The Florida Legislature is hurtling towards the end of its 3-month Session. The budget has been finalized (for the most part) and it appears that this Friday will be the final day of Session. As a result, legislators are in overdrive considering bills that dramatically affect policyholders. I have compiled a list of bills that are currently still under consideration with a short summary attached. If you do not see an issue or bill on this list, the grim reaper has already visited that issue or bill. If you have specific questions about an issue or bill, feel free to email me at sshaw@merlinlawgroup.com.

CS/HB 129 – Sinkhole Coverage

General Bill by Regulatory Affairs Committee and Raburn (CO-SPONSORS) Campbell

Sinkhole Coverage: Requires Citizens Property Insurance Corporation to submit biannual report on number of residential sinkhole policies requested, issued, & declined & reasons for declining coverage; requires corporation to establish Citizens Sinkhole Stabilization Repair Program for sinkhole claims; prohibits corporation from requiring policyholder to advance payment for stabilization repairs provided under program; provides requirements & procedures for selecting stabilization repair contractors to conduct stabilization repairs; requires stabilization repairs to be conducted pursuant to contract; provides requirements for such contracts; requires policyholder to select contractor from pool within certain time period; specifies additional requirements with respect to program; requires corporation to offer specified deductible amounts for sinkhole loss coverage; requires OPPAGA to conduct study of program & submit report to Governor, CFO, & Legislature; provides severability. Effective Date: July 1, 2014

The bill establishes a Citizens Sinkhole Repair Program which must be operational by March 31, 2015. The program established by the bill utilizes approved repair contractors to ensure sinkhole repairs are completed on property insured by Citizens. The Citizens Sinkhole Repair Program established under the bill is not substantially different than the program currently proposed by Citizens. The primary difference is that participation in the program established by the bill is mandatory, whereas the current program is voluntary. The bill specifies that sinkhole repairs under the program are not an election to repair and therefore do not imply or create a new contractual relationship under the terms of the insurance policy. Please click here for more specifics.

House passed the bill; Senate has not voted yet. Likely to die in the Senate. If it fails in the Senate, it will NOT become law.

CS/CS/SB 424 – Discriminatory Insurance Practices

General Bill by Appropriations and Criminal Justice and Lee (CO-SPONSORS) Latvala
Discriminatory Insurance Practices: Providing that unfair discrimination on the basis of gun ownership in the provision of personal lines property or personal lines automobile insurance is a discriminatory insurance practice; clarifying that insurers are not prevented from charging supplemental premiums or sharing information between an insurer and its agent if a separate rider has been requested, etc. Effective Date: 07/01/2014

The bill amends s. 626.9541, F.S., by providing that it is an unfair discriminatory practice and, therefore, a prohibited act under part IX of chapter 626, F.S., for a personal lines property or personal lines automobile insurer to:

  • Refuse to issue, renew, or cancel a policy or charge an unfairly discriminatory rate based on the lawful ownership, possession, or use of a firearm or ammunition by the applicant, insured, or a household member of the applicant or insured. Under current law, the use of an unfairly discriminatory rate is prohibited.
  • Disclose the lawful ownership or possession of firearms of an applicant, insured, or household member of the applicant or insured to a third party or an affiliated entity unless the insurer discloses to the applicant or insured the specific need to disclose the information and the applicant or insured expressly consents to the disclosure. Currently, insurers and other specified entities are allowed to share information with affiliates; however, consumers have the right to “opt-out” of disclosures to nonaffiliated third parties, subject to some exceptions.

Click here for more specifics.This bill has been passed by both houses and is awaiting signature by the Governor.

CS/CS/CS/SB 542 – Flood Insurance

General Bill by Banking and Insurance and Appropriations and Banking and Insurance and Brandes (CO-SPONSORS) Simpson; Benacquisto; Galvano; Bradley; Latvala; Bean; Flores; Evers; Stargel; Garcia; Diaz de la Portilla; Hays; Thrasher; Grimsley; Richter; Lee; Detert

Flood Insurance: Adding projected flood losses to the factors that must be considered by the Office of Insurance Regulation in reviewing certain rate filings; authorizing insurers to offer flood insurance on residential property in this state; authorizing the office to conduct an examination with respect to any rate change; prohibiting Citizens Property Insurance Corporation from writing flood insurance, etc. Effective Date: Upon becoming a law

The bill creates laws governing the sale of flood insurance policies, contracts, and endorsements by authorized insurers. The bill requires insurers that write flood coverage to provide coverage for “flood” as currently defined by the NFIP. The bill also permits insurers to expand flood coverage to include water intrusion originating from outside the structure which is not otherwise covered within the definition of flood provided in the bill and as also defined by the NFIP. Water intrusion, if offered, is defined by the insurance policy. Please click here for more specifics.

This bill has been passed by both houses and is awaiting signature by the Governor..

