CS/CS/CS/SB 408 Temporarily Postponed in House on Second Reading; Strike-All Filed

After CS/CS/CS/SB 408 was temporarily postponed by the House on Second Reading today, May 3, 2011, a strike-all amendment was filed to the bill, which is on today’s House Special Order calendar.

Provisions contained within this strike-all amendment are listed below:

• A five-year statute of limitations on property insurance claims running from date of loss
• Florida Hurricane Catastrophe Fund reimbursement details
• Allow surplus note renegotiation
• Capital and surplus requirement 
• Public adjuster reforms – limiting payment to 20 percent, advertising restrictions, insurer’s representative must provide 48 hours’ notice
• Three-year notice of windstorm claim filing deadline
• Expedited rate filing for all reinsurance – Amount allowed increased to 15 percent, deletes provisions that state profit load and expenses cannot be included 
• Rate filing certification not rendered false if supplemental information was provided
• Specifies that the Florida Public Model must charge private insurers a reasonable cost
• Citizens Property Insurance Corporation (“Citizens”):
  • Public Adjusters cannot make more than 10 percent of additional amount paid over original offer by Citizens
  • Changes name of Citizens High-Risk Account to “Coastal”
  • Surcharges are payable at cancellation or termination of policy
  • Outsources certain functions
  • Cannot cover appurtenant structures in sinkhole coverage
  • Agent must get a signed form that insured is aware of surcharges/assessments
  • Conflict of interest provisions for Citizens Board members
  • Exempts sinkhole from the 10 percent glide-path
• Reduces time for notice of cancellation to 120 days from 180 (allows Citizens to have 45 days for take outs)
• Cancellations/Nonrenewal at 45 days if OIR determines solvency problems
• Allows changes in coverage by a “Notification of Change in Policy Terms”
• Senate ACV/RCV proposal – ACV on dwelling and offer two types of contents RCV – one with a holdback and one without
• Sinkholes:
  • Provides findings and intent – states that this legislation is clarifying
  • Must provide Catastrophic Ground Collapse
  • Shall make available sinkhole
  • Specifically allows for inspections
  • May restrict coverage to the principle building
  • Defines neutral evaluation and evaluator
  • Structural damage defined as:
    • Interior floor displacement
    • Foundation misplacement
    • Leaning/buckling of exterior load bearing walls
    • Damage where the building is in imminent danger of collapse
    • Damage occurring after October 15, 2005 that qualifies as “substantial structural damage” as defined in the Florida Building Code – provides definitions
    • Two-year claims filing deadline from when insured had constructive knowledge of damage (known or should have known)
  • Requires insured to pay 50 percent of costs of testing or $2,500, whichever is less – subject to reimbursement if a sinkhole is present
  • Repairs must be made pursuant to recommendations made by insurer’s report
  • 90 days time limit to commence repairs – tolled if neutral evaluation in invoked
  • Repairs must be completed within 12 months, except in certain circumstances
  • Rebates prohibited and void coverage
  • Requires policyholder to file sinkhole report before payment for sinkhole loss
  • After repairs the engineer must file report after completion of repairs
  • Clarifies neutral evaluation process
  • Clarifies that the insurers is not liable for attorney fees unless policyholder gets a more favorable judgment than what was issued by neutral evaluator
  • Prohibits the Florida Insurance Guaranty Association (FIGA) from paying attorneys’ fees or public adjuster fees
  • Severability clause
  • Effective date is upon becoming law

Should you have any comments or questions, please contact Colodny Fass.