Florida’s lawmakers are set to focus on affordability of property insurance for citizens of the state at the upcoming Special Session, with tackling fraud and abuse of assignment of benefits (AOB) both key areas to reform, according to the states CFO Jimmy Patronis.Speaking in the last hour, alongside Florida’s Citizens Property Insurance Corporation CEO Barry Gilway, Patronis laid out five key areas for reforming Florida’s property insurance marketplace.All five are related to fraud, which Patronis highlighted as the major issue facing Florida’s property insurance market, on which Gilway agreed.Patronis said, “In this Special Session, my office will be pushing forward five different initiatives aiming at cracking down ton he kind of fraud and litigation that drives up rates for every single one of us.” First, is the setting up of three new anti fraud homeowner squads that will “live and breathe property insurance fraud,” Patronis said.

Second a $3 million funding for a fraud related public education campaign to help Florida’s property insurance policyholders understand their rights when signing away a claim.Third, amendments under qui-tam law, putting in place “a reporting mechanism that will incentivize the public to come forward and report the fraud taking place.” The fourth area of focus is to “incentivize people financially to call our Florida blocked Florida Fraud Fighter tip line.” Finally, the fifth is perhaps most of interest to the reinsurance community, with changes to be made to the AOB laws, “including banning the bundling of these assignment of benefits,” Patronis said.On AOB, Patronis summarised, “Much of the fraud and abuse in our legal system we have highlighted this morning started with a policyholder assigning their benefits away to somebody else, to a fraudster.

We cannot allow law firms and public adjusters to get into the business of bundling these AOB’s and selling them the same way you would a security for a profit.“I want to deter this feeding frenzy of bad actors going after our consumers to sell AOB’s on the open market, which again ultimately drives up rates, which drives carriers out of the state of Florida, because the environment allows that type of activity to exist in the first place.Patronis said the Florida state of play right now is “a game of whack-a-mole”, in trying to stop attorneys that move around and establish new companies to take advantage of the system, exploiting the statutes to use loopholes that enable their fraud.

With these fraud and AOB focused changes to be discussed and potentially embedded into the legislature, it promises to help stem the tide of fraudulent claims in the Florida property insurance market.This is what both insurance carriers and reinsurance capital providers want to see, but these changes will need to meaningfully move the needle on litigated claims and quickly, if the state is to stabilise the insurance market relatively quickly.Gilway of Florida Citizens also said, “One of the ways Citizens is attempting to keep the premiums down and realistic is taking a hard line on fraud.

“I’m thrilled to hear the CFO today announce all of these aspects that will make such a significant difference.” Of course, these five areas of focus for the CFO of Florida still need to be adopted and codified into law through the Special Session.They will also take time to have any effect on the marketplace, to restore the profitability of insurers and for any benefits to flow onto reinsurance capital providers, through their views of risk in the state of Florida.Which means Florida insurance and reinsurance market participants will need to carry on almost regardless of what is happening in a few weeks at the Special Session and what could change or be improved, as evidenced by the continued quest for more rate among primary insurers, .

But, these five areas of focus from Patronis all seem eminently reasonable proposals for stemming the litigation tide.The question is whether they will be enough? Or will there be reforms tabled for the FHCF and other factors as well? ..

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