CS/CS/HB 565 – Insurance

General Bill by Regulatory Affairs Committee and Insurance & Banking Subcommittee and Santiago (CO-SPONSORS) Rouson; Van Zant

Insurance: Authorizes local government units to contract with certain corporations not for profit for insurance; revises original appointment & renewal fees related to certain insurance representatives; revises specified time period applicable to certified examination that must be filed by foreign or alien insurer applying for certificate of authority; prohibits an insurance agency from conducting insurance business at location without designated agent in charge; provides agency license requirements; revises qualifications for approval as mediator by DFS; provides grounds for department to deny an application, or suspend or revoke approval of mediator or certification of neutral evaluator; authorizes department to adopt rules; authorizes electronic transfer of unearned premium under specified circumstances; revises date by which title insurance agencies & certain insurers must annually submit specified information to OIR; requirements relating to contractual liability policies that insure warranty associations; provides effective dates. Effective Date: July 1, 2014

The bill makes various changes which include:

  • the alternative dispute programs administered by the Department of Financial Services (DFS) for property, sinkhole, and automobile insurance claims;
  • use of hurricane loss models in property insurance rate filings;
  • the notification period for property insurance nonrenewals, cancellations, or terminations;
  • insurance post-claim underwriting;
  • electronic delivery of insurance policies to policyholders;
  • notification to policyholders of a change in the terms of their insurance policy;
  • disqualification of an appraisal umpire in residential property insurance;
  • the consumer representative on the Board of Governors of Citizens Property Insurance Corporation (Citizens);
  • annual reports relating to Citizens and the Florida Hurricane Catastrophe Fund (FHCF);
  • independent verification of mitigation discount forms and Citizens’ reinspection of property to verify mitigation.

Please click here for more specifics.

House passed the bill; Senate has not voted yet. Unsure as to whether the Senate will pass this bill.

CS/CS/SB 708 – Insurance Claims

General Bill by Appropriations and Banking and Insurance and Bean
Insurance Claims: Providing that a claim for residential property insurance cannot be denied based on certain credit information; providing that a policy or contract may not be cancelled based on certain credit information; providing grounds for challenging an umpire’s impartiality in estimating the amount of a property loss; establishing a Homeowner Claims Bill of Rights for residential property insurance policyholders, etc.
Effective Date: Except as otherwise expressly provided in this act, this act shall take effect July 1, 2014

CS/CS/SB 708 revises the law relating to property insurance claims. The bill gives the Department of Financial Services (DFS) the ability to investigate mediators and neutral evaluators in a manner similar to how it investigates agents and agencies. It allows the DFS and the Office of Insurance Regulation (OIR) to share information with other regulatory bodies while any investigation is ongoing. The bill gives the DFS increased power to take disciplinary action against mediators and neutral evaluators. The bill prohibits insurers from denying claims or canceling an insurance policy or contract based on credit information available in the public record if the insurance policy or contract has been in effect for more than 90 days. Insurance contracts often contain an appraisal provision allowing parties who agree that there is a covered loss to use an umpire to determine the amount of the loss. This bill allows parties to disqualify an umpire for specified conflicts of interest such as where the umpire is related to one of the parties or has been employed by one of the parties. The bill creates a “Homeowner Claim Bill of Rights,” describing some of the rights held by insurance policyholders and requires the insurer to provide a copy to the policyholder within 14 days of a claim. It does not create a new civil cause of action. This bill creates new requirements for agreements between insureds and providers of services needed to mitigate the damage caused by fire, water, or catastrophic events. Please click here for more specifics.

This bill has been passed by both houses and is awaiting signature by the Governor.

CS/CS/SB 1672 – Property Insurance

General Bill by Rules and Commerce and Tourism and Banking and Insurance
Property Insurance: Providing additional grounds for refusing, suspending, or revoking a license or appointment of an insurance agent, adjuster, customer representative, or managing general agent based on the acceptance of payment for certain referrals; prohibiting a public adjuster or public adjuster apprentice from choosing the persons or entities that will perform repair work; postponing the date that new construction or substantial improvement is not eligible for coverage by the Citizens Property Insurance Corporation, etc. Effective Date: Except as otherwise expressly provided in this act, this act shall take effect July 1, 2014

The bill makes various changes which include:

  • Prohibits an insurance agent, managing general agent, adjuster, customer or service representative from accepting referral fees or compensation from an inspection or inspection company related to an inspection used to obtain insurance coverage or establish the insurance premium.
  • Prohibits a public adjuster, apprentice or associate from accepting a power of attorney that vests to the right to select the person that will perform repairs on an adjusted property.
  • Directs Citizens to include commercial residential buildings within the Citizens policyholder eligibility clearinghouse program (clearinghouse) by October 1, 2015.
  • Allows surplus lines insurers to make offers of similar coverage through the clearinghouse if no authorized insurers participating in the clearinghouse make an offer of coverage.
  • Requires surplus lines insurers participating in the clearinghouse meet enhanced financial and disclosure requirements.
  • Prohibits an authorized mitigation inspector from paying any referral fees or other forms of compensation to an insurance agent, broker, or insurance agency employee that recommends the inspector’s services to an insured.
  • Prohibits an insurance agent, broker, or insurance agency employee from accepting any referral fees or other forms of compensation from an authorized mitigation inspector.
  • Allows an insurer to exempt from independent verification, a uniform mitigation verification form completed by an authorized mitigation inspector that has a quality assurance program approved by the insurer.
  • Provides that a uniform mitigation verification form provided to Citizens and completed by an authorized mitigation inspector with a quality assurance program approved by Citizens is not subject to independent verification or re-inspection if there has been no material change to the structure.
  • Prohibits contractors from providing deductible rebates to an insured, making such acts a 3rd degree felony.

