AAI Helps Insurers Dodge Child Support Intercept Bill in Fla.

May 1, 2003

The Alliance of American Insurers (AAI) has reportedly successfully removed all insurance-related provisions from Florida SB 1638, a bill that would have required insurers to withhold unpaid child support from insurance claim payments. A companion bill, HB 1761, will be amended to conform when it reaches the House floor.

The bills would have reportedly created a new duty for insurers to perform a data match for possible delinquent child support obligors, and withhold monies, prior to making claim payments, including payments for workers’ compensation claims. According to AAI, particularly onerous was a provision that made insurers not properly withholding child support responsible for the unpaid amount, plus penalties, interest and attorneys’ fees.

“These bills are nothing more than state-mandated expenses that pressure premiums to rise for all citizens,” said William Stander, government affairs representative for the Alliance’s Southeast Region. “They create a process that would require substantial resources for time-consuming, cross-checking of lists of delinquent obligors, and thousands of dollars of insurers’ payroll to be expended in an attempt to place child support liens on claim payments.”

“The state also would incur additional expense in setting up and running the database needed to match those owing restitution with those being paid insurance claims,” added Kirk Hansen, Alliance director of claims. “A database to identify deadbeat parents that does not require insurers to data match already exists, so this proposal was akin to reinventing the wheel.”

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