Two pieces of legislation that could help reduce losses and litigation costs for insurance carriers are moving in the Florida Legislature: Litigation funding restrictions and changes to the state’s home-hardening program.
By a vote of 15-5, the Senate Fiscal Policy Committee this week approved Senate Bill 1276, which would require more disclosure by litigation financing firms and would bar them from influencing the outcome of cases. It was the second committee to pass the bill, meaning it will likely move to the Senate floor. A similar bill in the House of Representatives is pending in the Judiciary Committee.
The American Property Casualty Insurance Association has pushed for the changes and applauded the committee action. “SB 1276 is an important consumer protection bill that will bring transparency to a highly predatory industry,” APCIA Florida Vice President Logan McFaddin said in a statement.
Third-party financing of major lawsuits has become a top issue for insurers and corporations around the country, and a number of states have passed similar legislation designed to shine a light on who’s footing the bill. Under current Florida law, information about lenders and loan terms in Florida lawsuits can be found to a limited degree through the Florida Secured Transaction Registry. But that requires the names of parties involved and other information that may be difficult to obtain.
The International Legal Finance Association has said that recent concerns about litigation funding have been inaccurate and overblown. Existing law, court rules, and ethical guidelines already govern commercial legal finance, the group said in an email.
“Those rules ensure that clients maintain control of their cases and that their attorneys do not breach their duties of loyalty and confidentiality to their respective clients,” notes the email, from an ILFA spokesman. “Furthermore, various regulations apply to legal finance providers that are publicly traded companies or that offer other types of securities.”
A committee substitute for the bill specifies that it would not apply to non-profit organizations in some cases.
Also this week, the full Florida Senate passed SB 7028, which puts some guardrails on the popular My Safe Florida Home program. The program, which provides matching grants for wind mitigation efforts for homes, is expected to receive extra funding in the state budget this year.
The bill approved Wednesday would limit the $10,000-maximum grants to single-family, owner-occupied homes or townhouses; allows subsequent applications only when initial applications were denied due to errors or omissions, or when the homeowner believes the structure is now eligible after revisions; requires that homeowners provide the name and license number of the contractor hired to do the work; specifies that improvements must be limited to those identified in inspections; and expands the improvements to include garage doors and skylights.
In addition, “the homeowner must agree to provide … information received from the homeowner’s insurer identifying the discounts realized by the homeowner because of the mitigation improvements funded through the program,” the bill reads.
The bill was sponsored by Sen. Jim Boyd, chair of the Senate Banking and Insurance Committee and an insurance agency owner. Florida’s Chief Financial Officer, Jimmy Patronis, whose department oversees the program, said in a statement that the changes would improve the functionality of the program and would ensure that homeowners that need the program the most are able to utilize its benefits.
Another bill, SB 1366, would expand the fortification program to include condominiums. That bill passed the Senate Banking and Insurance Committee earlier this week.
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