Insurance-Related Legislative Bill Action–April 28

Apr 28, 2009

Above:  Joint Administrative Procedures Committee Chairman Bryan Nelson (R-Apopka) defends against an amendment to the Property and Cusualty Insurance bill CS/CS/CS/HB 1495

 

Insurance-related bill actions by the Florida Legislature today, April 28, 2009, included:

 

SB 742 relating to Sinkhole Losses

After unanimous passage in the Florida Senate on April 16, SB 742 relating to Sinkhole Losses was placed on the House Special Order calendar today, April 28, 2009, and substituted for HB 351 during second reading.  An attempt to amend SB 742 was defeated.

The House is expected to take up SB 742 on third reading and pass it within the next three days. Meanwhile, HB 351 has been “laid on the table,” which, essentially means that it has been substituted for another bill (in this case, SB 742).

If passed, SB 742 would allow insurers to non-renew policies in Pasco and Hernando counties and offer those policyholders renewals that exclude sinkhole coverage.  The bill also would require insurers to consider local ordinances relating to sinkhole mitigation when setting insurance rates, subsequent to a Florida Building Commission review of these ordinances’ effectiveness over a four-year period.

 

No Amendments Filed to Senate Workers’ Comp Bill On Second Reading

SB 2072 relating to Workers’ Compensation, which had been on the Senate Special Order calendar for two consecutive days, was heard on second reading today, April 28, as well.  No floor amendments were filed to the bill subsequent to previous committee revisions.

Previously, SB 2072 had been amended on April 15 by the Senate Committee on the Judiciary, which inserted language into the bill that repealed a statutory provision that currently makes it unlawful for a person to receive a fee, consideration, or gratuity for services rendered in a workers’ compensation case unless it is approved by a judge of compensation claims.  (A subsequent committee amendment to SB 2072 further refined the factors to be considered when determining a fee award).

This April 15 committee substitute to SB 2072 also revised the fee awards paid by employers and carriers for the claimant’s attorney and provided that they are to be calculated based on the following schedule: 25 percent of the first $5,000 of the amount of benefits secured, 20 percent of the next $5,000 of the amount of benefits secured, and 15 percent of the remaining amount of the benefits secured.

Further, SB 2072  was amended to provide that the fees for the claimant’s attorney may be increased up to the fee paid by the employer or carrier to the employer’s or carrier’s attorney, if it is determined that the employer or carrier engaged in bad faith denial of benefits.  The bill also prohibits carriers from recouping through the ratemaking process claimant attorney fees that they pay.

HB 903 relating to Attorney’s Fees in Workers’ Compensation Cases, is considered to be the House version of SB 2072.   As passed in the House on March 31 by a vote of 84-35, HB 903  removes statutory language providing for a “reasonable” attorney’s fee and specifies that fee awards cannot exceed the amount authorized by the statutory attorney’s fee schedule. Thus, attorney’s fees in workers’ compensation will be calculated in the manner they had been from the effective date of the 2003 reform up to the 2008 Florida Supreme Court decision in Murray v. Mariner Health.

A strike-all amendment was previously adopted to HB 903 that provided for attorney’s fees under a fee schedule to equal 20 percent of the first $5,000 of benefits secured as provided under current law. The amendment removed language that would have provided for a fee of “less than or equal to” 20 percent of the first $5,000 of benefits secured.

As of April 15, HB 903 remains in Senate Messages.

 

Senate “Open Rating” Bill Temporarily Postponed

Senate bill 2036 relating to Residential Property Insurance was temporarily postponed today in the Senate after two consecutive days on the Special Order Calendar.

Both SB 2036, and its House counterpart, HB 1171, would authorize certain insurers to use a rate in excess of the otherwise applicable filed rate and prohibit the consideration of certain policies by insurers when making a specified calculation.  The bills also would preserve the Florida Office of Insurance Regulation’s authority to disapprove rates as inadequate, or disapprove a rate filing for using an unlawful rating factor.

The bills would create a new section of Florida law that, permitting property insurers to offer residential property insurance policies covering the perils of windstorm or hurricane that use a rate in excess of the insurer’s filed rate, if, among other provisions, the following apply:

  • The insurer is authorized to write property insurance in Florida;
  • The insurer has, at the time of policy issuance or first renewal, a surplus as to policyholders equal or greater than $500 million or a ratio of the insurer’s net written premium to its surplus to policyholders does not exceed two to one. In calculating net written premium, consideration is only given for reinsurance placed with reinsurers that have a financial strength rating of “A” or better from A.M. Best, or have a comparable rating by another accurate or acceptable rating agency.
  • The insurer does not purchase Temporary Increase in Coverage Limit coverage pursuant to s. 215.555(17), F.S., from the Florida Hurricane Catastrophe Fund.

After passage in the House on April 22 by a vote of 105-13, HB 1171 remains in Senate Messages.

 

Senate Professional Liability Claims Bill Substituted for House Version

The House considered HB 511 relating to Professional Liability Claims today on second reading, during which it substituted the bill with SB 2252, a similar bill originally sponsored by Senator Carey Baker

SB 2252 changes the conditions under which a claim against professional liability insurance must be reported to the State.  It also provides a statutory definition for when a claim exists and creates a new set of reporting criteria for those entities which must report claims activity to the Florida Office of Insurance Regulation (“OIR”).

According to the OIR, implementation of the provisions in this bill, which substantially amends section 627.912, F.S., will simplify regulation of liability insurance claims reporting by eliminating duplicative and frivolous claims reports. These changes will improve the quality of data collected by the OIR and its regulation of the affected parties, with no additional cost.

 

Senate Financial Instruments Bill Now Identical to Insurance-Amended House Version 

Senate Bill 732 was amended in the Senate on second reading today, April 28, 2009, to include reauthorization of the Florida Hurricane Catastrophe Fund $10 million drop-down layer for certain companies.  An amendment to the bill by Senator Mike Haridopolis relating to title loans was withdrawn. 

Through the amendment process, SB 732 is now identical to HB 569, which was amended in a similar manner on April 27.

The bills will now serve as a “backup” in the event that the House or Senate omnibus property insurance packages, SB 1950 or HB 1495, are not passed, or are vetoed.

SB 732 is expected to be considered by the Senate on April 29.

 

 

For additional information on Florida’s legislative process and terminology, click here.

 

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

 

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