Insurance Bills Advance in the Florida Legislature
Apr 20, 2021
Bills of interest to the insurance industry advanced through committees in the Florida Legislature on Monday, April 19, 2021. The Florida House property bill, HB 305 by Representative Bob Rommel (R-Naples) was temporarily postponed in the House Commerce Committee. Committee Chair Blaise Ingoglia (R-Spring Hill) told the committee that the bill would likely be considered at the committee’s meeting Friday, April 23, 2021.
The “consumer protection” bill supported by CFO Patronis, HB 717 by Representative Chuck Clemons (R-Newberry) passed the House Commerce Committee and is available for consideration by the full House. The bill:
- Requires persons licensed or issued a certificate of authority by the DFS or the OIR to provide requested documents within 20 days of the request.
- Prohibits agents and adjusters from taking action that allows the personal financial or medical information of a consumer to be made available to the public. The bill also prohibits agents or adjusters from initiating in-person or telephone solicitation after 9 p.m. or before 8 a.m. unless requested by the prospective customer.
- Requires all adjusting firms to obtain a license from the DFS to transact adjusting in Florida. The licensure requirements are like the requirements for insurance agencies.
- Creates a third degree felony for knowingly aiding or abetting an unlicensed person in transacting insurance or otherwise engaging in insurance activities without a license.
- Allows the DFS to disapprove an insurance agency’s proposed use of a name that includes the words “Medicare” or “Medicaid” and gives agencies that currently operate under such a name to use the name until June 30, 2023.
- Allows an insured or claimant 10 calendar days to cancel a public adjuster contract without penalty. The bill requires a public adjuster to provide a written estimate of the loss within 60 days after the date of the contract.
- Gives the DFS the authority to impose fines against unlicensed persons performing claims adjusting, soliciting, or other activities for which an agent or adjuster license is required.
- Requires an insured purchasing a surplus lines policy to sign a disclosure stating, “You are agreeing to place coverage in the surplus lines market. Coverage may be available in the admitted market. Persons insured by surplus lines carriers are not protected under the Florida Insurance Guaranty Act with respect to any right of recovery for the obligation of an insolvent unlicensed insurer.” This section is effective January 1, 2022.
- Provides that issuing an insurance policy without the prior informed consent of the person who owns the property that will be insured is considered “sliding.”
- Provides that submitting an invoice for premium payment to a mortgagee or escrow agent to institute an insurance policy without the prior informed consent of the owner of the property that will be insured is considered “sliding.”
- Requires an insurer to inform an applicant or insured that a credit report or score is being requested for underwriting or rating purposes. The notice must include the following language: “The Department of Financial Services offers free financial literacy programs to assist you with insurance related questions, including how credit works and how credit scores are calculated. To learn more, visit www.myfloridacfo.com.” This section is effective January 1, 2022.
The bill makes changes to provisions dealing with insurer claims handling effective January 1, 2022. The bill:
- Requires an insurer to begin investigation of a claim within 14 days after receiving the proof of loss. If the investigation involves a physical inspection of the property, the adjuster assigned by the insurer must provide the policyholder with his or her name and license number. The bill requires an insurer to maintain a record or log of each adjuster who communicates with the policyholder and provide the list of adjusters to the OIR or DFS.
- Requires insurers, when providing a preliminary or partial estimate regarding a claim, to provide the following statement to the insured:
THIS ESTIMATE REPRESENTS OUR CURRENT EVALUATION OF THE COVERED DAMAGES TO YOUR INSURED PROPERTY AND MAY BE REVISED AS WE CONTINUE TO EVALUATE YOUR CLAIM. IF YOU HAVE QUESTIONS, CONCERNS, OR ADDITIONAL INFORMATION REGARDING YOUR CLAIM, WE ENCOURAGE YOU TO CONTACT US.
