TALLAHASSEE, Fla. – Florida Insurance Commissioner Kevin McCarty welcomed the First District Court of Appeal’s
decision affirming the Office of Insurance Regulation’s (Office) denial of United Insurance Company of America’s (United) request to include a mandatory arbitration clause in its life insurance contracts.
Arbitration would have forced disgruntled policyholders to bypass the legal system to settle disagreements. United appealed the Office’s action and the Court affirmed the denial.
“Policyholders have fewer rights and constitutional protections under the more restrictive arbitration process than they would have in a civil court proceeding,” said Commissioner McCarty. “I’m pleased that the Court made it clear that Florida consumers should not be shut out of the traditional legal system to press their grievances against insurance companies.”
Although United argued that federal arbitration law superseded the Florida law that allows policyholders to use the courts for contractual disputes; the Court found that this matter “specifically relates to the business of insurance” and is, therefore, exempt from being superseded by federal law.
About the Florida Office of Insurance Regulation
The Florida Office of Insurance Regulation (Office) has primary responsibility for regulation, compliance and enforcement of statutes related to the business of insurance and the monitoring of industry markets. Business units within the Office are organized based on regulatory expertise and include the areas of life and health, property and casualty, specialty lines and other regulated insurance entities. It is within the Office that the mission of public protection is implemented through regulatory oversight of insurance company solvency, policy forms and rates, market conduct performance and new company entrants to the Florida market.
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