Florida Senate, House Take Up High-Profile Insurance Bills

 

Several high-profile insurance-related bills were on the Florida Senate’s Committee on Banking and Insurance (“Committee”) agenda today, March 23, 2015, including proposals on Citizens Property Insurance Corporation (“Citizens”), assignment of benefits and insurance for Transportation Network Companies (“TNCs”).

As part of the agenda, Senator Dorothy Hukill presented SB 1064, which would amend 627.422, F.S. to provide that post-loss benefits provided under an insurance policy may or may not be assignable according to the policy terms.  She also offered an amendment to the bill, which was followed by Senator Joe Negron proposing an amendment to the amendment that would allow an insurance policy to prohibit post-loss assignment of benefits, but allow a policyholder to assign the benefit of payment in the following circumstances:

• Up to $3,000 to a person or entity mitigating or repairing damage arising from a covered loss
• To compensate a public adjuster for compensation due from a policyholder, but not for other benefits under the under the policy
• To an attorney representing the policyholder, but only if the assignment provides that benefits are to be paid to the attorney for disbursement of the funds by the attorney to repair the property at the direction of the policyholder

The Negron amendment would also allow a public adjuster apprentice to solicit contracts for a supervisory public adjuster under the “general supervision” of that supervisory public adjuster, rather than under direct supervision.  This provision also would prohibit the public adjuster apprentice from soliciting contracts for natural disaster claims within 30 days after the event, except under direct supervision of the supervisory public adjuster. 

The Committee adopted the Negron amendment.

A representative of a roofing contractors association spoke in favor of SB 1064 as amended, as did representatives of public adjuster associations.

Several speakers from water restoration and remediation companies, as well as individual roofers spoke in opposition of SB 1064 as amended.  Most stated that prohibiting or limiting the ability of a policyholder to assign their benefits would take control away from the consumer.  They argued that dealing with insurance companies is a complex process and that they as providers actually assist the policyholder in doing so.

Several consumers were on hand to share their personal experiences. 

Representatives of the insurance industry spoke in favor of the bill, as did a representative of a business organization.

Senator Nancy Detert voiced her support of the bill. 

In her closing, Senator Hukill noted that nothing in the amended version of SB 1064 would prevent a vendor from assisting a policyholder, adding that the bill even offers certain vendor protections. 

SB 1064 was approved as a Committee Substitute by a vote of 8 to 1, with Senator Chris Smith voting against it.

Next on the agenda, Senator Anitere Flores presented SB 1006, which would require that, before any policy can be taken out of Citizens, the takeout agreement must meet the following criteria:

• Approval by the Florida Office of Insurance Regulation (“OIR”)
• An insurer explanation of the differences in coverage and rate
• An affirmative consent from the policyholder obtained by the insurer
• A prohibition on policy rate increases of more than 10 percent for three one-year renewal terms

An amendment was adopted to the bill requiring that, in addition to OIR approval and an explanation of coverage differences, the agreement must provide that when a policyholder declines a takeout offer, it must be excluded from future takeout offers for six months.  A policyholder who is taken out of Citizens could then re-apply for coverage from Citizens if the rate on that policy is increased more than 10 percent.

A Citizens representative on hand stated that the State-run insurer would continue to work with Senator Flores on language in SB 1006.  A speaker from a business group spoke in opposition to it.

SB 1006 was passed unanimously as amended.

Senator David Simmons presented SB 1298, which would create insurance requirements for short-term rental and TNCs to the Committee.  Representatives of the insurance industry supported the bill, while TNC representatives opposed it.  Under the provisions of SB 1298, which passed unanimously today, but must still be heard by two more committees, a TNC driver or company would be required to have liability coverage of at least $125,000 for death and bodily injury, at least $50,000 for property damage and at least $250,000 in uninsured and underinsured motorist coverage.  When a passenger is in a TNC vehicle-known as the ride-acceptance period-the coverage would need to be at $1 million for death, bodily injury and property damage, and $1 million in uninsured and underinsured motorist coverage.

 

Senator Simmons also presented SB 830, which would expand the types of entities that are eligible to be members of a corporation not-for-profit self-insurance fund.  He also offered an amendment to the bill that would require an 80 percent confidence level for any new business entering the Florida Insurance Trust based on the change of law.  The amendment would give the OIR the authority to require corrective action plan if the confidence level falls below 80 percent.

The Committee adopted the amendment and passed SB 830 unanimously as a Committee Substitute.

SB 1088 relating to Civil Remedies Against Insurers by Senator Jeff Brandes was temporarily postponed.

To view today’s meeting packet, click here.

