Florida Senate - 2010                             CS for SB 2108
       By the Committee on Banking and Insurance; and Senator Richter
       597-04828-10                                          20102108c1
    1                        A bill to be entitled                      
    2         An act relating to property insurance; amending s.
    3         624.424, F.S.; decreasing the maximum number of
    4         consecutive years that an insurer may use the same
    5         accountant or partner of an accounting firm for
    6         preparing its audited financial report; increasing the
    7         number of years for which an insurer is prohibited
    8         from using the same accountant or partner after such
    9         accountant or partner has been used to file a
   10         financial report for the maximum number of consecutive
   11         years as prescribed by state law; creating s. 624.611,
   12         F.S.; authorizing an insurer to submit to the Office
   13         of Insurance Regulation a plan to use financial
   14         contracts other than reinsurance contracts to provide
   15         catastrophe loss funding; providing requirements for
   16         such a plan; authorizing an insurer to take certain
   17         action if the office approves such plan; amending s.
   18         627.0629, F.S.; deleting a requirement that the Office
   19         of Insurance Regulation develop a proposed method for
   20         establishing hurricane mitigation discounts which
   21         directly correlate to the uniform home grading scale;
   22         creating s. 627.41341, F.S.; defining terms; requiring
   23         insurers to provide a notice of a change in policy
   24         terms to a policyholder under certain circumstances;
   25         specifying acts that constitute proof of notice and
   26         acceptance of a change in policy terms; providing for
   27         the continuation of prior policy terms if a notice of
   28         a change in policy terms is not provided; amending s.
   29         627.707, F.S.; requiring an insurer to determine
   30         whether damage to a structure is consistent with
   31         sinkhole loss; providing for the payment of sinkhole
   32         claims after a policyholder enters into a contract for
   33         building stabilization or foundation repairs;
   34         requiring a policyholder to contract for sinkhole
   35         repairs within a certain period of time and for such
   36         repairs to be completed within a certain period;
   37         providing exceptions; amending s. 627.7073, F.S.;
   38         providing legislative intent for the presumption of
   39         correctness of certain findings, opinions, and
   40         recommendations of a professional engineer or
   41         professional geologist; revising the content of the
   42         report that must be filed with the clerk of court by
   43         an insurer that pays a claim for sinkhole loss;
   44         requiring a seller of property that has sinkhole loss
   45         to provide a copy of the report to the buyer; amending
   46         s. 627.7074, F.S.; providing for a neutral evaluation
   47         of a sinkhole claim under certain circumstances;
   48         providing that such evaluation does not supersede an
   49         appraisal clause; providing for the disqualification
   50         of neutral evaluators; authorizing the Department of
   51         Financial Services to appoint a neutral evaluator if
   52         requested by a party; defining a term; revising
   53         procedures governing the stay of court proceedings
   54         pending the filing of the neutral evaluation;
   55         authorizing a neutral evaluator to obtain the
   56         assistance of another neutral evaluator or other
   57         professionals or experts; requiring that the neutral
   58         evaluator’s report state whether the sinkhole has
   59         caused any loss to the building; requiring that
   60         payment be made in accordance with the insurance
   61         policy if the insurer agrees to comply with the
   62         neutral evaluator’s report; amending s. 627.711, F.S.;
   63         eliminating the requirement that a uniform mitigation
   64         verification form be certified by the Department of
   65         Financial Services; eliminating provisions authorizing
   66         hurricane mitigation inspectors certified by the My
   67         Safe Florida Home Program to sign a valid uniform
   68         mitigation verification form; authorizing an insurer
   69         to accept a form from a person possessing
   70         qualifications and experience acceptable to the
   71         insurer; requiring a person to personally perform an
   72         inspection in order to sign a mitigation verification
   73         form; defining the term “misconduct” for purposes of
   74         performing an inspection and completing the mitigation
   75         verification form; providing for sanctions to be
   76         imposed against a person who commits misconduct in
   77         performing inspections or completing the mitigation
   78         verification form; requiring that evidence of fraud in
   79         the completion of the mitigation verification form be
   80         reported to the Division of Insurance Fraud; requiring
   81         the division, if it finds that probable cause of
   82         misconduct exists, to send a copy of its report to the
   83         agency responsible for the licensure of the inspector
   84         who signed the report; providing that insurers need
   85         not accept a mitigation verification form that is
   86         signed by a person against whom probable cause of
   87         misconduct was found; providing an effective date.
   89  Be It Enacted by the Legislature of the State of Florida:
   91         Section 1. Paragraph (d) of subsection (8) of section
   92  624.424, Florida Statutes, is amended to read:
   93         624.424 Annual statement and other information.—
   94         (8)
   95         (d) An insurer may not use the same accountant or partner
   96  of an accounting firm responsible for preparing the report
   97  required by this subsection for more than 5 7 consecutive years.
