Florida Insurance Reform Special Session 2 – This Time Means Business

Between 2017 and 2022, 11 property & casualty insurers domiciled in Florida were declared insolvent and placed into liquidation. In an attempt to restore stability to the marketplace, Governor Ron DeSantis issued a proclamation on April 26, 2022, calling the Florida Legislature into special session to reform Florida’s Insurance Code. While the ensuing May special session yielded significant changes, including amendments designed to reduce fraudulent roof claims and to curtail the use of Assignment of Benefits agreements and the award of attorneys’ fees, it was widely believed that the reforms did not go far enough. Support for this viewpoint was readily found in the number of carriers voluntarily choosing to cease writing policies in Florida, as well as the skyrocketing number of policies held by the state-created “insurer of last resort,” Citizens Property Insurance Corporation.

In response, the newly elected President of the Florida Senate, Kathleen Passidomo, and Speaker of the Florida House, Paul Renner, issued a proclamation on December 6, 2022, calling a second special session on insurance in less than a year. Whereas the May special session may be described as taking “half-steps” on certain drivers of market instability, such as AOBs and the so-called “One-Way Attorneys’ Fee Statute,” the December special session took full strides when it enacted Senate Bill 2A. The legislature eliminated the One-Way Attorneys’ Fee Statute and banned AOBs for claims under policies issued on or after January 1, 2023, in addition to a number of other reforms.

The following discusses the reforms adopted by Senate Bill 2A. Although there is more to do, these reforms should go towards stabilizing the market and creating the conditions necessary to attract new well-capitalized insurers to the Florida market and perhaps driving rates down over time.