Florida Senate - 2021                        COMMITTEE AMENDMENT
       Bill No. SB 54
       
       
       
       
       
       
                                Ì799160+Î799160                         
       
                              LEGISLATIVE ACTION                        
                    Senate             .             House              
                  Comm: RCS            .                                
                  01/26/2021           .                                
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       The Committee on Banking and Insurance (Passidomo) recommended
       the following:
       
    1         Senate Amendment (with title amendment)
    2  
    3         Delete lines 1677 - 1949
    4  and insert:
    5         Section 33. Paragraph (b) of subsection (1) and subsection
    6  (8) of section 624.155, Florida Statutes, are amended to read:
    7         624.155 Civil remedy.—
    8         (1) Any person may bring a civil action against an insurer
    9  when such person is damaged:
   10         (b) By the commission of any of the following acts by the
   11  insurer:
   12         1. Except for a third-party bad faith failure to settle a
   13  claim subject to s. 624.156, not attempting in good faith to
   14  settle claims when, under all the circumstances, it could and
   15  should have done so, had it acted fairly and honestly toward its
   16  insured and with due regard for her or his interests;
   17         2. Making claims payments to insureds or beneficiaries not
   18  accompanied by a statement setting forth the coverage under
   19  which payments are being made; or
   20         3. Except as to liability coverages, failing to promptly
   21  settle claims, when the obligation to settle a claim has become
   22  reasonably clear, under one portion of the insurance policy
   23  coverage in order to influence settlements under other portions
   24  of the insurance policy coverage; or
   25         4.When handling a first-party claim under a motor vehicle
   26  insurance policy, not attempting in good faith to settle such
   27  claim pursuant to subparagraph 1. when such failure is caused by
   28  a failure to communicate to an insured:
   29         a.Information on who is adjusting the claim;
   30         b.Any issues that may impair the insured’s coverage;
   31         c.Information that might resolve the issue in a prompt
   32  manner;
   33         d.Any basis for the insurer’s rejection or nonacceptance
   34  of any settlement offer; or
   35         e.Any needed extensions to respond to a time-limited
   36  settlement offer.
   37  
   38  Notwithstanding the provisions of the above to the contrary, a
   39  person pursuing a remedy under this section need not prove that
   40  such act was committed or performed with such frequency as to
   41  indicate a general business practice.
   42         (8) The civil remedy specified in this section does not
   43  preempt any other remedy or cause of action provided for
   44  pursuant to any other statute or pursuant to the common law of
   45  this state. A Any person is may obtain a judgment under either
   46  the common-law remedy of bad faith or this statutory remedy, but
   47  shall not be entitled to a judgment under multiple bad faith
   48  both remedies, whether under statute or common law. This section
   49  shall not be construed to create a common-law cause of action.
   50  The damages recoverable pursuant to this section shall include
   51  those damages which are a reasonably foreseeable result of a
   52  specified violation of this section by the authorized insurer
   53  and may include an award or judgment in an amount that exceeds
   54  the policy limits.
   55         Section 34. Section 624.156, Florida Statutes, is created
   56  to read:
   57         624.156 Bad faith failure to settle actions against motor
   58  vehicle insurers by third-party claimants.—
   59         (1)SCOPE.This section applies in all actions against any
   60  insurer by a third party for bad faith failure to settle,
   61  whether under statute or common law, for a loss arising out of
   62  the ownership, maintenance, or use of a motor vehicle operated
   63  or principally garaged in this state at the time of an accident,
   64  regardless of whether the insurer is authorized to do business
   65  in this state or issued a policy in this state.
   66         (2) DUTY OF GOOD FAITH.In handling claims, an insurer
   67  stands as a fiduciary for its insured and must handle claims in
   68  good faith. The insurer shall comply with the best practice
   69  standards of subsection (4) using the same degree of care and
   70  diligence as a person of ordinary care and prudence would
   71  exercise in the management of his or her own business.
   72         (3) BAD FAITH FAILURE TO SETTLE.“Bad faith failure to
   73  settle” means an insurer’s failure to settle a claim when, under
   74  all the circumstances, it could and should have done so, had it
   75  acted fairly and honestly toward its insured and with due regard
   76  for the insured’s interests.