   98  Following this period, the insurer may not use such accountant
   99  or partner for a period of 5 2 years, but may use another
  100  accountant or partner of the same firm. An insurer may request
  101  the office to waive this prohibition based upon an unusual
  102  hardship to the insurer and a determination that the accountant
  103  is exercising independent judgment that is not unduly influenced
  104  by the insurer considering such factors as the number of
  105  partners, expertise of the partners or the number of insurance
  106  clients of the accounting firm; the premium volume of the
  107  insurer; and the number of jurisdictions in which the insurer
  108  transacts business.
  109         Section 2. Section 624.611, Florida Statutes, is created to
  110  read:
  111         624.611Catastrophe contracts.—An insurer may submit to the
  112  Office of Insurance Regulation, in advance of the hurricane
  113  season, a plan to use financial contracts other than reinsurance
  114  contracts to provide catastrophe loss funding. In such a plan,
  115  the insurer must demonstrate that the coverage, together with
  116  its reinsurance program, will provide adequate protection for
  117  policyholders in the event of a natural catastrophe. If the
  118  contract does not provide for coverage that is highly correlated
  119  with the actual losses of the insurer, the insurer must
  120  demonstrate its ability to cover the risk created by such lack
  121  of correlation. If the office approves the plan, the insurer may
  122  purchase the contracts and take credit for reinsurance for
  123  amounts expected or due from other parties to the contracts in
  124  accordance with any terms, conditions, or limitations
  125  established by the office.
  126         Section 3. Subsection (1) of section 627.0629, Florida
  127  Statutes, is amended to read:
  128         627.0629 Residential property insurance; rate filings.—
  129         (1)(a) It is the intent of the Legislature that insurers
  130  must provide savings to consumers who install or implement
  131  windstorm damage mitigation techniques, alterations, or
  132  solutions to their properties to prevent windstorm losses. A
  133  rate filing for residential property insurance must include
  134  actuarially reasonable discounts, credits, or other rate
  135  differentials, or appropriate reductions in deductibles, for
  136  properties on which fixtures or construction techniques
  137  demonstrated to reduce the amount of loss in a windstorm have
  138  been installed or implemented. The fixtures or construction
  139  techniques shall include, but not be limited to, fixtures or
  140  construction techniques which enhance roof strength, roof
  141  covering performance, roof-to-wall strength, wall-to-floor-to
  142  foundation strength, opening protection, and window, door, and
  143  skylight strength. Credits, discounts, or other rate
  144  differentials, or appropriate reductions in deductibles, for
  145  fixtures and construction techniques which meet the minimum
  146  requirements of the Florida Building Code must be included in
  147  the rate filing. All insurance companies must make a rate filing
  148  which includes the credits, discounts, or other rate
  149  differentials or reductions in deductibles by February 28, 2003.
  150  By July 1, 2007, the office shall reevaluate the discounts,
  151  credits, other rate differentials, and appropriate reductions in
  152  deductibles for fixtures and construction techniques that meet
  153  the minimum requirements of the Florida Building Code, based
  154  upon actual experience or any other loss relativity studies
  155  available to the office. The office shall determine the
  156  discounts, credits, other rate differentials, and appropriate
  157  reductions in deductibles that reflect the full actuarial value
  158  of such revaluation, which may be used by insurers in rate
  159  filings.
  160         (b)By February 1, 2011, the Office of Insurance
  161  Regulation, in consultation with the Department of Financial
  162  Services and the Department of Community Affairs, shall develop
  163  and make publicly available a proposed method for insurers to
  164  establish discounts, credits, or other rate differentials for
  165  hurricane mitigation measures which directly correlate to the
  166  numerical rating assigned to a structure pursuant to the uniform
  167  home grading scale adopted by the Financial Services Commission
  168  pursuant to s. 215.55865, including any proposed changes to the
  169  uniform home grading scale. By October 1, 2011, the commission
  170  shall adopt rules requiring insurers to make rate filings for
  171  residential property insurance which revise insurers’ discounts,
  172  credits, or other rate differentials for hurricane mitigation
  173  measures so that such rate differentials correlate directly to
  174  the uniform home grading scale. The rules may include such
  175  changes to the uniform home grading scale as the commission
  176  determines are necessary, and may specify the minimum required
  177  discounts, credits, or other rate differentials. Such rate
  178  differentials must be consistent with generally accepted
  179  actuarial principles and wind-loss mitigation studies. The rules
  180  shall allow a period of at least 2 years after the effective
  181  date of the revised mitigation discounts, credits, or other rate
  182  differentials for a property owner to obtain an inspection or
  183  otherwise qualify for the revised credit, during which time the
  184  insurer shall continue to apply the mitigation credit that was
  185  applied immediately prior to the effective date of the revised
  186  credit. Discounts, credits, and other rate differentials
  187  established for rate filings under this paragraph shall
  188  supersede, after adoption, the discounts, credits, and other
  189  rate differentials included in rate filings under paragraph (a).
