State Bar Board Approves Policyholder Disclosure Rule.
The disclosure form, the first to be used in the U.S., is attracting the attention of other states, according to David Bianchi, chairman of the Insurance Practice Special Study Committee, who expects it will serve as a national model.
Members of the Bar's Citizens Forum voiced approval of the disclosure statement, Bianchi continued. "I'm very happy to tell you they loved it," he said. "Two of them had recently been sued in small auto accidents and they said they wished they had had this."
The form has also received the support of the American Insurance Association, which provided input to the IPSSC committee. "Florida thus becomes the first state in the nation to require that policyholders be informed of their rights and responsibilities when they are sued under a liability insurance policy, and their insurance company hires an attorney to defend the claim," according to Stef Zielezienski, AIA's senior counsel. "The board's vote serves to support insurers' goal of providing quality legal representation in these cases."
The National Association of Independent Insurers, based in Downers Grove, Ill., was more guarded in its acceptance. "Even though there are some aspects of the statement that are troublesome, the majority of the industry supports this endeavor and is hopeful that this will prohibit further ethics opinions from being introduced by the Florida Bar," said Kathleen Jensen, IRS Person for the NAII.
The IPSSC was formed in 1999 by the bar's Board of Governors to review insurer litigation management practices in the state. To fulfill its goals, the committee solicited comment from lawyers on issues such as whether insurers' litigation guidelines interfere with an attorney's responsibility to exercise independent professional judgment or create conflicts of interest. The committee also questioned whether insurance carriers disclose to their insureds the respective rights, duties and obligations of the carrier and the insured arising from the insurance contract when litigation is initiated against the insureds.
Following several months of study and information gathering, the committee determined that its primary recommendation was the development of a disclosure statement to give policyholders a better understanding of the relationship among the insurer, defense attorney and insured. As a result, Rule 4-1.8, concerning conflict of interest and prohibited and other transactions, now specifies that the Statement of Insured Client's Rights be provided to the insured at the beginning of legal representation.
"An insurance company has selected a lawyer to defend a lawsuit or claim against you. This Statement of Insured Clients Rights is being given to you to assure that you are aware of your rights regarding your legal representation. This disclosure statement highlights many, but not all, of your rights when your legal representation is being provided by the insurance company."
The document outlines 10 consumer concerns:
* Lawyer selection, information about the lawyer the client has a right to know and the lawyers responsibilities;
* Fees and costs;
* Directing the lawyer, who, under most insurance policies, takes instruction from the insurance company;
* Carrier claim litigation guidelines and how they affect the extent and level of legal services being provided;
* Confidentiality and a lawyer's duty to share with the insurance company information relating to defense or settlement of the claim;
* Conflicts of interest and when the insurance company may be required to provide a new lawyer;
* Settlement and the circumstances requiring client agreement;
* Client risk in the event that the case is lost;
* Circumstances under which a client must hire independent counsel; and
* Reporting violations of the clients' rights to the Florida Bar.
The Statement of Insured Client's Rights and implementing rule will be included in the package of proposed amendments to the Rules Regulating the Florida Bar, which will be presented for approval to the Florida Supreme Court in January 2001.
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|Date:||Jul 1, 2000|
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