   77         (4)BEST PRACTICE STANDARDS.—Upon the earlier of receiving
   78  notice of a claim or, under subsection (6), a demand for
   79  settlement, an insurer must do all of the following:
   80         (a) Assign a duly licensed and appointed insurance adjuster
   81  to investigate the claim and resolve any questions concerning
   82  the existence or extent of the insured’s coverage.
   83         (b) Evaluate every claim fairly, honestly, and with due
   84  regard for the interests of its insured, consider the full
   85  extent of the claimant’s recoverable damages, and consider the
   86  information in a reasonable and prudent manner.
   87         (c) Request from the insured or claimant additional
   88  relevant information deemed necessary.
   89         (d) Conduct all verbal and written communications with the
   90  utmost honesty and complete candor.
   91         (e) Make reasonable efforts to explain to nonattorneys
   92  matters requiring expertise beyond the level normally expected
   93  of a layperson with no training in insurance or claims-handling
   94  issues.
   95         (f) Save all written communications and note and save all
   96  verbal communications in a reasonable manner.
   97         (g) Provide the insured, upon request, with all
   98  nonprivileged communications related to the insurer’s handling
   99  of the claim.
  100         (h) Provide, at the insurer’s expense, reasonable
  101  accommodations necessary to communicate effectively with an
  102  insured covered under the Americans with Disabilities Act.
  103         (i)In handling third-party claims, communicate to an
  104  insured:
  105         1. The identity of any other person or entity the insurer
  106  knows may be liable;
  107         2. The insurer’s activity on and evaluation of the claim;
  108         3. The likelihood and possible extent of an excess
  109  judgment;
  110         4. Steps the insured can take to avoid exposure to an
  111  excess judgment;
  112         5. Requests for examinations under oath and an explanation
  113  of the consequences of an insured’s failure to submit to an
  114  examination under oath; and
  115         6. Any demands for settlement under subsection (6) or
  116  settlement offers.
  117         (j) When a loss involves multiple claimants and the
  118  claimants are unwilling to settle cumulatively within the policy
  119  limits and release the insured from further liability, in
  120  addition to fulfilling the requirements of paragraphs (a)-(i),
  121  attempt to minimize the risk of excess judgments against the
  122  insured and settle as many claims as possible within the policy
  123  limits in exchange for a release of the insured from further
  124  liability.
  125         (5) CONDITIONS PRECEDENT.—It is a condition precedent to
  126  filing a third-party action for bad faith failure to settle
  127  against an insurer that the claimant must:
  128         (a) Serve a demand for settlement, as provided in
  129  subsection (6), within the insurer’s limits of liability in
  130  exchange for a release of further liability against the insured;
  131  and
  132         (b) Obtain a final judgment in excess of the policy limits
  133  against the insured.
  134         (6) DEMAND FOR SETTLEMENT.—A demand for settlement must do
  135  all of the following:
  136         (a) Identify the:
  137         1. Date and location of loss;
  138         2. Name, address, and date of birth of the claimant;
  139         3. Name of each insured to whom the demand for settlement
  140  is directed; and
  141         4. Legal and factual basis of the claim.
  142         (b) Provide a reasonably detailed description of the
  143  claimant’s:
  144         1. Known injuries caused or aggravated by the incident on
  145  which the claim is based;
  146         2. Medical treatment causally related to the incident on
  147  which the claim is based; and
  148         3. Type and amount of known damages incurred and, if any,
  149  the damages the claimant reasonably anticipates incurring in the
  150  future.
  151         (c) State the amount of the demand for settlement.
  152         (d) State whether the demand for settlement is conditioned
  153  on the completion of an examination under oath, as authorized by
  154  subsection (8).
  155         (e) Provide a physical address, an e-mail address, and a
  156  facsimile number for further communications, including, but not
  157  limited to, responses to the demand for settlement.
  158         (f) Release the insured from any further liability upon the
  159  insurer’s acceptance of a demand for settlement which is not
  160  withdrawn pursuant to paragraph (8)(e) or paragraph (8)(g), or
  161  accepted pursuant to paragraph (8)(f).
  162         (g) Be served upon the insurer by certified mail at the
  163  address designated by the insurer with the Department of
  164  Financial Services under s. 624.422(2).
  165         (7) LIMITATIONS ON CONDITIONS OF ACCEPTANCE OF A DEMAND.—A
  166  claimant may not place any conditions on acceptance of a demand
  167  for settlement other than electing the right to examine the
  168  insured under oath regarding any of the following:
  169         (a) Whether the insured has the ability to satisfy a claim
  170  for damages in excess of the insurer’s limits of liability.