  190         Section 4. Section 627.41341, Florida Statutes, is created
  191  to read:
  192         627.41341Notice of change in policy terms.—
  193         (1)As used in this section, the term:
  194         (a) Change in policy terms” means the modification,
  195  addition, or deletion of any term, coverage, duty, or condition
  196  from the prior policy. The term does not include the correction
  197  of typographical or scrivener’s errors or mandated legislative
  198  changes.
  199         (b)“Policy” means a written contract of personal lines
  200  insurance or a written agreement for or effecting insurance, or
  201  the certificate thereof, by whatever name called, and includes
  202  all clauses, riders, endorsements, and papers that are a part
  203  thereof. The term does not include a binder as described in s.
  204  627.420 unless the duration of the binder period exceeds 60
  205  days.
  206         (c)“Renewal” means the issuance and delivery by an insurer
  207  of a policy superseding at the end of the policy period a policy
  208  previously issued and delivered by the same insurer, or the
  209  issuance and delivery of a certificate or notice extending the
  210  term of a policy beyond its policy period or term. Any policy
  211  having a policy period or term of less than 6 months or any
  212  policy that does not have a fixed expiration date shall, for
  213  purposes of this section, be considered as if written for
  214  successive policy periods or terms of 6 months.
  215         (2)A renewal policy may contain a change in policy terms.
  216  If a renewal policy contains a change in policy terms, the
  217  insurer shall give the named insured a written notice of the
  218  change in policy terms, which must be enclosed along with the
  219  written notice of renewal premium required by ss. 627.4133 and
  220  627.728.
  221         (3) An insurer is not required to obtain proof that a
  222  person has received a notice of a change in policy terms.
  223  However, a certificate of mailing or any delivery confirmation
  224  of the notice of the change in policy terms to the named insured
  225  at the address shown in the policy from the United States Postal
  226  Service is proof of notice.
  227         (4) Receipt of payment of the premium for the renewal
  228  policy by the insurer is deemed to be acceptance of the new
  229  policy terms by the named insured.
  230         (5)If an insurer fails to provide the notice of a change
  231  in policy terms required under this section, the original policy
  232  terms shall remain in effect until the next renewal and the
  233  proper service of the notice of the change in policy terms or
  234  until the effective date of replacement coverage obtained by the
  235  named insured, whichever occurs first.
  236         (6) The intent of this section is to:
  237         (a) Allow an insurer to make a change in policy terms for
  238  property that the insurer wishes to continue to insure.
  239         (b) Alleviate the concern and confusion to the policyholder
  240  caused by the required policy nonrenewal for the limited issue
  241  when an insurer intends to renew the insurance policy but the
  242  new policy contains a change in policy terms.
  243         (c) Encourage policyholders to discuss their coverages with
  244  their insurance agents.
  245         Section 5. Section 627.707, Florida Statutes, is amended to
  246  read:
  247         627.707 Standards for investigation of sinkhole claims by
  248  insurers; nonrenewals.—Upon receipt of a claim for a sinkhole
  249  loss, an insurer must meet the following standards in
  250  investigating a claim:
  251         (1) The insurer must make an inspection of the insured’s
  252  premises to determine if there has been physical damage to the
  253  structure which is consistent with may be the result of sinkhole
  254  loss activity.
  255         (2) Following the insurer’s initial inspection, the insurer
  256  shall engage a professional engineer or a professional geologist
  257  to conduct testing as provided in s. 627.7072 to determine the
  258  cause of the loss within a reasonable professional probability
  259  and issue a report as provided in s. 627.7073, if:
  260         (a) The insurer is unable to identify a valid cause of the
  261  damage or discovers damage to the structure which is consistent
  262  with sinkhole loss; or
  263         (b) The policyholder demands testing in accordance with
  264  this section or s. 627.7072 and coverage under the policy is
  265  available if sinkhole loss is verified.
  266         (3) Following the initial inspection of the insured
  267  premises, the insurer shall provide written notice to the
  268  policyholder disclosing the following information:
  269         (a) What the insurer has determined to be the cause of
  270  damage, if the insurer has made such a determination.
  271         (b) A statement of the circumstances under which the
  272  insurer is required to engage a professional engineer or a
  273  professional geologist to verify or eliminate sinkhole loss and
  274  to engage a professional engineer to make recommendations
  275  regarding land and building stabilization and foundation repair.
  276         (c) A statement regarding the right of the policyholder to
  277  request testing by a professional engineer or a professional
  278  geologist and the circumstances under which the policyholder may
  279  demand certain testing.
