TALLAHASSEE (CBSMiami/NSF) – The Florida Senate as early as Wednesday could give final approval to a plan that would overhaul the controversial insurance practice known as assignment of benefits.

Senators on Tuesday took up the House version of the bill (HB 7065), setting the stage for a final vote on the highest-profile insurance issue of the legislative session.

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Assignment of benefits, or AOB, is a decades-old practice in which policyholders sign over claims to contractors, who then pursue payment from insurance companies for work.

Insurers contend changes are needed because AOB has become riddled with fraud and litigation, driving up homeowners’ insurance rates.

Plaintiffs’ attorneys and many home-repair firms contend assignment of benefits helps ensure that insurers properly pay claims.

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The bill, which passed the House on April 11, includes limiting attorney fees in AOB disputes and allowing insurers to offer potentially lower-priced policies that would not allow assignment of benefits.

The Senate, in a 21-17 vote Tuesday, rejected a proposed amendment that would have required specific rate reductions for customers who accept policies that limit or do not allow assignment of benefits.

Sen. Janet Cruz, a Tampa Democrat who sponsored the amendment, warned of the bill offering a “false consumer choice” without meaningful rate savings. But Sen. Jeff Brandes, R-St. Petersburg, argued that numerous factors are used in setting insurance rates, including the costs of reinsurance, a type of backup insurance coverage for insurers.

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