 

Florida House Takes Up Flood Insurance Expansion

At its March 17, 2015 meeting, the Florida House of Representatives’ Insurance and Banking Subcommittee (“Subcommittee) took up a Proposed Committee Substitute (“PCB”) for HB 895 by State Representative Larry Ahern relating to Flood Insurance.  Specifically, the proposal would:

• Create “flexible flood insurance,” which is defined as coverage for the peril of flood that may include water intrusion coverage, and includes or excludes specified provisions. Flexible flood policies must be acceptable to a mortgage lender if such policy, contract, or endorsement is intended to satisfy a mortgage requirement.
• Clarify the definition of “supplemental insurance” to permit coverage in excess over any other insurance covering the peril of flood.
• Authorize the OIR to require insurers to provide an appropriate return of premium to affected policyholders if the OIR determines a rate is excessive or unfairly discriminatory
• Allow an insurer to request a certification from the OIR that acknowledges that a private flood policy equals or exceeds the coverage offered by National Flood Insurance Program

The proposal was approved as a Committee Substitute.

Also during that meeting, State Representative Jay Fant presented HB 1053 relating to Motor Vehicle Insurance, which would allow policyholders to electronically sign uninsured motorist coverage waivers.  The bill also clarifies the use of the Medicare fee schedule under Personal Injury Protection insurance and would exempt leased vehicles from pre-insurance inspection requirements. 

Representative Fant offered a technical amendment to the bill, which was adopted without objection.  Also adopted was an amendment by State Representative David Santiago that allows the Florida Automotive Joint Underwriting Association to cancel motor vehicle policies in the first 60 days of coverage if the premium payment is rejected or deemed invalid.  It also would prohibit an insured from cancelling a policy with in the first 90 days unless ownership of the vehicle is transferred, or in cases of total destruction of the vehicle, or if another policy is purchased.  HB 1053 was approved as a Committee Substitute.

Along with three amendments, Representative Fant presented HB 1133, which revises the requirements relating to insurance agent licensing examination and education.  The amendments would:

• Allow examination exemptions for personal lines, life and health agents who have certain qualifying degrees, and restore current law relating to the examination exemption for all lines adjusters
• Revise the knowledge, experience, experience and instruction requirements applicable to life and health agents
• Removes bail bond agents from the bill

Representative Santiago also offered an amendment that defines the term “surrender” for the purpose of surrender of an annuity or life insurance policy and establishes a 14-day notice period for surrenders.  All amendments were adopted and HB 1133 was passed as a Committee Substitute.

 

The Subcommittee also approved a PCB for HB 1013 relating to Maximum Reimbursement Allowances for Workers’ Compensation Medical Services by State Representative Bill Hager.

Under the provisions of the bill, the maximum reimbursement rates approved by the Three-Member Panel would not be subject to legislative ratification.  The Florida Department of Financial Services (“DFS”) would be required to adopt the maximum reimbursement manuals approved by the Three-Member Panel by order, which would be subject to the notice, petition and hearing requirements of Florida’s Administrative Procedures Act.  Any substantially affected person would have the right to challenge the order.  Additionally, the final order would be subject to judicial review and those adversely affected by it would have the right to appeal.

State Representative John Tobia presented PCB for HB 669 relating to Insurance Claims, which clarifies that a property insurance policy may prohibit the assignment of post-loss benefits except in certain limited circumstances.  The bill clarifies that insurable interest does not survive assignment, except when assigned to a subsequent purchaser of covered property.  It also clarifies that any assignment or agreement that purports to assign to a contractor or subcontractor the authority to adjust, negotiate, or settle any portion of a claim is void.  The PCB also shortens the timeframes associated with property insurance claims, requiring insurers to fulfill certain duties related to property insurance claims quicker.

Further, HB 669 allows for limited instances in which an insured may assign benefits.  For example, the insured may assign benefit payments up to $3,000 to a vendor providing services or materials to mitigate or repair damage directly arising from a covered loss.  An assignment could also be made for the limited purposes of compensating a public adjuster, or for payment of an attorney representing the insured.

Several Subcommittee members raised concerns about HB 669’s shortened timeframes for claims handling, especially in instances of high claim volume, such as after a natural disaster or state of emergency.  Representative Tobia noted that he would continue to work with the stakeholders on those portions of the bill.

Representatives of various damage mitigation vendors spoke in opposition of HB 669, stating that their services are needed and they should be compensated.  Public adjusters and trial lawyer representatives spoke in opposition to it. 

Additionally, some members of the insurance industry and business associations noted that the shortened timeframes for claims handling could lead to bad faith lawsuits and drive up costs. 

Another speaker suggested that there were other ways to address this problem, perhaps through licensing other vendors.

HB 669 was approved by a vote of 10 to 3.

To view the meeting packet, click here.

 

 

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

 

 

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