HB 1187

1
A bill to be entitled
2An act relating to civil remedies against insurers;
3amending s. 624.155, F.S.; revising provisions relating to
4civil actions against insurers; providing a definition;
5revising the grounds for bringing an action based on the
6insurer's failure to accept an offer to settle within
7policy limits; providing who may bring such an action;
8providing requirements for bringing such an action;
9providing for the release of an insured if the insurer
10offers to settle a third-party claim within a specified
11time under certain circumstances; providing that the
12insurer has an affirmative defense if a third-party
13claimant or the insured fails to cooperate with the
14insurer; providing that an insurer is not liable for two
15or more claims that exceed the policy limits if it files
16an interpleader action or makes the policy limits
17available under arbitration; specifying responsibility for
18the payment of liens; providing that an insurer is not
19liable for amounts in excess of the policy limits if it
20makes timely payment of the appraisal amount; providing
21that certain refusals to act by the insurer are not
22presumptive evidence of bad faith; revising requirements
23relating to the preaction notice of a civil action sent to
24the Department of Financial Regulation and the insurer;
25specifying work-product protection requirements;
26prohibiting an award of fees and costs from including any
27form of multiplier or enhancement; providing that the
28provisions of the act replace the common law; amending s.
29627.311, F.S.; conforming a cross-reference; deleting an
30obsolete provision; amending s. 627.727, F.S.; revising
31and limiting the damages that are recoverable from an
32uninsured motorist carrier in a civil action; providing
33for severability; providing an effective date.
34
35Be It Enacted by the Legislature of the State of Florida:
36
37     Section 1.  Section 624.155, Florida Statutes, is amended
38to read:
39     624.155  Civil remedy.-
40     (1)  As used in the section, the term "third-party claim"
41means a claim against an insured, by one other than the insured,
42on account of harm or damage allegedly caused by an insured and
43covered by a policy of liability insurance.
44     (2)(1)  Any person may bring a civil action against an
45insurer if when such person is damaged:
46     (a)  By the insurer's a violation of any of the following
47provisions by the insurer:
48     1.  Section 626.9541(1)(i), (o), or (x);
49     2.  Section 626.9551;
50     3.  Section 626.9705;
51     4.  Section 626.9706;
52     5.  Section 626.9707; or
53     6.  Section 627.7283.
54     (b)  By the insurer's commission of any of the following
55acts by the insurer:
56     1.  Acting in gross disregard of the insured's interest by
57failing to accept a Not attempting in good faith written demand
58to settle claims within the policy limits if when, under all the
59circumstances existing at the relevant time, it could and should
60have done so, had it acted fairly and honestly toward its
61insured and with due regard for her or his interests;
62     2.  Making claims payments to insureds or beneficiaries not
63accompanied by a statement setting forth the coverage under
64which payments are being made; or
65     3.  Except as to liability coverages, failing to promptly
66settle claims, when the obligation to settle a claim has become
67reasonably clear, under one portion of the insurance policy
68coverage in order to influence settlements under other portions
69of the insurance policy coverage.
70
71Notwithstanding the provisions of the above to the contrary, a
72person pursuing a remedy under this section need not prove that
73such act was committed or performed with such frequency as to
74indicate a general business practice.
75     (3)  If a civil action is brought against an insurer
76pursuant to subparagraph (2)(b)1.:
77     (a)  Only an insured or the insured's assignee may bring
78such an action.
79     (b)  With respect to a third-party claim, an insurer does
80not violate the duty set forth in subparagraph (2)(b)1. if the
81third-party claimant does not provide a demand to settle which:
82     1.  Is in writing, signed by the third-party claimant or
83the claimant's authorized representative, and delivered to the
84insurer and the insured;
85     2.  States that it is a demand to settle made pursuant to
86this section;
87     3.  States a specified amount within the insured's policy
88limits for which the third-party claimant offers to settle its
89claim in full and to release the insured from liability;
90     4.  Is limited to one claimant and one line of coverage or,
91if not so limited, separately designates a demand for each
92claimant and each line of coverage, each of which may be
93accepted independently;
94     5.  Is submitted by a person having the legal authority to
95accept payment and to execute the release;
96     6.  Does not contain any conditions for acceptance other
97than payment of the specific amount demanded and compliance with
98the disclosure requirements of s. 627.4137; and
99     7.  Includes a detailed explanation of the coverage and
100liability issues and the facts giving rise to the claim,
101including an explanation of injuries and damages claimed; the
102names of known witnesses; and a listing and copy, if available,
103of relevant documents, including medical records, which are
104available to the third-party claimant or authorized
105representative at the time of the demand to settle. The third-
106party claimant and his or her representatives have a continuing
107duty to supplement this information as it becomes available.
