Hurricane Law Group Alleges Florida Withheld Consumers’ Mediation Options

April 3, 2008

The Florida-based Hurricane Law Group announced today that it has filed a lawsuit in the Circuit Court of the Second Judicial Circuit in Leon County against CFO Alex Sink, Insurance Commissioner Kevin McCarty, the Department of Financial Services and the Office of Insurance Regulation to force the state to enforce Florida laws designed to protect Floridians in the wake of the 2004 and 2005 hurricanes.

The lawsuit alleges that there is substantial evidence to document insurance companies’ violations of both the spirit and the letter of state consumer protection laws by failing to notify homeowners of their statutory right to participate in mediation to resolve hurricane claims (Florida Statute ยง627.7015). Evidence documents that these violations were committed with the knowledge and approval of the Department of Financial Services and Office of Insurance Regulation, according to HLG.

As alleged in the lawsuit, by systematically depriving homeowners of their right to participate in mediation, insurance companies benefited by hundreds of millions of dollars. This benefit was at the expense of all Floridians and was gained by underpaying claims and saving mediation fees and expenses. This was done with the approval of state agencies entrusted with enforcing the mediation statute and preventing insurance companies’ profiteering by violating the law, HLG said.

Since July 2007, the Hurricane Law Group has provided state agencies with evidence of statutory violations by numerous insurance providers including Allstate, State Farm, Poe Financial Group (Florida Insurance Guaranty Association), and other major insurance carriers.

“We were shocked by the response of senior members of the Department of Financial Services,” said Paul Berger, managing attorney of the Hurricane Law Group. “In essence, they acknowledged the violations and stated on numerous occasions that mediation was too expensive for insurance companies to continue with the program.
Rather than upholding the laws of the state and protecting Floridians, these state agencies are protecting insurance companies at the expense of hurricane victims. Floridians were victimized first by the hurricane, then by their insurance carrier, and now by the State.”

HGL sited a statement Florida Gov. Charlie Crist made in a Jan. 14 press release, “For too long, the [insurance] industry has profiteered on the backs of our people. Sometimes, big business can be just as bad as big government.”

According to the Hurricane Law Group, in this case, big government and big business are working hand in hand to deprive Floridians of their right to a speedy recovery from hurricanes.

“We at the Hurricane Law Group felt that we had no other choice but to seek protection from the Court for Floridians,” Berger said. “Unfortunately, the governor has refused to intervene on behalf of Floridians. Consumer Advocate Terry Butler has done nothing, and Alex Sink and Commissioner McCarty’s offices have been delaying taking any action on this matter for months, despite admissions of violations of the law by the insurance companies themselves.”

As Commissioner McCarty stated when implementing the mediation program (Informational Memorandum OIR-06-004M), “The failure by insurers to timely process, settle and pay these claims delays the insured’s ability to repair damaged structures or replace lost property.”

The HLG lawsuit alleges that the OIR and the Department of Financial Services have “effectively become mouthpieces for the insurance industry, and have eviscerated the system set forth by our legislature to ensure the prompt and fair settlement of claims.”

HLG says it is appalling that Floridians are struggling to rebuild, when hundreds of millions of dollars in claims have been underpaid, and elected officials have a solution that is readily available and costs the state nothing.

The group calls for the attorney general to investigate the matter.

Hurricane Law Group wants the Court to grant the relief sought and require the governmental bodies to enforce consumer protection laws passed by the Legislature.

A copy of the lawsuit is available at

Source: The Hurricane Law Group

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