Property and Casualty, Motor Vehicle Policy Bills Among Those Signed by Florida Governor Rick Scott on June 11, 2015

 

Florida Governor Rick Scott signed 48 bills into law yesterday, June 11, 2015.

Below is a summary of four insurance-related bills that were among those enacted:

 

HB 165 relating to Property and Casualty Insurance by State Representative David Santiago

Effective July 1, 2015, HB 165 makes the following changes to Florida statutes relating to property and casualty insurance:

• Limits the requirement that the chief executive officer or chief financial officer and the chief actuary of a property insurer must certify a rate filing to full property insurance rate filings.  Most commercial nonresidential property insurers are not statutorily required to make full rate filings and thus will no longer have to complete certifications.
• Current law requires the Florida Office of Insurance Regulation (“OIR”) to consider projected hurricane losses using a model or method found reliable by the Florida Commission on Hurricane Loss Methodology when reviewing a rate filing.  HB 165 increases from 60 days to 120 days the time an insurer is not required to use the newest version of an approved hurricane model.
• Clarifies that commercial property insurance and commercial casualty insurance, other than commercial residential multi-peril insurance, is exempt from the requirement to make an annual base rate filing with the OIR.
• Establishes a uniform 120-day advance written notice of nonrenewal, cancellation, or termination for personal and commercial lines residential property insurance policies.
• Clarifies that an insurer has to notify a policyholder of the availability of neutral evaluation of a sinkhole claim only if there is coverage available under the policy and the claim was submitted within the statutory timeframe.
• Amends a provision in the Personal Injury Protection statute to resolve an ambiguity relating to the applicability of medical fee schedules.
• Creates exemptions to the pre-insurance inspection requirements for private passenger automobiles.
• Repeals a prohibition against using the existence of the Florida Insurance Guaranty Association (“FIGA”) for the purpose of sales, solicitation, or inducement to purchase insurance.  Such solicitations are required to explain the coverage limits of FIGA which apply to the type of insurance described in the advertisement or solicitation.

 

HB 4011 relating to Motor Vehicle Insurance by State Representative Tom Goodson

Effective July 1, 2015, HB 4011 removes the current limitation that no more than four automobiles may be insured on the same private passenger motor vehicle insurance policy.  This will allow any number of automobiles to be insured under one private passenger motor vehicle insurance policy.

 

HB 887 relating to Unclaimed Property by State Representative Jay Trumbull

Effective July 1, 2015, HB 887 creates a process under Florida’s Uniform Unclaimed Property Act whereby the Florida Department of Financial Services (“DFS”) may commence a civil action for a determination that a U.S. savings bonds may escheat to the State of Florida. 

The bill specifies that a U.S. savings bond in the possession of the DFS or registered to a person with a last known address in the state is presumed to be abandoned and unclaimed five years after the bond reaches maturity and no longer earns interest.  Once such U.S. savings bonds are abandoned and unclaimed, the DFS may file a civil action in a court of competent jurisdiction in Leon County, Florida for a determination that the bond escheats to the State.  Prior to any escheat hearing, the DFS must undertake specific efforts to notify registered owners, co-owners and beneficiaries of the escheat proceedings through notice of publication, as it must do when parties cannot be found through reasonable and customary due diligence efforts.  If a person files a claim for a bond, and the court determines the claimant is entitled to the bond, judgment is entered for the claimant.

If no person files a claim with the court for the bond, or the court determines the claimant is not entitled to the bond or its proceeds, the court is to enter a default judgment that the bond or its proceeds has escheated to the State.

If the DFS obtains title to these bonds, it places the DFS in the same position as the record owner of the bond, which is necessary to recover proceeds from the U.S. Treasury.  Once the DFS obtains title to these bonds, it may petition the Treasury for redemption those in possession and, if necessary, to render a full accounting of the necessary information of absent bonds, which would identify the class of bonds registered with the last known address in Florida.  If the proceeds from such bonds are received by the DFS, the bill requires the proceeds to be deposited in the same manner as other forms of unclaimed property in accordance with s. 717.123, F.S.

Once bonds escheat to the State, the owners, co-owners, and beneficiaries may recover a bond or the proceeds from a bond by making a claim to the DFS and providing sufficient proof of the validity of the claim.

 

HB 927 relating to Title Insurance by State Representative Bill Hager

Effective July 1, 2015, HB 927 revises procedures for dealing with insolvent title insurers.

Since there is no guaranty fund for title insurers in Florida, if funds are necessary to pay claims against insolvent title insurers, all title insurers doing business in Florida are liable for an assessment to pay those claims.

Together, the DFS (acting as receiver) and the OIR determine the amount of money necessary to pay a claim and order an assessment.  Title insurers recover the assessment by collecting a surcharge on each title policy issued in Florida.  To prevent an insurer from gaining a competitive advantage, each title insurer is required to continue to collect the surcharge until all title insurers have recovered their assessments.  Current law provides that surcharges collected in excess of the assessment amount are paid to the State.

HB 927 creates a mechanism for using excess surcharges to reduce the time that surcharges are collected.  It provides that, when a company has collected surcharges in excess of the amount it was assessed, the company shall pay the excess to the receiver.  The receiver must maintain the money in an excess surcharge account and may use the excess surcharges only:

• To reduce or eliminate the amount of a future assessment for a title insurer currently in receivership, or that later enters receivership; or
• To reduce the amount of time that Florida consumers are subject to surcharges by transferring the excess to title insurers that have not fully collected surcharges equal to the amount of the aggregate assessments they paid pursuant to s. 631.400, F.S.

If the receiver has no active title insurer receiverships for 12 consecutive months or there have been no payable claims against any title insurer receivership for 60 consecutive months, all excess surcharges held by the receiver must be paid to the Insurance Regulatory Trust Fund housed within the DFS.

If a surcharge is already in effect at the time of an assessment, the bill allows the OIR to order an additional surcharge based on a new assessment.

 

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

 

 

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