  280         (4) If the insurer determines that there is no sinkhole
  281  loss, the insurer may deny the claim. If the insurer denies the
  282  claim, without performing testing under s. 627.7072, the
  283  policyholder may demand testing by the insurer under s.
  284  627.7072. The policyholder’s demand for testing must be
  285  communicated to the insurer in writing after the policyholder’s
  286  receipt of the insurer’s denial of the claim.
  287         (5)(a) Subject to paragraph (b), if a sinkhole loss is
  288  verified, the insurer shall pay to stabilize the land and
  289  building and repair the foundation in accordance with the
  290  recommendations of the professional engineer as provided under
  291  s. 627.7073, with notice to and in consultation with the
  292  policyholder, subject to the coverage and terms of the policy.
  293  The insurer shall pay for other repairs to the structure and
  294  contents in accordance with the terms of the policy.
  295         (b) Once a The insurer may limit its payment to the actual
  296  cash value of the sinkhole loss, not including underpinning or
  297  grouting or any other repair technique performed below the
  298  existing foundation of the building, until the policyholder
  299  enters into a contract for the performance of building
  300  stabilization or foundation repairs, the claim shall be paid up
  301  to the full cost of the stabilization or foundation repairs and
  302  up to full replacement cost for structural repairs as set forth
  303  in this paragraph, less the insured’s deductible. Once the
  304  policyholder enters into a contract for the performance of
  305  building stabilization or foundation repairs, the insurer may:.
  306         1. Limit its initial payment to 10 percent of the estimated
  307  costs to implement the building stabilization and foundation
  308  repairs; or
  309         2. Limit its initial payment to the actual cash value of
  310  the sinkhole loss for structural repairs.
  312  However, after the policyholder enters into the contract for the
  313  performance of building stabilization or foundation repairs, the
  314  insurer shall pay the amounts necessary to begin and perform
  315  such repairs as the work is performed and the expenses are
  316  incurred. Final payments for the structural or stabilization and
  317  foundation repair work shall be remitted once such work is
  318  complete and in accordance with the terms of the policy. The
  319  insurer may not require the policyholder to advance payment for
  320  such repairs. If repair covered by a personal lines residential
  321  property insurance policy has begun and the professional
  322  engineer selected or approved by the insurer determines that the
  323  repair cannot be completed within the policy limits, the insurer
  324  must either complete the professional engineer’s recommended
  325  repair or tender the policy limits to the policyholder without a
  326  reduction for the repair expenses incurred.
  327         (c)The policyholder shall enter into such contract for
  328  repairs within 90 days after the insurance company approves
  329  coverage for a sinkhole loss to prevent additional damage to the
  330  building or structure. The 90-day time period may be extended
  331  for an additional reasonable time period if the policyholder is
  332  unable to find a qualified person or entity to contract for such
  333  repairs within the 90-day time period based upon factors beyond
  334  the policyholder’s control.
  335         (d)The stabilization and all other repairs to the
  336  structure and contents must be completed within 12 months after
  337  entering into the contract for repairs as described in paragraph
  338  (c) unless:
  339         1. There is a mutual agreement between the insurer and the
  340  insured;
  341         2. The stabilization and all other repairs cannot be
  342  completed due to factors beyond the control of the insured which
  343  reasonably prevent completion;
  344         3. The claim is involved with the neutral evaluation
  345  process under s. 627.7074; or
  346         4. The claim is in litigation.
  347         (e)(c) Upon the insurer’s obtaining the written approval of
  348  the policyholder and any lienholder, the insurer may make
  349  payment directly to the persons selected by the policyholder to
  350  perform the land and building stabilization and foundation
  351  repairs. The decision by the insurer to make payment to such
  352  persons does not hold the insurer liable for the work performed.
  353         (6) Except as provided in subsection (7), the fees and
  354  costs of the professional engineer or the professional geologist
  355  shall be paid by the insurer.
  356         (7) If the insurer obtains, pursuant to s. 627.7073,
  357  written certification that there is no sinkhole loss or that the
  358  cause of the damage was not sinkhole activity, and if the
  359  policyholder has submitted the sinkhole claim without good faith
  360  grounds for submitting such claim, the policyholder shall
  361  reimburse the insurer for 50 percent of the actual costs of the
  362  analyses and services provided under ss. 627.7072 and 627.7073;
  363  however, a policyholder is not required to reimburse an insurer
  364  more than $2,500 with respect to any claim. A policyholder is
  365  required to pay reimbursement under this subsection only if the
  366  insurer, prior to ordering the analysis under s. 627.7072,
  367  informs the policyholder in writing of the policyholder’s
  368  potential liability for reimbursement and gives the policyholder
  369  the opportunity to withdraw the claim.
