lobby for fee caps. However, when caps are presented as a requirement by a state DOI or legislature, we accept them and work with regulators and legislators to assure that they are fair and reasonable to the profession and the consumer. For instance, when licensing was enacted in Mississippi post Katrina, the proposed legislative and DOI requirement was a 7 per cent fee cap. NAPIA worked with regulators in Mississippi to consider a higher cap, which ended up at 10 per cent. This is consistent with what we are doing now in other states.”
NOTE #3: In responding to my request Raymond Altieri, Jr., CPPA stated the following on behalf of CPCP:
The insurance industry has decided to continue its pursuit of last year’s agreed upon fee cap language. As honorable participants in seeking a healthy and viable property insurance industry for the State of Florida, our group stands behind the agreement and should be considered by all to be trustworthy partners in that endeavor. To that end, we have formed the Council of Property Claim Professionals Inc.
The founding members of the Council have been active in supporting rational and reasonable public adjusting regulations in Florida since 1993. By the formation of the Council, we look to continue our work in Tallahassee. The Council intends to perpetuate ethical, professional conduct of public adjusters, while preserving the industry for decades to come in serving policyholders throughout Florida.
NOTE #4: In her article exposing how millions flow to Shaw’s employer, The Merlin Law Group, due to a practice called “hammering”, Nancy Smith succinctly states what Shaw’s refusal to answer my simple question seems to confirm…“Ultimately, Shaw’s sole motivation is not to protect the consumer but to appease his political benefactors and to ensure that costly, and profitable, litigation continues.”
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