  171         (b) Whether any other person or entity may have actual or
  172  potential direct or vicarious liability for the insured’s
  173  negligence.
  174         (c) Whether any other insurance exists which may cover some
  175  or all of the damages sustained by the claimant.
  176         (8) EXAMINATION UNDER OATH.—After serving a demand for
  177  settlement, a claimant may examine the insured under oath, on
  178  one occasion for a period of time not to exceed 2 hours,
  179  regarding only the issues in subsection (7).
  180         (a) The claimant may request that the insured bring to the
  181  examination relevant documents in the insured’s possession,
  182  custody, or control, including, but not limited to, credit
  183  reports, insurance policies, bank statements, tax returns,
  184  deeds, titles, and other proof of assets or liabilities.
  185         (b) The claimant may not examine the insured regarding
  186  liability.
  187         (c) The claimant, the insurer, and the insured shall
  188  cooperate in scheduling the examination under oath. The insurer
  189  shall notify the insured of the date, time, and location of the
  190  examination under oath.
  191         (d) The examination under oath must occur within 30 days
  192  after the insurer’s acceptance of the settlement demand.
  193         (e) The claimant may withdraw the demand for settlement if
  194  the insured refuses to submit to an examination under oath.
  195         (f) If the insured refuses to submit to an examination
  196  under oath, the insurer may accept the demand for settlement
  197  without requiring a release of the insured. An insurer that
  198  accepts the demand for settlement pursuant to this paragraph
  199  does not have any further duty to defend the insured and may not
  200  be held liable for damages to the insured if the claimant
  201  thereafter obtains an excess judgment against the insured.
  202         (g) Within 7 days after the examination under oath, the
  203  claimant may withdraw the demand for settlement.
  204         (9) SAFE HARBOR.—In any third-party action for bad faith
  205  failure to settle, an insurer may not be held liable if it
  206  tenders its policy limits within 30 days of receiving a demand
  207  for settlement under subsection (6).
  208         (10) RELEASE.An insurer that accepts a demand for
  209  settlement under subsection (6) shall be entitled to a release
  210  of its insured, except as provided in paragraph (8)(f).
  211         (11) BURDEN OF PROOF.—In any third-party action for bad
  212  faith failure to settle, the claimant must prove by the
  213  preponderance of the evidence that the insurer violated its duty
  214  of good faith under subsection (2) and that the insurer in bad
  215  faith failed to settle, as defined in subsection (3).
  216         (a) In determining whether an insurer violated its duty of
  217  good faith under subsection (2) and in bad faith failed to
  218  settle, as defined in subsection (3), the trier of fact shall
  219  consider all of the following:
  220         1. Whether the insurer complied with the best practice
  221  standards of subsection (4) using the same degree of care and
  222  diligence as a person of ordinary care and prudence would
  223  exercise in the management of his or her own business.
  224         2. Whether the insurer failed to settle a claim when, under
  225  all the circumstances, it could and should have done so, had it
  226  acted fairly and honestly toward its insured and with due regard
  227  for the insured’s interests.
  228         3. Whether the claimant or insured failed to provide
  229  relevant information to the insurer on a timely basis.
  230         4. Whether the claimant or insured misrepresented material
  231  facts to the insurer or made material omissions of fact to the
  232  insurer.
  233         5. Whether the insured denied liability or requested that
  234  the case be defended after the insurer fully advised the insured
  235  as to the facts and risks.
  236         6. Whether the insurer timely informed the insured of a
  237  demand to settle within the limits of coverage, the right to
  238  retain personal counsel, and the risk of litigation.
  239         7. The insurer’s willingness to negotiate with the claimant
  240  in anticipation of settlement.
  241         8. The amount of damages the claimant incurred or was
  242  likely to incur in the future under the facts known or
  243  reasonably available at the time of the insurer’s response.
  244         9. If applicable, whether there were multiple third-party
  245  claimants seeking, in the aggregate, compensation in excess of
  246  the policy limits from the insured; and, if so, whether the
  247  insurer breached its duty to attempt to minimize the magnitude
  248  of possible excess judgments against the insured and to attempt
  249  to settle as many claims as possible within the policy limits in
  250  exchange for a release of the insured from further liability.
  251         10. Additional factors that the court determines to be
  252  relevant.
