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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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
Slide2Florida’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
Slide3The 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.
Slide4AOB 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
Slide5No-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.
Slide6AOB 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.
Slide7Abuse spread to auto glass virtually overnight
Source: Florida Department of Financial Services Service of Process Database, Insurance Information Institute.
Slide8Has 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.
Slide9Is auto glass abuse impacting legal costs?
Source: NAIC data, sourced from S&P Global Market Intelligence, Insurance Information Institute.
Slide10www.iii.org
Thank you!