Florida Legislation Allows Insurers and Agents to Offer Loss-Related Goods and Services

By Wes Strickland and Michael Billmeier

During the 2019 session, the Florida Legislature passed a bill amending the Unfair Insurance Trade Practices Act to allow insurers and insurance agents to offer or give to insureds goods and services that relate to loss control or loss mitigation with respect to the risks covered under the policy. The Governor signed the bill (CS/CS/CS/HB 301) on June 19, 2019, and it has been codified as chapter 2019-108, Laws of Florida, effective July 1, 2019.

Section 626.9541(1)(m), Florida Statutes, related to advertising and promotional gifts, was amended in 2018 to allow insurers or agents to give “to insureds, prospective insureds, or others any article of merchandise, goods, wares, store gift cards, gift certificates, event tickets, anti-fraud or loss mitigation services, or other items having a total value of $100 or less per insured or prospective insured in any calendar year.”

The 2019 legislation adds a new subsection (5) to Section 626.9541, Florida Statutes, which provides that Section 626.9541 “does not prohibit an insurer or agent from offering or giving to an insured, for free or at a discounted price, services or other merchandise, goods, wares, or other items of value that relate to loss control or loss mitigation with respect to the risks covered under the policy.”

The bill does not define “loss control” or “loss mitigation.” Analyses by House and Senate staff explained that loss control devices “could include things such as sensors that sound an alarm when the environment around high-value art exceeds set temperature or humidity levels or when a leak is detected” and that loss mitigation services “may include remediation of hazardous conditions or temporary secured storage.” While analyses by House and Senate staff are considered persuasive when interpreting a bill, they are not binding on the courts or the Department of Financial Services.

It appears that “loss control” and “loss mitigation” goods and services provided to insureds by insurers and agents will not be subject to the $100 per calendar year limit, provided that such goods or services relate to the mitigation of risks covered under the policy. For example, a home fire alarm may not be subject to the $100 limit if the device is given to an insured by an insurer or agent in connection with issuance or renewal of a homeowners’ insurance policy that covers the peril of fire. However, the $100 limit may apply to a home fire alarm if it is given to the insured in connection with the issuance or renewal of an automobile insurance policy that does not provide any coverage for the home.

Insurers and agents would be well-served by consulting the Department of Financial Services or regulatory counsel before offering free or discounted loss mitigation goods or services to ensure compliance with the provisions of the new law described above.

About the Authors
Wes Strickland is a Shareholder at Colodny Fass and heads the firm’s Insurance Regulatory & Transactions Practice in Tallahassee, Florida. He can be reached at (850) 321-3475 or wstrickland@colodnyfass.com. Michael Billmeier is a Partner in the firm’s Insurance Regulatory & Transactions Practice Group and its Governmental Consulting Practice Group. He can be reached at 850-701-3113 or mbillmeier@colodnyfass.com.