Major Florida Insurance Legislation Dies Amid 2015 Legislative Session Meltdown

May 13, 2015


Major insurance issues like bad faith reform, assignment of benefits and transportation network company-related coverage were among the casualties of Florida’s 2015 Regular Legislative Session.

In an unprecedented maneuver, the House adjourned “sine die” early due to a $4 billion budget impasse between the Florida House of Representatives and Florida Senate over the expansion of Medicaid as it relates to the Affordable Care Act and funding for Florida’s Low Income Pool.  The ongoing political wrangling came to a halt three days before the Session’s scheduled May 1 conclusion.

Ultimately, some smaller insurance-related issues did pass and are on their way to Florida Governor Rick Scott.  Once he receives these and other bills, he has 15 days to sign, veto or allow them to become law without his signature. 

At this point Senate President Andy Gardiner and House Speaker Steve Crisafulli have agreed on dates of June 1 through June 20 for a Special Session to address the budget.  It is unclear if any additional subjects will be included in the official “call” for the Session. 

By law, the Legislature is required to pass a budget prior to the next fiscal year.

The following insurance-related bills are among those that passed this year:


“Mini Omnibus” Bill

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

  • Eliminates rate certifications where a rate filing is not also required and removes commercial non-residential multi-peril insurance from required annual base rate filings
  • Lengthens the time insurers have to use a previous version of a hurricane model after a newer version of the model is approved by the Florida Commission on Hurricane Loss Projection Methodology
  • Prohibits the cancellation of a personal lines insurance policy after 90 days, except under certain circumstances
  • Repeals the required notice deadline of June 1st for property insurance policies being canceled, non-renewed, or terminated during hurricane season, and lengthens the notice time period under current law for all property insurance policies to 120 days
  • Clarifies that neutral evaluation of a sinkhole claim is available if sinkhole coverage is provided under a policy
  • Repeals a prohibition against using the existence of the Florida Insurance Guaranty Association for the purpose of sales, solicitation, or as an inducement to purchase insurance
  • Clarifies the use of the Medicare fee schedule in Personal Injury Protection (“PIP”) insurance
  • Revises motor vehicle pre-insurance inspection requirements
  • Effective July 1, 2015


Citizens Property Insurance Corporation


HB 715 relating to Eligibility for Coverage by Citizens Property Insurance Corporation by State Representative Holly Raschein

  • Removes the prohibition on Citizens Property Insurance Corporation (“Citizens”) coverage for any major structure that is substantially improved pursuant to a building permit applied for on or after July 1, 2015, but retains the coverage prohibition on new construction of a major structure
    • A major structure that is rebuilt, repaired, restored, or remodeled to increase the total square footage of finished area by more than 25 percent pursuant to a permit applied for after July 1, 2015 is also ineligible for coverage from Citizens.
  • Effective July 1, 2015



HB 1087 relating to Operations of Citizens Property Insurance Corporation by State Representative Michael Bileca

  • Requires that, after January 1, 2016, a Citizens policyholder must be told when one or more insurers have expressed interest in assuming the policy
  • Prohibits any policy from being taken out of Citizens after January 1, 2016, unless the policyholder received information comparing applicable takeout offers, as well as comparing them to the policyholder’s current Citizens coverage.  The information provided must include the policies’ estimated renewal premium and extent of renewal coverage, including an explanation of differences, and a comparison of both takeout offers’ premium and coverage to that of Citizens’ renewal policy.
  • Allows a consumer to opt out of takeout solicitations beyond once in a six-month period
  • Allows a consumer to retain eligibility for Citizens coverage through Citizens’ Clearinghouse if the voluntary market insurer that assumed the policy increases its initial premium more than 10 percent above its original estimate or increases the rate on the policy more than 10 percent per year during the 36 months following the takeout
  • Authorizes additional entities to receive confidential underwriting data for the purpose of analyzing risks for underwriting in the private insurance market and prohibits the use of this information for soliciting policyholders


