Florida Insurance Credit Card Payment Surcharge Legality Could Hinge on U.S. Supreme Court Action - Colodny Fass

Florida Insurance Credit Card Payment Surcharge Legality Could Hinge on U.S. Supreme Court Action

Date Published: 07-08-2016


In a case of potential significance for insurers that accept credit card payments for insurance premiums, Florida Attorney General Pam Bondi asked the U.S. Supreme Court to hear a case involving the constitutionality of s. 501.0117(1), F.S., which prohibits businesses-including insurance companies-from imposing surcharges on customers who pay with credit cards and allows discounts for using other methods of payment, such as cash.  The 11th U.S. Circuit Court of Appeals ruled last year that the law is unconstitutional, inasmuch as it violates the First Amendment.

In her petition filed with the U.S. Supreme Court on June 6, 2016, the Florida Attorney General noted that the 2nd Circuit Court of Appeals recently upheld a similar law in New York.  The 5th Circuit Court of Appeals also upheld a related Texas law.  Stating that the U.S. Supreme Court's review is necessary to resolve the conflict between the U.S. Circuit Courts of Appeals, the petition presented the question of whether s. 501.0117, F.S. is an unconstitutional free speech restriction or if the law regulates only conduct and does not implicate the First Amendment.

While s. 627.4035, F.S. allows for the payment of insurance premiums by credit card, the challenged section of Florida law prohibits insurers from surcharging insureds who use credit cards to pay for insurance premiums.

The U.S. Supreme Court has not yet agreed to hear the petition, but if the 11th Circuit's opinion is upheld, it would pave the way for insurers to begin imposing a surcharge for the use of credit cards for the payment of insurance premiums. 

Responses to the petition are due by August 8, 2016. 

Colodny Fass will continue to track and analyze this case, and report future developments.


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