  370         (8) No insurer shall nonrenew any policy of property
  371  insurance on the basis of filing of claims for partial loss
  372  caused by sinkhole damage or clay shrinkage as long as the total
  373  of such payments does not exceed the current policy limits of
  374  coverage for property damage for the policy in effect on the
  375  date of the loss, and provided the insured has repaired the
  376  structure in accordance with the engineering recommendations
  377  upon which any payment or policy proceeds were based.
  378         (9) The insurer may engage a professional structural
  379  engineer to make recommendations as to the repair of the
  380  structure.
  381         Section 6. Section 627.7073, Florida Statutes, is amended
  382  to read:
  383         627.7073 Sinkhole reports.—
  384         (1) Upon completion of testing as provided in s. 627.7072,
  385  the professional engineer or professional geologist shall issue
  386  a report and certification to the insurer, with an additional
  387  copy and certification for the insurer to forward to and the
  388  policyholder as provided in this section.
  389         (a) Sinkhole loss is verified if, based upon tests
  390  performed in accordance with s. 627.7072, a professional
  391  engineer or a professional geologist issues a written report and
  392  certification stating:
  393         1. That the cause of the actual physical and structural
  394  damage is sinkhole activity within a reasonable professional
  395  probability.
  396         2. That the analyses conducted were of sufficient scope to
  397  identify sinkhole activity as the cause of damage within a
  398  reasonable professional probability.
  399         3. A description of the tests performed.
  400         4. A recommendation by the professional engineer of methods
  401  for stabilizing the land and building and for making repairs to
  402  the foundation.
  403         (b) If sinkhole activity is eliminated as the cause of
  404  damage to the structure, the professional engineer or
  405  professional geologist shall issue a written report and
  406  certification to the policyholder and the insurer stating:
  407         1. That the cause of the damage is not sinkhole activity
  408  within a reasonable professional probability.
  409         2. That the analyses and tests conducted were of sufficient
  410  scope to eliminate sinkhole activity as the cause of damage
  411  within a reasonable professional probability.
  412         3. A statement of the cause of the damage within a
  413  reasonable professional probability.
  414         4. A description of the tests performed.
  415         (c) The respective findings, opinions, and recommendations
  416  of the professional engineer or professional geologist as to the
  417  cause of distress to the property and the findings, opinions,
  418  and recommendations of the professional engineer as to land and
  419  building stabilization and foundation repair as required by s.
  420  627.707(2), shall be presumed correct. The presumption of
  421  correctness is based upon the public policy concerns relating to
  422  the availability and affordability of sinkhole coverage to
  423  provide consistency in claims handling and reduce the number of
  424  disputed sinkhole claims and is therefore a presumption shifting
  425  the burden of proof under s. 90.304.
  426         (2)(a) Any insurer that has paid a claim for a sinkhole
  427  loss shall record file a copy of the report and certification,
  428  prepared pursuant to subsection (1), including the legal
  429  description of the real property and the name of the property
  430  owner and the amount paid by the insurer, with the county clerk
  431  of court, who shall record the report and certification. The
  432  insurer shall also record a copy of any report prepared on
  433  behalf of the insured or the insured’s representative which
  434  indicates that sinkhole loss caused the damage claimed. The
  435  insurer shall bear the cost of filing and recording one or more
  436  reports the report and certification. There shall be no cause of
  437  action or liability against an insurer for compliance with this
  438  section. The recording of the report and certification does not:
  439         1. Constitute a lien, encumbrance, or restriction on the
  440  title to the real property or constitute a defect in the title
  441  to the real property;
  442         2. Create any cause of action or liability against any
  443  grantor of the real property for breach of any warranty of good
  444  title or warranty against encumbrances; or
  445         3. Create any cause of action or liability against any
  446  title insurer that insures the title to the real property.
  447         (b) The seller of real property upon which a sinkhole claim
  448  has been made by the seller and paid by the insurer shall
  449  disclose to the buyer of such property that a claim has been
  450  paid, the amount of the payment, and whether or not the full
  451  amount of the proceeds were used to repair the sinkhole damage.
  452  The seller shall also provide to the buyer a copy of the report
  453  prepared pursuant to subsection (1) and any report prepared on
  454  behalf of the insured.
  455         Section 7. Section 627.7074, Florida Statutes, is amended
  456  to read:
  457         627.7074 Alternative procedure for resolution of disputed
  458  sinkhole insurance claims.—
  459         (1) As used in this section, the term:
  460         (a) “Neutral evaluation” means the alternative dispute
  461  resolution provided for in this section.
  462         (b) “Neutral evaluator” means a professional engineer or a
  463  professional geologist who has completed a course of study in
  464  alternative dispute resolution designed or approved by the
  465  department for use in the neutral evaluation process, who is
  466  determined to be fair and impartial.
