Just over a year ago, Florida Gov. Ron DeSantis signed House Bill 7065, which became Fla. § 627,7152 – better known as the Florida Statute for the Distribution of Benefits.
Since July 2019, insurance companies have used the AOB Charter to point out all minor technical deficiencies in a contract of assignment to claim "gotcha" and claim that these "deficiencies" invalidate the agreement and any lawsuit must be dismissed. Alternatively, the insurance companies try to use the AOB charter to avoid their obligation to pay legal fees that are otherwise required under Fla. Stat. §627,428.
In response, a real dispute has developed in the courts when the Florida AOB Statute applies to assignment agreements. Insurance companies point to subsection (1
This section applies to an assignment agreement that is implemented on 1 July 2019 or later.
You might ask, how is it then a dispute?
Well, the Supreme Court of Florida in Menendez v. Progressive Express Insurance Company, Inc. 1 held that a very similar statutory system could not apply retroactively to insurances issued before the statute was adopted. This case from 2010 concerned a claim for personal injury insurance (PIP). But state and federal courts in Florida agree with the reasoning in Menendez and its application to the AOB Charter. If this topic interests you, I recommend that you read the entire Menendez opinion.
Although this does not invalidate the AOB Statute, it limits the application of the statutes. First, the beneficiary must look at the policy in force at the time of the loss and determine whether the policy was issued on or after the effective date of July 1, 2019. If the policy was issued before July 1, 2019, then the charter should not be applied retroactively. This means that the AOB Charter will not apply to any assignment agreements for Hurricane Irma and Hurricane Michael, Florida's latest disasters.
If you are an entrepreneur reading this, please do not take this to mean that you can completely ignore the charter. While Florida courts have and should continue to reject insurance companies' attempts to apply this charter with retroactive effect, it is best for contractors to follow the charter's requirements of abundance of caution until a court of appeal weighs the matter.
1 Menendez v. Progressive Express Ins. Co. 35 So.3d 873 (2010).