- Requires insurers, when providing payment on a claim which is not the full and final payment, to provide the following statement:
WE ARE CONTINUING TO EVALUATE YOUR CLAIM INVOLVING YOUR INSURED PROPERTY AND MAY ISSUE ADDITIONAL PAYMENTS. IF YOU HAVE QUESTIONS, CONCERNS, OR ADDITIONAL INFORMATION REGARDING YOUR CLAIM, WE ENCOURAGE YOU TO CONTACT US.
- Requires insurers to provide a Homeowner Claims Bill of Rights to a consumer in all cases, including after declaration of a state of emergency, within 14 days after receiving an initial communication concerning a claim.
The bill also removes the consumer’s obligation to pay a $100 deductible to FIGA to receive payment on their claim through FIGA and provides that a “covered claim” under the FIGA statute does not include any return of premium resulting from a policy that was not in force on the date of the final order of liquidation.
The Florida Senate version of the bill is scheduled for consideration by the full Senate on Wednesday.
SB 1574 by Senator Jeff Brandes (R-St. Petersburg), relating to Citizens Property Insurance, passed the Senate Appropriations Committee and is available for consideration by the full Senate. There is no House companion bill but because the bill has passed all committees of reference, provisions of the bill could be offered as amendments to other bills under consideration by the Senate. The bill:
- Limits application of the Citizens “glide path,” which prevents rate increases of greater than 10 percent, by applying the glide path to only Citizens personal lines residential policies issued on or before January 1, 2022, on residential properties used as the primary residence with a dwelling replacement cost of less than $700,000 or single-unit condominiums with a dwelling and contents replacement cost of less than $700,000.
- Provides that Citizens policyholders become ineligible for Citizens personal lines residential coverage upon receiving an offer from an authorized insurer for comparable coverage that is not 15 percent greater than the actuarially sound Citizens premium would be on the property.
- Increases the maximum surcharge that may be levied on Citizens’ policyholders if Citizens projects a deficit in one of its accounts to 20% of premium if Citizens has one million policyholders but less than 1.5 million policyholders or 25% of premium if Citizens has 1.5 million policyholders or more.
- Authorizes surplus lines insurers to participate in Citizens’ depopulation, take-out, and keep-out plans.
HB 815 by Representative Tommy Gregory (R-Sarasota), the insurance “omnibus” bill, passed the Commerce Committee. The bill:
- Modifies when a collateral protection insurance policy is eligible for FHCF coverage.
- Provides that service of process is perfected on an insurer when process served on the DFS is delivered to the insurer or DFS has notified the insurer of its availability online.
- Authorizes associations, trusts, and pools that provide self-insurance for public entities to use communications media technology to establish a quorum and conduct public business.
- Revises requirements related to requests for, and insurers’ production of, loss run statements.
- Provides that a property insurer may use a weighted or straight average of two or more approved hurricane models in a rate filing.
- Allows insurers to give mitigation credit for evaluation by, and compliance with, standards developed by an independent, not-for-profit, scientific research organization.
- Provides that past and prospective loss experience for insolvent insurers must be used in the determination and fixing of workers’ compensation rates and that data previously reported by insolvent insurers may be used to assess the impact on rates.
- Allows Citizens the option to insure residential condominiums under commercial residential wind-only coverage if the units are intended for residential use, but are rented on a short-term basis.
- Authorizes electronic transmission of policy documents and claims communications.
- Reenacts the exemption from diligent search efforts when an agent is placing flood insurance on the surplus lines market.
- Amends the scope of services covered by regulations governing post-loss property insurance assignment agreements.
The Senate version of the omnibus bill is currently in the Appropriations Committee and has not been scheduled for a hearing.
SB 168 by Senator Hooper extending the Hurricane Loss Mitigation Program until June 30, 2031, is scheduled for consideration by the full Senate on Wednesday, April 28, 2021.
The Senate version of the DFS agency bill, SB 1408, is scheduled for a hearing by the Rules Committee on Tuesday, April 27, 2021. The House bill, HB 1209, is scheduled for consideration by the full House on Tuesday, April 27, 2021.