  467         (2)(a) The department shall certify and maintain a list of
  468  persons who are neutral evaluators.
  469         (b) The department shall prepare a consumer information
  470  pamphlet for distribution by insurers to policyholders which
  471  clearly describes the neutral evaluation process and includes
  472  information and forms necessary for the policyholder to request
  473  a neutral evaluation.
  474         (3) Neutral evaluation is available to either party if a
  475  sinkhole report has been issued pursuant to s. 627.7073.
  476  Following the receipt of the report provided under s. 627.7073
  477  or the denial of a claim for a sinkhole loss, the insurer shall
  478  notify the policyholder of his or her right to participate in
  479  the neutral evaluation program under this section. Neutral
  480  evaluation supersedes the alternative dispute resolution process
  481  under s. 627.7015, but does not supersede the appraisal clause,
  482  if provided by the insurance policy. The insurer shall provide
  483  to the policyholder the consumer information pamphlet prepared
  484  by the department pursuant to paragraph (2)(b).
  485         (4) Neutral evaluation is nonbinding, but mandatory if
  486  requested by either party. A request for neutral evaluation may
  487  be filed with the department by the policyholder or the insurer
  488  on a form approved by the department. The request for neutral
  489  evaluation must state the reason for the request and must
  490  include an explanation of all the issues in dispute at the time
  491  of the request. Filing a request for neutral evaluation tolls
  492  the applicable time requirements for filing suit for a period of
  493  60 days following the conclusion of the neutral evaluation
  494  process or the time prescribed in s. 95.11, whichever is later.
  495         (5) Neutral evaluation shall be conducted as an informal
  496  process in which formal rules of evidence and procedure need not
  497  be observed. A party to neutral evaluation is not required to
  498  attend neutral evaluation if a representative of the party
  499  attends and has the authority to make a binding decision on
  500  behalf of the party. All parties shall participate in the
  501  evaluation in good faith.
  502         (6) The insurer shall pay the costs associated with the
  503  neutral evaluation.
  504         (7) Upon receipt of a request for neutral evaluation, the
  505  department shall allow the parties to submit requests to
  506  disqualify neutral evaluators on the list for cause. For
  507  purposes of this subsection, a ground for cause is required to
  508  be found by the department only when:
  509         (a)A familial relationship exists between the neutral
  510  evaluator and either party or their representatives within the
  511  third degree;
  512         (b) The proposed neutral evaluator has, in a professional
  513  capacity, previously represented either party or their
  514  representatives in the same or a substantially related matter;
  515         (c) The proposed neutral evaluator has, in a professional
  516  capacity, represented another person in the same or a
  517  substantially related matter, and that person’s interests are
  518  materially adverse to the interests of the parties; or
  519         (d) The proposed neutral evaluator works in the same firm
  520  or corporation as a person who has, in a professional capacity,
  521  previously represented either party or their respective
  522  representatives in the same or a substantially related matter.
  524  The department shall appoint a neutral evaluator from the
  525  department’s provide the parties a list of certified neutral
  526  evaluators and if requested by either party, shall appoint a
  527  neutral evaluator who can determine both causation and method of
  528  repair. The department shall allow each party to disqualify one
  529  neutral evaluator without cause. The parties shall mutually
  530  select a neutral evaluator from the list and promptly inform the
  531  department. If the parties cannot agree to a neutral evaluator
  532  within 10 business days, the department shall appoint a neutral
  533  evaluator from the department list. Upon selection or
  534  appointment, the department shall promptly refer the request to
  535  the neutral evaluator. Within 5 business days after the
  536  referral, the neutral evaluator shall notify the policyholder
  537  and the insurer of the date, time, and place of the neutral
  538  evaluation conference. The conference may be held by telephone,
  539  if feasible and desirable. The neutral evaluation conference
  540  shall be held within 45 days after the receipt of the request by
  541  the department. For purposes of this paragraph, the term
  542  “substantially related matter” means participation by the
  543  neutral evaluator on the same claim, property, or any adjacent
  544  property.
  545         (8) The department shall adopt rules of procedure for the
  546  neutral evaluation process.
  547         (9) For policyholders not represented by an attorney, a
  548  consumer affairs specialist of the department or an employee
  549  designated as the primary contact for consumers on issues
  550  relating to sinkholes under s. 20.121 shall be available for
  551  consultation to the extent that he or she may lawfully do so.
  552         (10) Evidence of an offer to settle a claim during the
  553  neutral evaluation process, as well as any relevant conduct or
  554  statements made in negotiations concerning the offer to settle a
  555  claim, is inadmissible to prove liability or absence of
  556  liability for the claim or its value, except as provided in
  557  subsection (13).