108     (c)  With respect to a third-party claim, an insurer does
109not violate the duty set forth in subparagraph (2)(b)1. if,
110within 60 days after the insurer's receipt of the third-party
111claimant's written demand to settle, or within 90 days after the
112insurer's receipt of the notice of the claim, whichever is
113later, the insurer offers to pay the lesser of:
114     1.  The amount requested in the third-party claimant's
115written demand to settle; or
116     2.  The insured's policy limits, in exchange for a release
117of liability.
118     (d)  An insurer has an affirmative defense to any such
119action if the third-party claimant, the insured, or their
120representatives fail to fully cooperate in providing all
121relevant information and in presenting the claim.
122     (4)  Notwithstanding subsection (3), if two or more third-
123party claimants make competing claims arising out of a single
124occurrence, which in total exceed the available policy limits of
125one or more of the insured parties who may be liable to the
126third-party claimants, an insurer is not liable beyond the
127available policy limits for failure to pay all or any portion of
128the available policy limits to one or more of the third-party
129claimants if, within 90 days after receiving notice of the
130competing claims in excess of the available policy limits, the
131insurer:
132     (a)  Files an interpleader action under the Florida Rules
133of Civil Procedure. If the claims of the competing third-party
134claimants are found to be in excess of the policy limits, the
135third-party claimants are entitled to a prorated share of the
136policy limits as determined by the trier of fact. An insurer's
137interpleader action does not alter or amend the insurer's
138obligation to defend its insured; or
139     (b)  Pursuant to binding arbitration, makes the entire
140amount of the policy limits available for payment to the
141competing third-party claimants before a qualified arbitrator
142selected by the insurer at the expense of the insurer. The
143third-party claimants are entitled to a prorated share of the
144policy limits as determined by the arbitrator, who shall
145consider the comparative fault, if any, of each third-party
146claimant, and the total likely outcome at trial based upon the
147total of the economic and noneconomic damages submitted to the
148arbitrator for consideration. A third-party claimant whose claim
149is resolved by the arbitrator shall execute and deliver a
150general release to the insured party whose claim is resolved by
151the proceeding.
152     (5)  After settlement of a third-party claim, the third-
153party claimant's attorney is responsible for the satisfaction of
154any liens from the settlement funds to the extent such
155settlement funds are sufficient. If the third-party claimant is
156not represented by counsel, the third-party claimant shall
157provide the insurer with a written accounting of all outstanding
158liens.
159     (6)  An insurer is not liable for amounts in excess of the
160policy limits or of the award, whichever is less, if it makes
161timely payment of an appraisal award.
162     (7)  The fact that the insurer does not accept a demand to
163settle or offer policy limits under paragraph (3)(c), pay an
164appraisal award under subsection (6), or file an interpleader
165action or make policy limits available for arbitration under
166subsection (4) during the times specified does not give rise to
167a presumption that the insurer acted in bad faith.
168     (8)(2)  Any party may bring a civil action against an
169unauthorized insurer if such party is damaged by a violation of
170s. 624.401 by the unauthorized insurer.
171     (9)(3)(a)  Except for an action relating to a third-party
172claim, as a condition precedent to bringing an action under this
173section, the department and the authorized insurer must be have
174been given 60 days' written notice of the violation. If the
175department returns a notice for lack of specificity, the 60-day
176time period does shall not begin until a proper notice is filed.
177     (a)(b)  The notice shall be on a form provided by the
178department, sent by certified mail to the claim handler if known
179or, if unknown, to the specific office handling the claim, and
180shall state with specificity the following information, and such
181other information as the department may require:
182     1.  The statutory provision, including the specific
183language of the statute, which the authorized insurer allegedly
184violated.
185     2.  The facts and circumstances reasonably known to the
186insurer giving rise to the violation, stated with specificity,
187and the corrective action that the insurer needs to take to
188remedy the alleged violation.
189     3.  The name of any individual involved in the violation.
190     4.  Reference to specific policy language that is relevant
191to the violation, if any. If the person bringing the civil
192action is a third party claimant, she or he shall not be
193required to reference the specific policy language if the
194authorized insurer has not provided a copy of the policy to the
195third party claimant pursuant to written request.
