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Florida’s assignment of benefits crisis Florida’s assignment of benefits crisis

Florida’s assignment of benefits crisis - PowerPoint Presentation

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Florida’s assignment of benefits crisis - PPT Presentation

Runaway litigation is spreading and consumers are paying the price James Lynch FCAS MAAA Chief Actuary Insurance Information Institute 110 William Street New York NY 10038 2123465533 ID: 784845

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Presentation Transcript

Slide1

Florida’s assignment of benefits crisis

Runaway litigation is spreading, and consumers are paying the price

James Lynch, FCAS MAAA, Chief Actuary

Insurance Information Institute

110 William Street

New York, NY 10038

212.346.5533

jamesl@iii.org

www.iii.org

Slide2

Florida’s legal environment drives abuse

Source: Florida Department of Financial Services Service of Process Database, Insurance Information Institute.

One-way attorney’s fee statute

No insurer consent needed

AOB lawsuits are increasing

If plaintiff wins lawsuit, insurer pays their attorney’s fees – but if plaintiff loses, they don’t pay insurer’s fees

Insureds can assign their benefits to a third-party without insurer consent or knowledge

Slide3

The abuse is spreading across Florida

*Miami-Dade, Broward, and Palm Beach Counties.

**Pinellas, Hillsborough, Orange, Volusia, Osceola, Polk and Seminole Counties.

Source: Florida Department of Financial Services Service of Process Database, Insurance Information Institute.

Slide4

AOB abuse and impacts on PIP legal costs

The cost of settling claims

grew in Florida, but subsided after legislative reforms.

Source: NAIC data, sourced from S&P Global Market Intelligence, Insurance Information Institute.

PIP reforms take effect

Impacts of reform appear on insurer balance sheets

Slide5

No-fault AOB lawsuits are ticking back up

We can expect legal costs – and premiums – to increase soon

Source: Florida Department of Financial Services Service of Process Database, Insurance Information Institute.

Slide6

AOB abuse increases – and spreads beyond South Florida

*Miami-Dade, Broward, and Palm Beach Counties.

Source: Florida Department of Financial Services Service of Process Database, Insurance Information Institute.

Slide7

Abuse spread to auto glass virtually overnight

Source: Florida Department of Financial Services Service of Process Database, Insurance Information Institute.

Slide8

Has the problem been addressed?

*Pinellas, Hillsborough, Orange, Volusia, Osceola, Polk and Seminole Counties.

Source: Florida Department of Financial Services Service of Process Database, Insurance Information Institute.

Slide9

Is auto glass abuse impacting legal costs?

Source: NAIC data, sourced from S&P Global Market Intelligence, Insurance Information Institute.

Slide10

www.iii.org

Thank you!