Proposed Mediation of Commercial Residential Property Insurance Claims Rule Changes Issued
Jul 17, 2009
The Florida Department of Financial Services (“DFS”), Division of Consumer Services issued a Notice of Change regarding Rule 69J-166.002, entitled “Mediation of Commercial Residential Property Insurance Claims.”
The Notice of Change, which identifies proposed amendments to the Rule, is printed below and may also be viewed by clicking here.
Should you have any questions or comments, please contact Colodny Fass.
69J-166.002: Mediation of Commercial Residential Property Insurance Claims
NOTICE OF CHANGE: Notice is hereby given that the following changes have been made to the proposed rule in accordance with subparagraph 120.54(3)(d)1., F.S., published in Vol. 35 No. 17, May 1, 2009 issue of the Florida Administrative Weekly.
(1) Purpose and Scope. This rule implements Section 627.7015, F.S. The program established under this rule is prompted by the critical need for effective, fair, and timely handling of commercial residential property claims. This program is available to all first-party claimants and insurers prior to commencing the appraisal process set forth in their policies or commencing litigation. The program is also available to litigants referred to the Department from Circuit or County court. For claims which have not previously been mediated under any Department mediation program, the mediation procedures described in this rule are available to all commercial residential property claims for property located in the State of Florida. This rule does not apply to commercial insurance, private passenger motor vehicle insurance, or to liability coverage contained in property insurance policies. This program does not apply to policies issued under the National Flood Insurance Program established under the National Flood Insurance Act of 1968. Personal lines residential insurance claims can be mediated pursuant to Rule 69J-166.031, F.A.C. a separate rule. Before resorting to these procedures, insureds and insurers are encouraged to resolve claims as quickly and fairly as possible.
(2) through (3) No change.
(4) No change.
(a)1. No change.
2. The mailing that contains the notice of the right to mediate may include the Department’s consumer brochure on mediation but no other materials, forms, or documents may be included. Notification shall be in writing and shall be legible, conspicuous, printed in at least 12-point type, and printed in typeface no smaller than any other text contained in the notice. The first paragraph of the notice shall contain the following statement: “The Chief Financial Officer for the State of Florida has adopted a rule to facilitate the fair and timely handling of commercial residential property insurance claims. The rule gives you the right to attend a mediation conference with your insurer in order to settle any dispute you have with your insurer about your claim. An independent mediator, who has no connection with your insurer, will be in charge of the mediation conference. You can start the mediation process after receipt of this notice by calling the Department of Financial Services at 1(877)693-5236. The parties will have 21 days from the date of the notice to otherwise resolve the dispute before a mediation hearing can be scheduled.”
3.a. through f. No change
4. Failure of an insurer to abide by this procedure and to notify the insured as required above will result in the insurer being referred to the Florida Office of Insurance Regulation for administrative action pursuant to Section 624.15, F.S.
(b) No change.
(c) Upon receiving a request for mediation, and after the expiration of the 21 day resolution period, the Administrator shall randomly select from the Department’s list a mediator to conduct the mediation conference. The Administrator shall notify the mediator of his or her selection and indicate the names and addresses of the parties and their known representatives, their phone numbers (if known), the Department’s file number, the date of the request for mediation, and that the mediation is to occur within 45 days of the request. The mediator will have three business days from the date of notification by the Administrator to accept or reject the selection. If the mediator rejects the selection or fails to accept the selection within three business days, or if the mediator is disqualified pursuant to paragraph (7)(e), then the Administrator shall randomly select another mediator. For all mediation requests under this rule, the time limits in this section shall not be applicable for two years following the declaration of a disaster. Failure of an insurer to abide by this procedure and to notify the insured as required above will result in the insurer being referred to the Florida Office of Insurance Regulation. The Florida Office of Insurance Regulation will take such further action as it deems appropriate.
(5) through (6)(a) No change.
(b) For two years following the declaration of a disaster, the amounts allocated to the mediator and the Administrator shall may be modified by the Department if and to the extent necessary to cover the cost of facilities to conduct the mediation, but in no event will the total cost for mediation exceed those listed in paragraph (6)(a) above.