Please click here for more specifics.

House has passed the bill and sent back to the Senate; the Senate has not voted yet. Unsure as to whether the Senate will pass this bill.

CS/CS/HB 1089 – Citizens Property Insurance Corporation

General Bill by Regulatory Affairs Committee and Insurance & Banking Subcommittee and Raschein
Citizens Property Insurance Corporation: Extending the date after which certain structures cease to be eligible for coverage by the corporation; providing that a condominium is deemed ineligible for commercial residential wind-only coverage under certain conditions, etc. Effective Date: July 1, 2014

The bill delays implementation of the current law for Citizens’ eligibility based on location of the property for one year. Thus, major structures for which a building permit for new construction is applied for on or after July 1, 2015, rather than July 1, 2014, or for which a building permit for a substantial improvement of the structure is applied for on or after July 1, 2015, rather than July 1, 2014, and which is located seaward of the coastal construction control line or within the CBRS will be ineligible for insurance in Citizens. Please click here for more specifics.

This bill has been passed by both houses and is awaiting signature by the Governor.

CS/CS/HB 633 – Division of Insurance Agents & Agency Services

General Bill by Regulatory Affairs Committee and Insurance & Banking Subcommittee and Ingram (CO-SPONSORS) Rouson; Van Zant
Division of Insurance Agents & Agency Services: Revises name of Division of Insurance Agents & Agency Services; revises original appointment & renewal fees related to certain insurance representatives; provides requirements relating to agents in charge; prohibits an insurance agency from conducting insurance business at certain locations; revises licensure requirements & penalties; revises requirements relating to applications for insurance agency licenses; revises scope of examination for limited agent; requires department to suspend certain licenses & appointments; revises prohibition against unlicensed transaction of life insurance; revises requirements for licensure of nonresident surplus lines agents; revises qualifications for approval as mediator; authorizes DFS to adopt rules; prohibits persons seeking to be licensed by division from denying or failing to acknowledge certain expunged or sealed records. Effective Date: July 1, 2014.

The bill makes various changes which include:

  • Amends eligibility requirements for mediators under alternative dispute resolution programs administered by DFS; requires DFS to deny an application to be a mediator or neutral evaluator (sinkhole claims) or revoke or suspend a mediator or neutral evaluator in certain circumstances.
  • Authorizes DFS to investigate improper conduct of mediators, neutral evaluators, and navigators. Permits DFS to share investigative information with any regulatory agency.

Please click here for more specifics.

This bill has been passed by both houses and is awaiting signature by the Governor.

CS/CS/SB 1260 – Insurance

General Bill by Appropriations and Banking and Insurance and Brandes (CO-SPONSORS) Soto
Insurance: Revising requirements for corporations not for profit to qualify to form a self-insurance fund; revising original appointment and renewal fees related to certain insurance representatives; providing licensure exemptions that allow specified individuals or entities to conduct insurance business at specified locations under certain circumstances; revising provisions for unfair methods of competition and unfair or deceptive acts relating to conducting certain insurance transactions through credit card facilities; providing that certain dividends may be retained by the joint underwriting plan for future use, etc.

The bill makes various changes which include:

  •  Provides the Department of Financial Services (DFS) with additional authority to regulate mediators, navigators, and sinkhole neutral evaluators;
  • Provides the DFS with an additional ground to deny, suspend, revoke, or refuse to renew a license for an insurance agent, adjuster, customer or service representative, or managing general agent;
  • Deletes the requirement that representatives of an insurer must provide at least 48 hours’ notice to the insured before scheduling a meeting or conducting an onsite inspection ofthe insured property;
  • Prohibits insurers from denying residential property insurance claims on the basis of credit information that is publicly available if the insurance policy has been effective for more than 90 days;
  • Establishes a uniform 120 day advance written notice of nonrenewal, cancellation, or termination for personal and commercial lines residential property insurance policies;
  • Allows a policyholder to elect electronic delivery of policy documents;
  • Allows a Notice of Change in Policy Terms to be sent separately from the Notice of Renewal Premium;
  • Creates conflict of interest standards for appraisers in residential property insurance claims;
  • Specifies instances when an insurer need not provide notice of the availability of sinkhole neutral evaluation;
  • Allows insurers to exempt uniform mitigation verification forms from independent verification under certain circumstances and prohibits Citizens Property Insurance Corporation from subjecting such forms to additional verification in certain circumstances;

Please click here for more specifics.

This bill has not been voted on by either chamber, it will likely not pass.