  558         (11) Regardless of when invoked, any court proceeding
  559  related to the subject matter of the neutral evaluation shall be
  560  stayed pending completion of the neutral evaluation and for 5
  561  days after the filing of the neutral evaluator’s report with the
  562  court.
  563         (12) If the neutral evaluator, based upon his or her
  564  professional training and credentials, is qualified only to
  565  determine the causation issue or the method-of-repair issue, the
  566  department shall allow the neutral evaluator to enlist the
  567  assistance of another professional from the qualified neutral
  568  evaluators list, not previously stricken by parties with respect
  569  to the subject evaluation, who, based upon his or her
  570  professional training and credentials, is able to provide an
  571  opinion as to the other disputed issue. Any professional who, if
  572  appointed as the neutral evaluator, would be disqualified for
  573  any reason enumerated in subsection (7) must be disqualified. In
  574  addition, the neutral evaluator may use the services of other
  575  experts or professionals on the qualified neutral evaluators
  576  list, or may retain a contractor, as necessary to ensure that
  577  all items in dispute are addressed in order to complete the
  578  neutral evaluation. The neutral evaluator may request that the
  579  entity that performed testing pursuant to s. 627.7072 perform
  580  such additional reasonable testing deemed necessary in the
  581  professional opinion of the neutral evaluator to complete the
  582  neutral evaluation.
  583         (13)(12) For all matters that are not resolved by the
  584  parties at the conclusion of the neutral evaluation, the neutral
  585  evaluator shall prepare a report stating that in his or her
  586  opinion the sinkhole loss has been verified or eliminated within
  587  a reasonable degree of professional probability and, if
  588  verified, whether the sinkhole loss has caused any structural or
  589  cosmetic damage to the building and, if so, the need for and
  590  estimated costs of stabilizing the land and any covered
  591  structures or buildings and other appropriate remediation or
  592  structural repairs that are necessary due to the sinkhole loss.
  593  The evaluator’s report shall be sent to all parties in
  594  attendance at the neutral evaluation and to the department.
  595         (14)(13) The recommendation of the neutral evaluator is not
  596  binding on any party, and the parties retain access to court.
  597  The neutral evaluator’s written recommendation is admissible in
  598  any subsequent action or proceeding relating to the claim or to
  599  the cause of action giving rise to the claim.
  600         (15)(14) If the neutral evaluator first verifies the
  601  existence of a sinkhole and, second, recommends the need for and
  602  estimates costs of stabilizing the land and any covered
  603  structures or buildings and other appropriate remediation or
  604  structural repairs, which costs exceed the amount that the
  605  insurer has offered to pay the policyholder, the insurer is
  606  liable to the policyholder for up to $2,500 in attorney’s fees
  607  for the attorney’s participation in the neutral evaluation
  608  process. For purposes of this subsection, the term “offer to
  609  pay” means a written offer signed by the insurer or its legal
  610  representative and delivered to the policyholder within 10 days
  611  after the insurer receives notice that a request for neutral
  612  evaluation has been made under this section.
  613         (16)(15) If the insurer timely agrees in writing to comply
  614  and timely complies with the recommendation of the neutral
  615  evaluator, but the policyholder declines to resolve the matter
  616  in accordance with the recommendation of the neutral evaluator
  617  pursuant to this section:
  618         (a) The insurer is not liable for extracontractual damages
  619  related to a claim for a sinkhole loss but only as related to
  620  the issues determined by the neutral evaluation process. This
  621  section does not affect or impair claims for extracontractual
  622  damages unrelated to the issues determined by the neutral
  623  evaluation process contained in this section; and
  624         (b) The insurer is not liable for attorney’s fees under s.
  625  627.428 or other provisions of the insurance code unless the
  626  policyholder obtains a judgment that is more favorable than the
  627  recommendation of the neutral evaluator.
  628         (17) If the insurer agrees to comply with the neutral
  629  evaluator’s report, payment for stabilizing the land and
  630  building and repairing the foundation and structure shall be
  631  made in accordance with the terms and conditions of the
  632  applicable insurance policy.
  633         Section 8. Section 627.711, Florida Statutes, is amended to
  634  read:
  635         627.711 Notice of premium discounts for hurricane loss
  636  mitigation; uniform mitigation verification inspection form.—
  637         (1) Using a form prescribed by the Office of Insurance
  638  Regulation, the insurer shall clearly notify the applicant or
  639  policyholder of any personal lines residential property
  640  insurance policy, at the time of the issuance of the policy and
  641  at each renewal, of the availability and the range of each
  642  premium discount, credit, other rate differential, or reduction
  643  in deductibles, and combinations of discounts, credits, rate
  644  differentials, or reductions in deductibles, for properties on
  645  which fixtures or construction techniques demonstrated to reduce
  646  the amount of loss in a windstorm can be or have been installed
  647  or implemented. The prescribed form shall describe generally
  648  what actions the policyholders may be able to take to reduce
  649  their windstorm premium. The prescribed form and a list of such
  650  ranges approved by the office for each insurer licensed in the
  651  state and providing such discounts, credits, other rate
  652  differentials, or reductions in deductibles for properties
  653  described in this subsection shall be available for electronic
  654  viewing and download from the Department of Financial Services’
  655  or the Office of Insurance Regulation’s Internet website. The
  656  Financial Services Commission may adopt rules to implement this
  657  subsection.
