How can you tell when an insurance lobbyist is not telling the truth? Everyone should know the answer. But a recent article in the Insurance Journal, Florida’s SB 2A ended one-way court fees. Now some insurance companies say it’s retroactive, shows that laws written and supported by the insurance industry are always suspect.
Florida lawmakers, relying on insurance industry lobbyists, told other lawmakers that the one-way attorney fee law would not apply retroactively and would not affect Hurricane Ian policyholders whose claims were denied. The law passed and guess what? Insurers now say the new laws are retroactive to avoid liability for underpaying, delaying and denying Hurricane Ian policyholders their benefits.
The article noted:
Case law speaks to the issue, Lozier and Merlin said. 2010, Florida Supreme Court in Menendez vs. Progressive Express Insurance found that a Florida statute requiring notice of intent to sue could not be applied retroactively to policies issued before the amendment was enacted.
The court noted that even if the Legislature intended the prior notice provision to apply retroactively, the court cannot accept that claim “if the statute abridges a vested right, creates a new duty, or imposes a new penalty.” That was considered a substantive change, not just a procedural one, the judges wrote.
With SB 2A’s attorney fee provision, there was no clear legislative intent for the law to be retroactive, said Lozier, with the Clausen Choquette law firm. To interpret the law otherwise would be a material change, would introduce new and unexpected penalties, and would violate the US Constitution’s retroactive principle, she argued.
The final lesson is one for our elected leaders. When insurance company lobbyists say something, you can’t trust it. The statistics they cited to support the new laws were made up. The effect of the laws was not truthfully described.
Thoughts for the afternoon
Trust is hard to come by. That’s why my circle is small and tight. I’m kind of fun making new friends.