Court Denies Insurer’s Motion to Rehear and Certification of Decision Upholding OIR’s Decision Denying Form to Restrict Homeowner’s Assignment of Benefits

Today, the First District Court of Appeal denied Security First’s motion seeking the court to rehear its decision in Security First Insurance Company v. State of Florida, Office of Insurance Regulation, Case No. 1D14-1864 (Fla. 1st DCA Oct. 26, 2015).  Security First had filed a proposed form with OIR requiring a homeowner to obtain Security First’s consent before assigning an post-loss right under the policy.  OIR denied the form after an informal administrative hearing, and Security First appealed the agency’s decision.

The court upheld OIR’s decision citing “a century of precedents from Florida’s courts” that an insured “may assign post-loss rights without the insurer’s consent.”   Further, the court specifically rejected Security First’s arguments that there was any conflict with case-law upholding “anti-assignment provision in a health policy.”  The court recognized that case-law upholding an “anti-assignment clause” in the health care context was deemed “permissible because the anti-assignment clause had beneficial and important economic ramifications on the provision of health care services through lower-cost provider networks” as recognized by Florida statutes that authorized such prohibitions.  The court noted that Security First could not point to a similar statute restricting post-loss assignments in the homeowner’s insurance context to support its position.  Thus, the court found no basis for rehearing, nor any basis for certifying the case to the Florida Supreme Court.

The bottom-line is that an insurer who wants to restrict a homeowner’s assignment of benefits post-loss based on the argument that sound economic reasons support the restriction will have to make those arguments to the legislature.   The courts aren’t buying it.

A copy of the court’s decision is available here.