Demotech, Inc., a Columbus Ohio based financial analysis and actuarial services company, was the first company to review and rate independent regional and specialty insurers. Demotech reviews, rates and monitors more than 400 insurers countrywide, in all fifty states, including more than 50 insurers representing nearly 60% of Florida’s Homeowners’ insurance marketplace. The majority of Florida domestic property insurers rely solely on maintaining a Demotech Financial Stability Rating of “A” or better such that their policies are acceptable to meet Fannie Mae and Freddie Mac loan requirements, premium financing requirements, umbrella insurance policy requirements and other criteria of assistance to consumers.
Based upon Demotech’s review and interaction with insurance companies operating in all 50 states, the District of Columbia and Puerto Rico, Demotech is unaware of any state other than Florida where assignment of benefits is utilized as a litigation for profit scheme whereby service providers, contractors and public adjusters can usurp the insured’s right to sue insurers and thereby extract payment for what appear to be inflated invoices for services and disproportionate legal fees. The remaining 49 states have no such phenomenon and we are unaware of any issues related to the collection of payment for services rendered from carriers and insureds pursuant to a direction to pay from the insured that exist in Florida that would require a distinction of this type. Similarly, prior to 2011 when the use of assignments in this manner emerged, Florida’s service providers were utilizing a direction to pay from the insured to collect from an insurer.