After years of passing insurer-friendly bills to stabilize the market and attract companies to the state, Florida lawmakers are now advancing legislation to give policyholders more even footing with providers.
This week, members of the House Insurance and Banking Subcommittee voted 15-1 for HB 1551, which would create a prevailing party standard — the loser pays, essentially — for attorney’s fees in insurance-related lawsuits.
Proponents say the measure will hold insurers more accountable to their policyholders. Opponents contend it’ll line the pockets of attorneys while raising costs for consumers.
The prevailing party standard is different from “one-way attorney’s fees,” an arrangement under which insurers had to pay the attorney’s fees of policyholders suing them if the plaintiffs secured any financial award in the case.
The GOP-controlled Legislature nixed that provision through a sweeping insurance reform package (SB 2A) in December 2022 that won plaudits from insurance companies and denouncements from Democrats and policyholders who decried it as a “bailout” to companies raising rates while denying claims.
One of those Democrats, now a Republican, was Dania Beach Rep. Hillary Cassel, HB 1551’s sponsor. She called the 11-page proposal a “win-win, which we don’t often see in this process.”
“This is a win for consumers. This is a win for valid claims. This is a win to hold those insurance companies that don’t want to do the right thing accountable. And this is a win for insurance companies to defend against frivolous litigation,” she said.
“Everybody now has skin in this game.”
Cassel, a lawyer who specializes in representing Floridians against their property insurance companies, made clear that key aspects of SB 2A and its 2021 predecessor, SB 76, would remain in place. Among them: a reduced timeframe to file claims — now one year, down from three — and a requirement for policyholders to file a notice of intent to litigate before they sue.
Both bills preceded a steep reduction in insurance-focused litigation and the arrival of 11 insurers to the state to scoop up policies state-run Citizens Property Insurance shed through its “depopulation” program.
But they didn’t reduce premiums, which for many policyholders have rocketed up in recent years, outpacing inflation and leading some to opt out of having property insurance altogether.
Delray Beach Republican Rep. Mike Caruso, who cast the sole “no” vote Thursday, noted that according to a House staff analysis of the bill, HB 1551 isn’t likely to lower premiums either. In fact, he said, staff predicted it could lead to higher costs for consumers.
Caruso suggested instead to give Florida’s still-relatively-new insurance laws more time to work — which they have, he said, referencing an announcement Gov. Ron DeSantis made last month about declining premiums and a growing market.
“Why now?” he said. “I’m not saying it’s a perfect world and that we’ve completely rectified it, but because of the legislation, in addition to having these companies come in and bringing down the number … of policies Citizens carries, we’ve seen insurance rates stabilize.”
Cassel said that since the passage of SB 2A, Florida has seen a 40% decrease in insurance litigation.
“I don’t believe any of our constituents have seen a decrease in their premiums by 40%, but we’ve seen claims being denied,” she said. “This allows the valid claims to move forward in litigation and hold those insurance companies that aren’t doing the right thing accountable.”
Cassel’s bill and others aimed at rectifying Florida’s insurance woes come in the wake of massive costs from severe storms like last year’s Hurricane Milton. They also follow revelations from a 2022 state report the Tampa Bay Times obtained after a two-year wait for public records, which revealed that as Florida insurers claimed to be losing money, they were sending hundreds of millions of dollars to their out-of-state parent companies. The study’s author concluded most insurance executives in Florida violated state regulations.
The bombshell report was never given to state lawmakers. Cassel filed HB 1551 six days after the Times’ story went live.
Palm Bay Republican Rep. Monique Miller said the state insurance report, which was never made public until the Times’ published it, has led to something of a quandary for lawmakers.
“While that report was sitting there, some information (in it) made its way into a Special Session in which this Legislature voted to change substantially how we manage this marketplace, and so we find ourselves today (where) we have citizens who have paid their insurance premiums, as high as they were … and now they’re not getting the relief they need,” she said.
“And they have no recourse. So, we’re finding ourselves again having to act in an urgent situation, and while it’s not ideal, I think we have to do something to relieve that market pressure until we find out what’s actually happened with the insurance companies.”
Several organizations and companies attended the meeting to oppose HB 1551, including the Florida Justice Reform Institute, Americans Prosperity Casualty Insurance Association, Florida Insurance Council, National Federation of Business, U.S. Chamber of Commerce and Associated Industries of Florida.
Brandon Blake of the Personal Insurance Federation of Florida said that contrary to Cassel’s characterization of it, HB 1551 would not improve the insurance market’s equilibrium and will instead incentivize lawyers to sue insurers rather than represent clients in medical malpractice or personal injury claims.
He added that despite carrying a different title and general description, there is little that differentiates the prevailing party standard from the one-way attorney’s fees Florida jettisoned years ago.
“Instead of going back to balance, this will go back to the issue of having 76% of lawsuits where we only have 8% of claims nationwide,” he said. “This is going to gob back to seeing the 20% increases (yearly in premium) rates as opposed to just 8% now.”
Mark Wilson, President and CEO of the Florida Chamber of Commerce said in a statement HB 1551, if passed and signed by the Governor, would “effectively reverse the elimination of the one-way attorney fee provision causing explosive litigation that the Florida Chamber fought to remove for nearly a decade.”
Other organizations, including the Florida Medical Association, Florida Chiropractic Association and the Merlin Law Group, signaled support for the change.
Laura Youmans of the Florida Justice Association said HB 1551 is, in essence, about an individual’s right to freely contract, and the contracts at issue — the ones insures offer — are “contracts of adhesion,” meaning they’re documents the companies prewrite that policyholders must sign or be denied coverage.
“The problem … is that this imbalance means you will never see an insurance company suing a consumer for failing to comply with a contract,” she said. “If they don’t comply, (then) they’re canceled, so (insurers) don’t have to use the courts to access the value of their contracts like we do.”
HB 1551, co-sponsored by St. Coud Republican Rep. Paula Stark, has one more hearing before the House Judiciary Committee before going to a floor vote. Its Senate analog (SB 426) by Fort Myers Republican Sen. Jonathan Martin awaits a hearing before the first of three committees to which it was referred this month.
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