Senate Bill Report - SB 6178 Post-Loss Assignment of Benefits in Property Insurance (January 19, 2026)
Summary
Senate Bill Report on SB 6178 (prohibiting the post-loss assignment of benefits in property insurance), as of January 19, 2026, for the Senate Committee on Business, Trade & Economic Development. The sponsors are Senators Hunt, Cortes, Frame and Nobles. The summary says the bill prohibits a person from soliciting, coercing, requiring, or contracting with an insured to enter into such an assignment agreement, which is void and unenforceable, with exceptions such as a licensed public adjuster and an attorney. It states that the Office of the Insurance Commissioner may issue a cease-and-desist order, bring an action for injunctive relief, and impose a fine of $50,000 per violation. The report lists Appropriation: None and a fiscal note requested on January 14, 2026.
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“Senate Bill Report - SB 6178 Post-Loss Assignment of Benefits in Property Insurance (January 19, 2026).”
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SENATE BILL REPORT
SB 6178
As of January 19, 2026
Title: An act relating to prohibiting the post-loss assignment of benefits in property insurance.
Brief Description: Prohibiting the post-loss assignment of benefits in property insurance.
Sponsors: Senators Hunt, Cortes, Frame and Nobles; by request of Insurance Commissioner.
Brief History:
Committee Activity: Business, Trade & Economic Development: 1/21/26.
Brief Summary of Bill
• Prohibits a person from soliciting, coercing, requiring, or contracting
with an insured to enter into an agreement to assign or transfer a post-
loss property insurance benefit from the insured to the person.
• Specifies the scope of, and exceptions from, the restriction.
• Authorizes the Office of the Insurance Commissioner to enforce
violations of the restriction.
SENATE COMMITTEE ON BUSINESS, TRADE & ECONOMIC DEVELOPMENT
Staff: John Kim (786-7453)
Background: According to the National Association of Insurance Commissioners, an
assignment of benefits (AOB) is an agreement signed by a policyholder that allows a third
party, such as a repair company, to act on behalf of the insured and seek payment from the
insurer. An AOB allows the third party to deal directly with the insurer in negotiating
repairs and issuing payment directly to the third party without the policyholder's
involvement. An AOB also assigns the policyholder's rights and benefits in resolving a
claim to the third party, including the right to sue after a denial and mediate the claim.
This analysis was prepared by non-partisan legislative staff for the use of legislative
members in their deliberations. This analysis is not part of the legislation nor does it
constitute a statement of legislative intent.
Senate Bill Report -1- SB 6178
Current state law does not specifically address the assignment of benefits under property
insurance policies.
Summary of Bill: The bill prohibits a person from soliciting, coercing, requiring, or
contracting with any insured to enter into an assignment agreement, in whole or in part,
whereby any post-loss insurance benefit under any property insurance coverage is assigned
or transferred from the insured to the person. Such assignment agreement is void and
unenforceable.
This restriction does not apply to any of the following:
• an insured retaining the services of a licensed public adjuster under a written
agreement to represent solely the policyholder's financial interest on the loss;
• an insured retaining the services of an attorney under a written agreement that
compensates the attorney based on a percentage of a monetary recovery as permitted
by the rules of professional conduct;
• an assignment, transfer, pledge, or conveyance granted to a federally insured financial
institution, mortgagee, or subsequent purchaser of the property; or
• liability coverage under a personal or commercial line insurance policy.
The restriction also does not prohibit an insured from authorizing or directing payment to,
or paying, a person for services, materials, or any other thing which may be, or is, covered
under an insurance policy.
If the Office of the Insurance Commissioner (OIC) has cause to believe that any person has
violated the restriction, the OIC may issue a cease-and-desist order, bring an action for
injunctive relief, and impose a fine of $50,000 per violation. Any fine collected by the OIC
for such violation must be paid to the state treasurer for the account of the general fund.
The following terms are defined:
• assignment agreement means any instrument, by which post-loss benefits under any
property insurance coverage including, but not limited to, any right of action against
the insurer or any proceeds acquired from the insurer, are assigned or transferred to a
person providing services to the insured including, but not limited to, inspecting,
protecting, repairing, restoring, constructing, or replacing the insured's property or
mitigating the insured's property against further damage;
• property insurance is insurance against loss of or damage to real or personal property
of every kind and any interest therein, from any or all hazard or cause, and against
loss consequential upon such loss or damage; and
• public adjuster means an adjuster employed by and representing solely the financial
interests of the insured named in the policy.
Appropriation: None.
Fiscal Note: Requested on January 14, 2026.
Senate Bill Report -2- SB 6178
Creates Committee/Commission/Task Force that includes Legislative members: No.
Effective Date: Ninety days after adjournment of session in which bill is passed.
Senate Bill Report -3- SB 6178
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