With the Florida Legislature holding a special session on insurance reform next week, state CFO Jimmy Patronis offered five proposals for consideration.
“As area policyholders know, Florida’s insurance market is in trouble. We are seeing more private carriers exit the market, and we’re seeing Citizens Insurance policies grow. Governor DeSantis has rightly called a special session to reform insurance, and lawmakers will have an opportunity to curb frivolous litigation and fight fraud. Florida communities are under attack by fraudsters who are willing to try anything to game the system. They are stealing from us all! To win this war, we need the troops, the weapons, and a full commitment to the mission. So in this special session, I will put forward five initiatives aimed at cracking down on the kind of fraud that increases all of our rates,” Patronis said.
Insurance Consumer Advocate Tasha Carter also weighed in.
“Insurance fraud in any form is a threat to market stability and impacts each and every Floridian. Insurance companies pass on the cost of fraud to consumers, which is evident in the multiple double-digit rate increases we’ve seen in Florida. To curb insurance fraud, we need targeted legislative measures that directly address the root cause and bad actors involved. The anti-fraud initiatives put forth by CFO Patronis are just that and I am in full support. Florida’s insurance consumers will ultimately benefit from these meaningful changes,” Carter said.
The first proposal for the upcoming session is to standup three Anti-Fraud Homeowner Squads. These three squads will be in addition to the two I-4 Corridor teams that were stood up last year. To standup the squads, the Department of Financial Services (DFS) will request 23 new positions, including
• Fifteen detectives and three supervisors to work cases;
• Three attorneys, and one administrator, to prosecute cases; and
• One analyst to help expedite investigations.
The three teams would cover Jacksonville, Fort Lauderdale and Miami.
“We need teams that live-and-breathe property and casualty fraud, and we need to give state attorneys good cases, so that we can accelerate the pace at which these fraudsters are sent to jail. By placing these new teams in areas with lots of fraud, we’ll not only hold criminals accountable, but we’ll provide even more deterrence and potential savings to homeowners through lower premiums,” Patronis said.
The second initiative would create a $3 million anti-fraud and public education campaign. In many instances, policyholders do not understand that they are signing their rights away or that litigation will only slow down their claims and could result in liens on their property.
“Fraudsters need to know that if they break the law, they’re going to jail. For the level of fraud occurring in Florida communities, we really need a well-funded public education campaign to combat these complex fraud cases,” said Patronis.
Patronis’ third initiative proposes to amend Florida’s False Claims Act to allow whistle blowers to recover damages in Qui-Tam cases. Qui-Tam cases are where the general public can file whistleblower complaints over fraud cases, without necessarily being the victim, or as part of the fraud taking place. This reporting mechanism will incentivize the public, financially, to come forward and report fraud. The Qui-Tam proposal dovetails with Patronis’ fourth proposal to provide awards for calls to the “Florida Fraud Fighter Reward” tip line. Current law issues awards only when there is a conviction. The proposal lowers the standard, from conviction to arrest, for tipsters to qualify for the $25,000 anti-fraud program to get more participation.
The fifth proposal would make changes to Assignment of Benefits (AOBs) law, including banning the bundling of AOBs.
“Much of fraud, and abuse, of the legal system started with a policyholder signing an AOB. We cannot allow law firms, or public adjusters, to get in the business of bundling AOBs and selling them for profit like a security. I want to deter a ‘feeding frenzy’ of bad actors from going after consumers to sell AOBs on the open market. We need to stop this practice in its tracks, and this session we will work with the Legislature to ban them,” Patronis said.
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