Flood Insurance

SB 1094 relating to Peril of Flood by Senator Jeff Brandes

  • Requires local government comprehensive plan coastal management elements to include information on the reduction of flood risks and losses, such as development and redevelopment principles, strategies, and engineering solutions that reduce flood risks and losses
  • Creates new requirements of law relating to flood elevation certificates, requiring surveyors or mappers who complete an elevation certificate to submit a copy of the certificate to the Florida Division of Emergency Management within 30 days of its completion
  • Allows insurers to sell “flexible flood insurance” coverage, which is defined as coverage for the peril of flood that may include water intrusion coverage and differs from standard or preferred coverage by:
    • Being in an agreed-upon amount between the insurer and policyholder
    • Including a deductible as authorized in s. 627.701, F.S.
    • Being adjusted in accordance with s. 627.7011(3), F.S., or adjusted only on the basis of the actual cash value of the property
    • Covering only the principal building, as defined in the policy
    • Including or excluding coverage for additional living expenses
    • Excluding coverage for personal property or contents
  • Repeals current law prohibiting a supplemental flood insurance policy from being used for excess coverage over any other insurance policy covering the peril of flood. 
  • Clarifies that the declarations page or face page of a flood insurance policy must prominently note the deductibles and coverage limits of the policy
  • Allows an insurer to request from the Florida Office of Insurance Regulation a certification that acknowledges that the insurer provides a flood policy, contract, or endorsement that equals or exceeds flood coverage by the National Flood Insurance Program
  • Effective July 1, 2015


Insurance Policy Documents

HB 273 relating to Insurer Notifications by State Representative Keith Perry

  • Permits personal lines insurance policyholders to have policy documents delivered electronically if they elect to do so
  • Allows insurers to send a separate notice of change in policy terms and requires insurers to send a sample copy to the policyholder’s agent
  • Prohibits insurers using a notice of change in policy terms to add optional coverages, unless the policyholder affirmatively approves the coverage
  • Defines “optional coverage” as the addition of new insurance coverage that has not previously been requested or approved by the policyholder, but that does not include any change to the base policy, deductible or insurance limit
  • Effective July 1, 2015


Motor Vehicle Insurance

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

  • Removes the four-vehicle maximum from the definition of “motor vehicle insurance” in s. 627.041(8), F.S. and the definition of “policy” in s. 627.728(1)(a), F.S. to allow vehicle owners to purchase, and insurers to issue single policies that cover any number of private passenger motor vehicles, rather than just four or less vehicles per policy
  • Effective July 1, 2015


Florida Insurance Guaranty Association

Definition of Asset

HB 189 relating to Insurance Guaranty Associations by State Representative Travis Cummings

  • Provides that the definition of “asset” for the purposes of determining an insurer’s financial condition includes Florida Insurance Guaranty Association (“FIGA”) assessments that are levied (before policy surcharges are collected), resulting in a receivable, which is recognized as an admissible asset under statutory accounting principles to the extent the receivable is likely to be realized
  • An insurer must reduce the amount recorded as an asset if it cannot fully recoup the assessment amount because of a reduction in writings or withdrawal from the market.
  • For assessments that are paid after policy surcharges are collected pursuant to the monthly installment option, the recognition of assets is based on actual premium written offset by the obligation to FIGA.
  • Clarifies the Florida Life and Health Insurance Guaranty Fund’s statutory duty to review policies, contracts, and claims of insolvent life and health insurers following either domestic or foreign liquidations or rehabilitations
  • Effective July 1, 2015


Collection of Assessments

SB 836 relating to the Florida Insurance Guaranty Association by Senator Jack Latvala

  • Revises the manner in which insurers collect and remit FIGA assessments
  • Creates a uniform FIGA assessment percentage to be collected from policyholders
  • Allows FIGA to use a monthly installment method for the collection of emergency or regular assessments from insurers, in addition to the current pay and recoup method (or a combination of both)
  • An insurer that did not write insurance in the prior year is required to pay a FIGA assessment based on an estimate of premiums it will write in the assessment year.
  • Exempts regular FIGA assessments from the insurance premium tax
  • Effective July 1, 2015



SB 252 relating to Insurance by Senator Chris Smith

  • Specifies that the lack of an agent’s countersignature on a property, casualty or surety insurance policy or contract does not affect its validity
  • Allows a foreign or alien insurer applying for a certificate of authority to submit a copy of the most recent examination report that is up to five years old as of the date of the insurer’s application
  • Eliminates the requirement that each surplus lines agent, on or before the 45th day following each calendar quarter, file with the Florida Surplus Lines Service Office (“FSLSO”) an affidavit stating that all surplus lines insurance he or she transacted during that calendar year has been submitted to the FSLSO.  The requirement is no longer needed because the FSLSO has implemented auditing procedures to confirm the information.
  • Changes the due date for certain reports to the Florida Senate President and House Speaker from January 1 to January 15
  • Amends the definition of “financial guaranty insurance” to exempt guarantees of higher education loans unless they are written by a financial guaranty insurance corporation
  • Effective July 1, 2015


