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Security First Insurance Co. v. Florida Office of Insurance Regulation

Florida Court of Appeals, Fifth District

December 1, 2017

SECURITY FIRST INSURANCE COMPANY, Appellant,
v.
FLORIDA OFFICE OF INSURANCE REGULATION, Appellee.

         NOT FINAL UNTIL TIME EXPIRES TO FILE MOTION FOR REHEARING AND DISPOSITION THEREOF IF FILED

         Administrative Appeal from Florida Office of Insurance Regulation.

          Steven G. Schwartz and David J. Pascuzzi, of Schwartz Law Group, Boca Raton, for Appellant.

          Richard A. Sherman, Sr. and James W. Sherman, of Richard A. Sherman, P.A., Fort Lauderdale, Amicus Curiae for Universal North America Insurance Company.

          Thomas P. Crapps and Timothy J. Meenan, of Meenan P.A., Tallahassee, Amicus Curiae for Florida Bankers Association, Florida Insurance Council and Personal Insurance Federation of Florida.

          Gray Proctor and Susan Fox, of Fox & Loquasto, PA., Orlando, Amicus Curiae for Florida Justice Association.

          Tamara R. St. Hilaire, Shaw P. Stiller and Lacy End-Of-Horn, of Florida Office of Insurance Regulation, Tallahassee, for Appellee.

          OPINION

          PAULK, G. T., Associate Judge.

         Security First Insurance Company appeals the order entered by the Commissioner of the Department of Insurance, Office of Insurance Regulation ("OIR"), adopting the Report and Recommendations issued by a Hearing Officer. The Report and Recommendations concluded that OIR had properly disapproved Security First's request to amend its policy language to restrict the ability of policyholders to assign post-loss benefits. We affirm.

         Security First is a property and casualty insurance company licensed to transact business in Florida. Before issuing policy forms in Florida, Security First is statutorily required to file all forms it intends to use with OIR for approval. Here, Security First submitted proposed policy endorsements to OIR for approval. Specifically, Security First requested OIR's approval to add endorsements to the conditions section of its Homeowners, Tenant Homeowners, Condominium Unit Owners, and Dwelling Fire insurance policies. The endorsements proposed the inclusion of new language, titled "Assignment of Benefits" (AOB); the language restricted the ability of policyholders to assign post-loss benefits absent the consent of all insureds, all additional insureds, and all mortgagees named in their policies.[1]

         OIR issued a letter disapproving the proposed endorsements. The disapproval letter stated that "the forms violate the intent and meaning of [s]ections 627.411(a), (b), and (e), Florida Statutes" and that they contained "language restricting the assignment of post-loss claim benefits under the policy which is contrary to Florida law." Security First requested administrative review of OIR's decision, the central issue being Security First's contention that Florida's case law prohibitions against the enforcement of policy provisions which require consent for a post-loss assignment of benefits only apply to provisions requiring the insurer's consent.

         The Hearing Officer upheld OIR's decision, concluding that it was not clearly erroneous because a "restriction on the right of a policyholder to freely assign his or her post-loss benefits is prohibited under Florida law" and "the incorporation of such a restriction on an assignment of post-loss rights in an insurance policy would be misleading for policyholders." The OIR Commissioner thereafter entered a final order adopting the Hearing Officer's Report and Recommendations. Security First appeals this ruling.

         "The standard of review of an agency decision based upon an issue of law is whether the agency erroneously interpreted the law and, if so, whether a correct interpretation compels a particular action." Fla. Hosp. v. Agency for Health Care Admin., 823 So.2d 844, 847 (Fla. 1st DCA 2002)(citations omitted).

         Security First concedes that Florida case law holds that an endorsement requiring an insurer's consent for a post-loss assignment of benefits is not enforceable, but argues that such case law only applies ...


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