  253         (b) The trier of fact, in determining whether an insurer in
  254  bad faith failed to settle, must be informed that an excess
  255  judgment occurred but may not be informed of the amount of the
  256  excess judgment.
  257         (12) DAMAGES.—An insurer that is found to have violated its
  258  duty of good faith under subsection (2) and in bad faith failed
  259  to settle, as defined in subsection (3), is liable for the
  260  amount of any excess judgment. No other damages, including but
  261  not limited to punitive damages, may be awarded in a third-party
  262  bad faith failure to settle action.
  263         (13) ENFORCEMENT.—If a judgment creditor has served a
  264  demand for settlement under subsection (6), and the judgment
  265  exceeds the insured’s limits of liability, the judgment creditor
  266  must be subrogated to the rights of the insured against the
  267  insurer for common law bad faith.
  268         (14)LIMITATION ON MULTIPLE REMEDIES.—A person is not
  269  entitled to a judgment under multiple bad faith remedies,
  270  whether under statute or common law.
  271  
  272  ================= T I T L E  A M E N D M E N T ================
  273  And the title is amended as follows:
  274         Delete lines 93 - 160
  275  and insert:
  276         providing an exception to the circumstances under
  277         which a person who is damaged may bring a civil action
  278         against an insurer; adding a cause of action against
  279         insurers in certain circumstances; providing that a
  280         person is not entitled to judgments under multiple bad
  281         faith remedies; creating s. 624.156, F.S.; providing
  282         that the section applies to bad faith failure to
  283         settle actions against any insurer brought by a third
  284         party for a loss arising out of the ownership,
  285         maintenance, or use of a motor vehicle under specified
  286         circumstances; providing that insurers have a duty of
  287         good faith; defining the term “bad faith failure to
  288         settle”; specifying best practice standards for
  289         insurers upon receiving notice of a claim or a demand
  290         for settlement; specifying certain requirements for
  291         insurer communications to an insured in handling
  292         third-party claims; specifying requirements for the
  293         insurer when a loss involves multiple claimants under
  294         certain conditions; specifying conditions precedent
  295         for claimants filing third-party bad faith failure to
  296         settle actions; specifying requirements for
  297         information that must be included in a demand for
  298         settlement; requiring a demand for settlement to
  299         release the insured from liability under certain
  300         conditions; requiring the demand for settlement be
  301         served upon the insurer at the address designated with
  302         the Department of Financial Services; prohibiting
  303         claimants from placing conditions on acceptance of a
  304         demand for settlement other than electing the right to
  305         examine the insured under oath regarding certain
  306         information; authorizing claimants to examine insureds
  307         under oath under certain conditions; authorizing the
  308         claimant to request the insured bring relevant
  309         documents to the examination under oath; prohibiting
  310         the claimant from examining the insured under oath
  311         regarding liability; requiring the claimant, insurer,
  312         and insured to cooperate in scheduling the examination
  313         under oath; specifying the timeframe within which the
  314         examination must take place; authorizing the claimant
  315         to withdraw the demand for settlement if the insured
  316         refuses to submit to an examination under oath;
  317         authorizing an insurer to accept a demand for
  318         settlement if the insured refuses to submit to an
  319         examination under oath; absolving an insurer of a duty
  320         to defend and of liability under certain
  321         circumstances; specifying the timeframe within which a
  322         claimant may withdraw a demand for settlement;
  323         providing that insurers may not be held liable in a
  324         third-party bad faith failure to settle action if they
  325         tender policy limits within a certain timeframe;
  326         specifying that insurers that accept demands for
  327         settlement are entitled to releases of their insureds;
  328         providing an exception; requiring claimants to prove
  329         in any third-party bad faith failure to settle action
  330         by a preponderance of the evidence that the insurer
  331         violated its duty of good faith and in bad faith
  332         failed to settle; specifying factors for the trier of
  333         fact to consider in determining whether an insurer
  334         violated its duty of good faith and in bad faith
  335         failed to settle; requiring the trier of fact to be
  336         informed of an excess judgment; prohibiting disclosure
  337         of certain judgment information to the trier of fact;
  338         limiting damages in third-party bad faith failure to
  339         settle actions; providing that judgment creditors must
  340         be subrogated to the rights of the insured under
  341         certain circumstances; prohibiting multiple bad faith
  342         remedies; amending s.