SOURCE: Florida Property & Casualty Association

January 22, 2015 10:02 ET

Florida Property & Casualty Association Opposes DBPR's Proposed Rules 61-31.701 and 61-31.702, Minimum Standards and Practices for Mold Remediators

FPCA's Comments Cite Rules' Impacts: Potential Conflicts of Interest, Coverage Cap Issues and Increased Homeowners Insurance Rates

TALLAHASSEE, FL--(Marketwired - January 22, 2015) - On December 30, 2014, the Florida's Department of Business and Professional Regulation (DBPR) published proposed Rule 61-31.701, Minimum Standards and Practices for Mold Assessors, and proposed Rule 61-31.702, Minimum Standards and Practices for Mold Remediators. The FPCA has participated in a workshop and has carefully analyzed these proposed rules. Our members are recommending against their adoption.

If these rules are implemented, insurers will receive bills from both the mold assessor and the mold remediator prior to being made aware there is a potential mold claim. If an insurer elects not to dispute artificially inflated or unwarranted costs and merely pay the claims, tremendous added costs will be passed on to policyholders. If an insurer does elect to dispute the inappropriate charges they will be faced with suits filed on behalf of the assessor, which again results in increased costs to the homeowner.

"The members of the Florida Property & Casualty Association (FPCA) are certain these rules will unnecessarily contribute to increased insurance premiums to Florida homeowners while simultaneously reducing the amount of coverage available to pay for legitimate repairs," said FPCA Executive Director William Stander. "There is the potential for mold assessors' costs to be so high that there is nothing left for the homeowner to pay for the actual mold remediation. This is scary," added Stander. 

The mold assessors would use assignments of benefits resulting in added costs to every water damage claim. Additionally, mold remediation companies are proposing regulations to allow for an assignment of benefits on every water loss claim and to permit payment on every water claim for immediate mold testing and assessment. In addition, the new regulation would give mold assessors the authority to direct all water extraction efforts.

"This catch 22 is abundantly visible in Florida's assignment of benefits (AOB) issue presently driving tens of millions of dollars of costs to homeowners," said Stander.

On September 5, 2014, a workshop on the proposed new regulations was held and included representatives from the insurance and mold remediation industries. At that time, the participating insurance executives voiced the need to establish a trigger or threshold for a mold assessor to be involved in a water damage situation. The mold remediation industry argued that water and mold go together and assessments should be done to determine the presence of mold in any situation. This clearly demonstrates the potential for abuse and the need for limits.

These rules place no burden on the mold assessor to outline a specific and precise protocol for mold remediation as is required in states such as Texas. Furthermore, the rules do not require the assessor to file the protocol with local governmental building inspectors.

"In effect, the rules do not separate the mold assessor from the contractor, which is an inherent conflict of interest," explained Stander. "Without the above 'inspected and approved' protocol the contractor is free to perform any work he chooses in the absence of a filed, approved, and inspected plan," he added. 

The FPCA is recommending that DBPR consider "visible suspected mold growth" and require testing prior to mold remediation, as well as testing for mold after the repairs have been completed.

The department should also consider the impact of this rule on homeowners who have internal limits on mold coverage in their policy. In most instances the coverage will be expended by the assessor, contractor, and others leaving little, less, or no coverage available for the homeowner.

The FPCA respectfully suggests that the DBPR review the Texas Mold Assessment and Remediation Rules, which were adopted in May 2007. Under their provisions, mold assessment and removal is treated similarly to asbestos. Permits and inspections are required. Additionally, the Texas rules require licensure and oversight of the parties involved. Our members believe these are important aspects that should be considered as part of the Department's rules.

EDITOR'S NOTE: The FPCA submitted its comments to the DBPR in anticipation of the upcoming formal hearings scheduled for February 12, 2015.

ABOUT THE FPCA: The Florida Property & Casualty Association (FPCA) is an industry trade group comprised of Florida-based insurance companies and consulting firms doing business in the Florida market. Established in 1997, the organization seeks to promote a healthy, competitive insurance market in the State of Florida. Through its lobbying and communications teams, the FPCA works to educate Florida lawmakers, government regulators and consumers on issues and policies that affect property and casualty insurance. The FPCA is also a leading source for timely information on insurance legislation and regulation, as well. For more information, visit www.fpcaonline.org.

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