(c) through (d) No change.
(7) through (8) No change.
(a)1. through 4. No change.
5. The mediator will notify the insured, insurer, and the Administrator in writing of the exact time, date, and location of the conference. In times of declared disaster, the Administrator shall require additional methods of communication such as telephone or email with the insured, if the Administrator determines such action is necessary to facilitate and expedite the mediation process.
(b) No change.
(c)1. No change.
2. The mediation conference also may be attended by persons who may assist a party in presenting his claim or defense in the conference, such as contractors, adjusters, engineers, and interpreters. The parties may not have separate counsel in the mediation conference unless requested by the insured or if the parties agree otherwise. If the insured elects to have an attorney participate in the conference, the insured shall notify the mediator of such participation 7 14 days before the conference, unless the parties agree otherwise. Upon receipt of such notice from the insured, the mediator shall provide notice to the insurer that the insured will be represented at the mediation conference.
(d)1. No change.
2. Parties and their representatives must refrain from turning the conference into an adversarial process. A party will be determined not to have negotiated in good faith if the party, or a person participating on the party’s behalf, continuously disrupts, becomes unduly argumentative or adversarial, or otherwise inhibits the negotiations as determined by the mediator. The mediator shall terminate the conference if the mediator determines that either party is not negotiating in good faith or if the mediator determines that the conference should be terminated under the provisions of Rule 10.420(b) of the Florida Rules for Certified and Court-Appointed Mediators, which is hereby incorporated by reference. The party responsible for causing termination shall be responsible for paying the mediator’s fee and the administrative fee for any rescheduled mediation.
(e) through (g) No change.
(9) No change.
(a) The insurer shall pay the mediator’s fee and the Administrator’s fee. The Department reserves the right to reduce fees based on consumer surveys and cost analysis. All funds due the Department shall be remitted to the Department of Financial Services, Mediation Section, Bureau of Education, Advocacy and Research, 200 East Gaines Street, Tallahassee, Florida 32399-4212, together with a reference to the Department’s file number, the claim number, identification of the parties, date of the mediation, and name of the mediator. These funds will be deposited in the Insurance Regulatory Trust Fund to defer Department costs.
1. No change.
2. Cancellation Due To Absence. Failure of a party to arrive at the mediation conference within 30 minutes of the conference’s starting time shall be considered an absence. Payment shall be as follows:
a. If the insured fails to appear at the conference, the conference shall be considered to have been held and the insurer must make payment in accordance with subsection (6)(a) of this rule. If the insured wishes to schedule a new conference after failing to appear, the insured shall pay a sum equal to the fees paid by the insurer for the first scheduled mediation. This sum shall be applied towards the second mediation with the insurer paying the balance of the cost of that second mediation total cost of mediation for the new conference will be borne by the insured. The mediator’s fee shall be payable directly to the mediator and the administrative fee shall be paid to the Administrator. The new conference shall be rescheduled only upon the insured’s payment of the total cost of the mediation at the rate specified in subsection (6) of this rule.
b. If the insurer fails to appear at the conference, the insurer shall make payment for the conference in accordance with paragraph subsection (6)(d) of this rule. If the insurer fails to appear at the conference without good cause, the insurer shall pay the insured’s actual cash expenses incurred in attending the conference and shall pay a second total cost of mediation for the rescheduled conference. Good cause includes severe illness, injury, or other emergency which could not be controlled by the insurer and could not reasonably be remedied by the insurer prior to the conference by providing a replacement representative. If an insurer fails to appear at conferences with such frequency as to evidence a general business practice of failure to appear, the Department will report the failure to appear to the Florida Office of Insurance Regulation for administrative action pursuant to Section 624.15, F.S. as a potential violation of Florida law. The Florida Office of Insurance Regulation will take such further action as it deems appropriate.
(b) Any disputes regarding the amount of disbursement of funds shall be resolved by the Department.
(b) Any (c) Except as provided in subsection (8)(a)3., any expenses associated with the mediation conference, such as travel, telephone, postage, meals, lodging, facilities, and other related expenses, shall be borne by the party, mediator or other person incurring the expense.
(10) through (12) No change.
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