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Must-pass workers’ compensation, AOB reform languishing in Legislature

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With House and Senate leaders caught up with budget negotiations ahead of Friday’s deadline for adjournment, advocates for legislative fixes for assignment of benefits and workers’ compensation reform confronted this possibility:

Their must-pass legislation might not pass.

There’s a workers’ compensation bill on the Senate calendar, but it differs in significant respects from the version the House adopted, and it was unclear whether those differences could be reconciled in the time left.

Meanwhile, the House has adopted assignment of benefits, or AOB, reforms. But Senate version languishes in the Rules Committee.

“The problem we have right now is a bandwidth issue, with leaders being so involved in these (budget) numbers that they can’t really focus on these policies or strategies, or how we would do it — which bill, this and that,” said Sen. Gary Farmer, who sits on the Banking and Insurance Committee and is sponsor of the Senate AOB bill.

“That’s been the impediment we’ve been seeing. If we are going to extend, the way some people are speculating now, maybe that will give us a few extra days to get something done,” Farmer said.

“At this point, we would take anything as movement,” said Rep. James Grant, co-sponsor of the House AOB bill.

“The dialog has been very good. We have the ability to move stuff when we receive it on either side of the rotunda. We just need them to send us something to start the process,” he said.

Insurance companies and their business allies ardently desire both bills, chiefly as a means to control rising premiums. The Office of Insurance Regulation approved a 14.5 percent hike in workers’ comp rates last year, and interior water claims are driving up costs for property insurers.

The Senate workers’ compensation bill, CS/SB 1582, is more generous that the House version with attorney fees in claims challenges — it would let compensation claims judges depart from the state’s fee schedule by as much as $250 per hour if justified, as opposed to $150 in the House.

Another significant difference is that the Senate would shift to a loss cost premium-setting system, whereby insurers would independently propose rates to state regulators, instead of as a group, as most do now.

Sponsor Rob Bradley has said his bill would decrease premiums by a “small to moderate” amount, versus at least 5 percent in the House. But he’s deeply involved in negotiations over spending on environmental priorities.

The House approved its workers’ compensation bill, HB 7085, on April 19.

Insurance Commissioner David Altmaier’s top priority this year is legislation to make it harder for unscrupulous contractors and attorneys armed with AOB agreements to inflate claims and run up legal fees.

The House has approved an Altmaier-approved AOB bill, PCS/HB 1421, which would tighten requirements for contractors to report claims to insurance companies and establish a graduated scale for determining whether attorneys qualify to recover litigation expenses from carriers.

Grant has said that the bill would forestall increases in property insurance rates approaching 50 percent.

In the Senate, the Rules Committee adjourned its final meeting last week without reaching a Farmer bill that would bar insurers from including attorney fees paid in benefits litigation when calculating premium levels.

Farmer had hoped to attach his AOB bill to that measure.

“We’ll have to see if Rules has another meeting, or if there’s some other way to get this bill moving,” Farmer said at the time.

Florida Chamber of Commerce lobbyist Carolyn Johnson could live with that, if it keeps AOB reform alive.

“Then hopefully, we might be able to get some meaningful reform,” she said — even though the Chamber opposes key elements of Farmer’s bill.

So could Grant.

“If they would pull something up and move something, we would be in a very good place,” he said.

“I don’t think we’re that far off,” Grant said of the House and Senate philosophical approaches.

“The conversations I have been a part of agree to the same two-tier criteria we’ve been talking about all along on our side — reduce premiums and not mess with a homeowner who has been paying his premiums and has a legitimate loss.”

Insurance lobbyist Tim Meenan would be comfortable with the House position on AOB reform. But he questioned the Senate’s appetite for parliamentary tricks with the budget still unsettled.

“Is the Senate up to that with only three days to go? The answer is probably no,” Meenan said. “But waive the rules with a two-thirds vote, and you’re off to the races.”

Michael Moline is a former assistant managing editor of The National Law Journal and managing editor of the San Francisco Daily Journal. Previously, he reported on politics and the courts in Tallahassee for United Press International. He is a graduate of Florida State University, where he served as editor of the Florida Flambeau. His family’s roots in Jackson County date back many generations.

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