Fla. Okays Lawyer Info Form For Insureds

Drafted by the Florida Bar Association with input from insurer groups, the statement was actually prepared two years ago, but only yesterday received action.

Asked about the delay, Julie Pulliam, a representative for the Washington-based American Insurance Association, which supported the new form, said that changes for rules governing the Florida bar "are put in a package and all submitted at the same time, and it's just the way the court works. It's been sitting up there."

The form provides information, which details the so-called "tripartite relationship" between insured, insurer, and the defense attorney.

A portion of the statement tells insureds that if their policy, "like most insurance policies, provides for the insurance company to control the defense of the lawsuit, the lawyer will be taking instructions from the insurance company. Under such policies, the lawyer cannot act solely on your instructions, and at the same time, cannot act contrary to your interests. Your preferences should be communicated to the lawyer."

Katherine Giddings, AIA national coordinating counsel for litigation, noted

that Florida already uses a statement of rights for plaintiffs' attorneys. She said the new form for defense lawyers "is a similar statement–it's the other side of the equation."

AIA supports it, she said, because "it provides policyholders with useful information." Ms. Giddings noted that when the Bar Association examined insurance company hiring of defense counsel for an insured, it had found no problems with the two-client situation.

"Florida becomes the first state in the nation to require that policyholders be informed of their rights and responsibilities when sued under a liability insurance policy defended by an insurer-hired attorney representing the common interests of policyholder and insurer," said Ms. Giddings.

AIA said its organization and the Florida Insurance Council had filed comments with the court advocating adoption of the disclosure statement, and pointing out the difficult and meticulous work that had gone into developing a fair statement that informs policyholders about the tripartite relationship.

The development of the Statement of Insured Client's Rights began in 1999 when the Florida Bar formed the Insurance Practices Special Study Committee to review insurer litigation management practices.

At the conclusion of its review, the IPSSC's key recommendation was that a disclosure statement for policyholders be developed. AIA said it worked closely with the IPSSC in crafting "a meaningful disclosure statement that provides important information to policyholders without jeopardizing the rights and obligations of insurers and insureds under insurance policies, and without undermining existing Florida insurance law."

After the unanimous approval by the Florida Bar's Board of Governors, the Statement of Insured Client's Rights was presented for approval to the Florida Supreme Court last fall. With yesterday's approval, all insurance defense attorneys defending personal injury and property damage claims must begin providing the disclosure statement to policyholder clients in Florida.