HB 7065 – Relating to Insurance Assignment Agreements

On Thursday, March 28, HB 7065, sponsored by the House Civil Justice Subcommittee, was heard in the House Judiciary Committee and was reported favorably with 14 yeas and 3 nays. AIF’s Senior Vice President of State and Federal Affairs, Brewster Bevis, stood in support of this legislation.

The abuse of the one-way attorney fee statute in relation to “assignment of benefits” (AOB) has created a relatively new form of litigation over auto glass repairs and property damage. These legal abuses are perpetrated by a handful of lawyers and vendors who work together to strip benefits away from policyholders and use these to force higher settlements from insurers, and even go so far as to sue in the name of the policyholder, often without the policyholder’s consent. This bill helps prevent future abuse of AOBs by:

• Limiting an assignee’s ability to recover certain costs from the insured;
• Requiring the assignee to give the insurer notice of the assignee’s intent to file a lawsuit
• Requiring the insurer to respond to the assignee’s notice;
• Setting the formula that will determine which party, if any, receives an award of attorney fees should litigation related to an assignment agreement result in a judgment; and
• Allowing an insurer to offer a policy prohibiting assignment.

HB 7065 will now move to the House floor.

AIF supports reforms to the AOB process to protect consumers against these abuses that drive up insurance costs.