  658         (2) By July 1, 2007, The Financial Services Commission
  659  shall develop by rule a uniform mitigation verification
  660  inspection form that shall be used by all insurers when
  661  submitted by policyholders for the purpose of factoring
  662  discounts for wind insurance. In developing the form, the
  663  commission shall seek input from insurance, construction, and
  664  building code representatives. Further, the commission shall
  665  provide guidance as to the length of time the inspection results
  666  are valid. An insurer shall accept as valid a uniform mitigation
  667  verification form certified by the Department of Financial
  668  Services or signed by:
  669         (a)A hurricane mitigation inspector certified by the My
  670  Safe Florida Home program;
  671         (a)(b) A building code inspector certified under s.
  672  468.607;
  673         (b)(c) A general, building, or residential contractor
  674  licensed under s. 489.111;
  675         (c)(d) A professional engineer licensed under s. 471.015
  676  who has passed the appropriate equivalency test of the building
  677  code training program as required by s. 553.841; or
  678         (d)(e) A professional architect licensed under s. 481.213.;
  679  or
  680         (f)Any other individual or entity recognized by the
  681  insurer as possessing the necessary qualifications to properly
  682  complete a uniform mitigation verification form.
  684  An insurer may, but is not required to, accept a form from any
  685  other person possessing qualifications and experience acceptable
  686  to the insurer.
  687         (3)A person who is authorized to sign a mitigation
  688  verification form must inspect the structures referenced by the
  689  form personally, not through employees or other persons, and
  690  must certify or attest to personal inspection of the structures
  691  referenced by the form.
  692         (4) An individual or entity that signs a uniform mitigation
  693  form may not commit misconduct in performing hurricane
  694  mitigation inspections or in completing a uniform mitigation
  695  form which causes financial harm to an insured or the insurer or
  696  jeopardizes an insured’s health and safety. Misconduct occurs
  697  when an authorized mitigation inspector signs a uniform
  698  mitigation verification form that:
  699         (a) Falsely indicates that he or she personally inspected
  700  the structures referenced by the form;
  701         (b) Falsely indicates the existence of a feature that
  702  entitles an insured to a mitigation discount that the inspector
  703  knows does not exist or did not personally inspect;
  704         (c) Contains erroneous information due to the gross
  705  negligence of the inspector; or
  706         (d) Contains demonstrably false information regarding the
  707  existence of mitigation features that could give an insured a
  708  false evaluation of the ability of the structure to withstand
  709  major damage from a hurricane endangering the safety of the
  710  insured’s life and property.
  711         (5) The licensing board of an authorized mitigation
  712  inspector that violates subsection (4) may commence disciplinary
  713  proceedings and impose administrative fines and other sanctions
  714  authorized under the inspector’s licensing act.
  715         (6) An insurer, person, or other entity that obtains
  716  evidence of fraud or evidence that an inspector has made false
  717  statements in the completion of a mitigation inspection form
  718  shall file a report with the Division of Insurance Fraud, along
  719  with all of the evidence in its possession which supports the
  720  allegation of fraud or falsity. An insurer, person, or other
  721  entity making the report is immune from liability, pursuant to
  722  s. 626.989(4), for any statements made in the report, during the
  723  investigation, or in connection with the report. The Division of
  724  Insurance Fraud shall issue an investigative report if it finds
  725  that probable cause exists to believe that the inspector made
  726  intentionally false or fraudulent statements in the inspection
  727  form. Upon conclusion of the investigation and a finding of
  728  probable cause that a violation has occurred, the Division of
  729  Insurance Fraud shall send a copy of the investigative report to
  730  the office and a copy to the agency responsible for the
  731  professional licensure of the inspector, whether or not a
  732  prosecutor takes action based upon the report.
  733         (7)(3) An individual or entity who knowingly provides or
  734  utters a false or fraudulent mitigation verification form with
  735  the intent to obtain or receive a discount on an insurance
  736  premium to which the individual or entity is not entitled
  737  commits a misdemeanor of the first degree, punishable as
  738  provided in s. 775.082 or s. 775.083.
  739         Section 9. This act shall take effect July 1, 2010.