Altering Adjusters’ Reports a No-No Under Florida Insurer Accountability Bill

As trial lawyers and news reports around the state continue to criticize Florida lawmakers for the far-reaching tort-reform passed last month, the Senate Banking and Insurance Committee has approved a bill designed to bring more accountability for property insurers.

By a vote of 8-0, the committee on Wednesday adopted Senate Bill 7052, dubbed the “Insurer Accountability Act.” If signed into law, the multi-faceted measure would require many new rules for insurers. Notably, it would prohibit insurers from altering or amending an adjuster’s report without including a list of changes, who made the change, and an explanation of a change that reduces coverage, according to a staff analysis of the bill.

That practice has come under fire from some independent adjusters, who have said that some carriers and insurer-hired adjusting firms have doctored their damage assessments, drastically reducing the amount of wind damage but leaving the adjusters’ names on the reports. State regulators are said to be investigating the alleged fraud.

SB 7052 also would bar payment of bonuses to officers and directors while an insurer is impaired or insolvent. That’s something that Florida news reports have highlighted after recent insolvencies.

The bill, drafted by the committee that’s chaired by Sen. Jim Boyd, R-Bradenton, also would require Citizens Property Insurance Corp. to cover property with open claims that are being handled by the Florida Insurance Guaranty Association after an insurer insolvency, according to a staff analysis of the bill. That type of action has been followed to some extent in recent years, although the Office of Insurance Regulation has been criticized for allowing one primary market insurer, Slide Insurance, to assume thousands of policies held by insurers in runoff or facing liquidation.

Other provisions would:

The bill’s full text can be seen here. A video recording of the committee meeting is here. The measure has at least two more stops in the Senate before reaching the floor. A companion bill in the House of Representatives has yet to be introduced. The legislative session runs until the first week of May.

Top photo: Citizens Property Insurance CEO Tim Cerio at the Senate committee hearing Wednesday. (The Florida Channel)