4 Things Florida Insurers Need to Do Now to Comply with SB 2A
by Mark Funk, with contributions from Alonza Coleman and Kyle Darling
With the passage of SB 2A, the Florida state government introduced multiple important regulations to the state’s struggling property insurance market. While the legislation brings about multiple needed reforms, including the elimination of one-way attorney fees and assignment of benefits arrangements, a reduction in the claim notice period, and new regulations surrounding when policyholders must secure coverage with a carrier outside of the state’s insurer of last resort, the operational changes introduced in the bill are likely to have a more immediate impact on carriers in the state.
Below are four things insurance carriers who write property coverage in Florida should implement now to ensure compliance as this new legislation becomes law.
Establish a Virtual Adjust Team
The new, shortened time frames for claim acknowledgment (14 days from filing), commencing investigations (14 days from proof of loss statement receipt), and payment or denial (within 60 days in some instances) represent a significant shift for many carriers in Florida. However, these new mandated deadlines do align with similar requirements in other states, and Florida carriers can leverage the expertise of vendors who work within those states to quickly implement a virtual adjust team for their Florida operations.
In addition to helping meet the newly mandated time frames, a virtual adjust team can deliver multiple operational benefits to Florida property carriers. These include reduced cycle times (by up to 5 days in some cases), decreased claims leakage (by up to 70%), reduced independent adjuster expenses (by up to 60%), and new payment and investigation standards.
Evaluate Claim Submission Data Points
Data collection and use in the claims function has always been an important component of effective claims handling, and that is even more important for Florida carriers now given SB 2A. Taking a close look at the data fields involved in claims reporting and analysis, including analyzing which fields are required and which new fields may be needed, is an important first step. Special consideration should be given to data fields involving roofing solicitation and changes to compliance standards in line with this new legislation.
Update Training Programs and Guidelines
Ensuring team members and vendors are trained on the new legislation and process changes is critical. This includes understanding the new compliance and policy changes (like those involving separate roof deductibles) as well as training team members on estimating best practices and estimating system utilization. Additional training for front-line adjusters may also be required to ensure an understanding of new litigation guidelines.
The new quarterly reporting requirements for carriers also require training to ensure insurers comply with the standards. Quarterly reports to the Florida OIR now must include monthly data on claims opened, closed, and pending as well as the number of claims involving alternative dispute resolution because of the carrier, and which forms of ADR were utilized.
Implement New Technology-Driven Solutions
Technology and digital claims management solutions have been transforming the insurance marketplace for years, but the SB 2A legislation will likely fast-track the use of new technologies and approaches to managing claims in Florida.
One key area where technology will now become standard is damage inspections. With the passage of this bill, the state of Florida now officially authorizes the use of new collection tools (like drones and other driverless vehicles) for inspections in the state. This will likely revolutionize how many carriers operate and create new efficiencies for those adopting new approaches quickly and effectively. Of course, this is just one example of how technology can (and will) have a significant impact on claims administration in the state.
The passage of SB 2A is an important step forward for the Florida property insurance market and should help to ensure a competitive, fair insurance marketplace in the state for years to come. However, carriers operating in Florida must understand the shifting requirements they’ll need to comply with as part of this new legislation.
Xceedance is ready to help you comply with these new requirements today!
If your organization needs help setting up new claims operations or is looking for a turnkey TPA partner, look no further. Xceedance Claims TPA and claims consulting capabilities offer ready-made solutions already proven in the Florida market. The Xceedance Claims TPA combines people, processes, and systems to support the new SB 2A regulations today. With an experienced and ready team of veteran claims professionals, a digital-first claims TPA system, the Xceedance claims team is ready to help you adapt to the changing Florida property insurance market seamlessly or drive a new claims experience for your business and policyholders. Visit our claims page to learn more or connect with us to explore solutions to meet your company’s specific needs.
Mark Funk is AVP – quality assurance/subrogation for the Xceedance claims team
Alonza Coleman is senior property adjuster, U.S. claims and Kyle Darling is director, U.S. property claims