Insurance Agents and Agencies

HB 1133 relating to Division of Insurance Agent and Agency Services by State Representative Jay Fant

  • Removes general lines agents’ limitation to only sell health insurance when it is from an insurer that the agent represents for property and casualty insurance.  An agent can now transact health insurance with any health insurer under the agent’s general lines license.
  • Reduces the number of lines that an agent-in-charge must be licensed to transact.  The agent-in-charge is required to be licensed in at least two of the location’s lines, rather than all of its lines; except that, if the location only handles one line, the agent in charge must be licensed in that line of insurance.
  • Eliminates the examination for customer representative licensing.  Applicants for such licensure will qualify if they have achieved certain specified professional designations or a qualifying academic degree within four years prior to application.
  • Allows the general lines agent, personal lines agent and all-lines adjuster license applicants an exemption from the required examination upon certain conditions, including obtaining certain professional designations or a qualifying academic degree
  • Removes any examination exemption limitations from license transferees from other states
  • Allows non-resident agent applicants to receive an examination exemption if they hold a comparable license in another state with similar examination requirements
  • Requires applicants/attendees to complete 75 percent of course hours in pre-licensure courses in order to receive credit.  This replaces a rule requirement that was repealed for lack of rulemaking authority.
  • Revises various knowledge, experience or instruction requirements applicable to applicants for licensure as a general lines agent, personal lines agent, life agent or health agent
  • Establishes a mandatory five-year records retention requirement for insurance agents following expiration of a policy
  • Defines the term “surrender” for purposes of agent-recommended surrenders of an annuity or life insurance policy; requires issuance of a statutory informational notice 14-days before the surrender occurs; eliminates a required form concerning the information notice required prior to agent recommended annuity surrender, while revising, but maintaining, statutory notice criteria.
  • Removes or revises various terminologies to adjust to current usage in the insurance industry
  • Deletes references to correspondence courses to allow a greater variety of instruction methods
  • Effective July 1, 2015


Insurance Fraud

HB 1127 relating to Insurance Fraud by State Representative Jennifer Sullivan

  • Expands current law to include charges and reimbursement claims by licensed clinics that are violating Florida Agency for Health Care Administration rules as unlawful, noncompensable and unenforceable
  • Provides that a knowing, unlawful claim for reimbursement made by an unlicensed clinic or a clinic operating in violation of the Health Care Clinic Act is considered theft, regardless of whether payment is made
  • Establishes an additional felony offense for knowingly failing to update certain required clinic activity-related information within 21 days
  • Repeals language establishing and governing the Automobile Insurance Fraud Strike Force
  • Effective October 1, 2015


Long-Term Care Insurance

SB 520 relating to Long-Term Care Insurance by Senator Denise Grimsley

  • Allows a nonforfeiture provision to be offered on a long-term care insurance policy in the form of a return of premium at the death of the insured or upon surrender or cancellation of the policy


Insurance Legislation That Failed During the 2015 Session

  • HB 679 relating to Personal Injury Protection Insurance by State Representative Carlos Trujillo
  • HB 669 relating to Assignment of Post-Loss Insurance Policy Benefits by State Representative John Tobia and SB 1064, a similar bill relating to Insurance Claims by Senator Dorothy Hukill
  • HB 491 relating to Property Insurance Appraisal Umpires and Property Insurance Appraisers by State Representative Frank Artiles
  • SB 678 relating to Property and Casualty Insurance by Senator Miguel Diaz de la Portilla
  • HB 677 relating to Reciprocal Insurers by State Representative David Santiago
  • HB 639 relating to Commercial Insurance Rate Filing Procedures by State Representative Scott Plakon
  • SB 1298 relating to Minimum Insurance Requirements (Transportation Network Companies) by State Representative David Simmons
  • SB 1088 relating to Civil Remedies Against Insurers by Senator Jeff Brandes
  • SB 1190 relating to Insurer Insolvency by Senator Tom Lee
  • SB 1210 relating to Attorney Fees in Certain Lawsuits Decided Against Insurers by Senator Alan Hays
  • HB 947 relating to Property Insurance by State Representative Scott Plakon
  • SB 1506 relating to the Florida Hurricane Catastrophe Fund by Senator Oscar Braynon II


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




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