Florida Supreme Court workgroup weighs-in
There’s general agreement that excessive litigation and contractor fraud have been driving factors in Florida’s property insurance market peril. State insurance regulators, the Florida Supreme Court, and the Insurance Information Institute have attempted to get a handle on the excessive litigation component and we have developments to report from all three in this week’s Property Insurance News update.
Claims Litigation Reporting Form: This is the new form that will be required from insurance companies by the Florida Office of Insurance Regulation (OIR), who has been trying to fine-tune it as part of a new yearly data call required under SB 76, the Florida Legislature’s 2021 reforms. The goal is to add more transparency to the true distribution of claims dollars (damages vs. attorney fees). But it’s a Catch-22 as William Rabb of the Insurance Journal recently reported, as many times a plaintiff’s counsel simply refuses to provide the information. OIR heard this from industry reps at its last hearing in July as the form “leaves no clear alternative if the amount is unknown,” reports Rabb, another great writer who covers our industry well. Since the article, OIR revised the form’s effective date but made no apparent substantive changes in the latest version.
Florida Supreme Court Weighs-In: Insurance consultant Scott Johnson in his latest blog reports that the Florida Supreme Court has released its working group report on Sanctions for Vexatious and Sham Litigation. The report was in response to a request by Senator Doug Broxson (R-Pensacola), an insurance agent & Vice-Chair of this year’s Senate Banking and Insurance Committee to look into questionable lawyer behavior, especially given the volume of lawsuits filed by certain law firms. The workgroup concluded that there are “a multitude of tools that may be used by judges, litigants, and attorneys to address improper litigation,” but are scattered throughout the rules and law. It recommends an educational program be developed to inform judges, court staff, and attorneys on available remedies. There are other recommendations you can read in the report’s executive summary on page 4, including potential action for the Florida Legislature to consider, such as expanding provisions of current law “to address a wider population of vexatious litigants.”
Third-party Litigation Funding Feeding Claim Inflation: The Insurance Information Institute (III) is out with a new report showing how third-party funding of lawsuits is enabling more lengthy litigation, making insurance coverage more expensive for all policyholders. Recipients can be people or corporations. They may use the money to cover personal or medical expenses, attorney and court-related fees, explore riskier legal strategies, and pay for an expert witness or jury consultant. “With recent annual returns surpassing 20%, it’s not difficult to see why investors are making third-party litigation funding one of the fastest-growing alternative asset classes,” III writes.
LMA Newsletter of 8-22-22