196     5.  A statement that the notice is given in order to
197perfect the right to pursue the civil remedy authorized by this
198section.
199     6.  Such other information as the department may require.
200     (b)(c)  Within 20 days after of receipt of the notice, the
201department may return any notice that does not provide the
202specific information required by this section, and the
203department shall indicate the specific deficiencies contained in
204the notice. A determination by the department to return a notice
205for lack of specificity is shall be exempt from the requirements
206of chapter 120.
207     (c)(d)  No action shall lie if, within 60 days after filing
208notice, the damages are paid or the circumstances giving rise to
209the violation are corrected.
210     (d)(e)  The authorized insurer that is the recipient of the
211a notice must filed pursuant to this section shall report to the
212department on the disposition of the alleged violation.
213     (e)(f)  The applicable statute of limitations for an action
214under this section is shall be tolled for a period of 65 days by
215the mailing of the notice required by this subsection or the
216mailing of a subsequent notice required by this subsection.
217     (10)  With respect to:
218     (a)  A first-party claim, the insurer does not owe a
219fiduciary duty to the insured and retains the right to protect
220materials covered by the work-product privilege found within the
221claim processing file. The privilege must yield to inspection if
222an appropriate showing is made under the Florida Rules of Civil
223Procedure. The attorney-client privilege remains absolute.
224     (b)  A third-party claim, until a claim or action for
225payment on a policy of insurance is final, all files of an
226insurer, including papers, communications, investigatory
227reports, or other documents in the insurer's files are the
228insurer's work product and immune from production or discovery.
229Thereafter, discovery shall be determined in accordance with the
230Florida Rules of Civil Procedure. Communications between an
231insurer and its counsel which are protected under s. 90.502
232remain protected.
233     (11)(4)  Upon adverse adjudication at trial or upon appeal,
234the authorized insurer is shall be liable for damages, together
235with court costs and reasonable attorney's fees incurred by the
236plaintiff. An award of fees and costs may not include any form
237of multiplier or enhancement.
238     (12)(5)  No Punitive damages may not shall be awarded under
239this section unless the acts giving rise to the violation occur
240with such frequency as to indicate a general business practice
241and these acts are:
242     (a)  Willful, wanton, and malicious;
243     (b)  In reckless disregard for the rights of any insured;
244or
245     (c)  In reckless disregard for the rights of a beneficiary
246under a life insurance contract.
247
248Any person who pursues a claim under this subsection must shall
249post in advance the costs of discovery. Such costs shall be
250awarded to the authorized insurer if no punitive damages are not
251awarded to the plaintiff.
252     (13)(6)  This section does shall not be construed to
253authorize a class action suit against an authorized insurer or a
254civil action against the commission, the office, or the
255department or any of their employees, or to create a cause of
256action if when an authorized health insurer refuses to pay a
257claim for reimbursement on the ground that the charge for a
258service was unreasonably high or that the service provided was
259not medically necessary.
260     (14)(7)  In the absence of expressed language to the
261contrary, This section does shall not be construed to authorize
262a civil action or create a cause of action against an authorized
263insurer or its employees who, in good faith, release information
264about an insured or an insurance policy to a law enforcement
265agency in furtherance of an investigation of a criminal or
266fraudulent act relating to a motor vehicle theft or a motor
267vehicle insurance claim.
268     (15)  The civil remedies specified in this section are the
269sole remedies and causes of action for extracontractual damages
270for bad-faith failure to settle under an insurance contract. Any
271related common-law causes of action are replaced and superseded
272by this section. The provisions of this section apply to all
273cases brought pursuant to this section unless specifically
274controlled by s. 766.1185.
275     (8)  The civil remedy specified in this section does not
276preempt any other remedy or cause of action provided for
277pursuant to any other statute or pursuant to the common law of
278this state. Any person may obtain a judgment under either the
279common-law remedy of bad faith or this statutory remedy, but
280shall not be entitled to a judgment under both remedies. This
281section shall not be construed to create a common-law cause of
282action. The damages recoverable pursuant to this section shall
283include those damages which are a reasonably foreseeable result
284of a specified violation of this section by the authorized
285insurer and may include an award or judgment in an amount that
286exceeds the policy limits.
287     (16)(9)  A surety issuing a payment or performance bond on
288the construction or maintenance of a building or roadway project
289is not an insurer for purposes of subsection (2) (1).
290     Section 2.  Paragraph (k) of subsection (3) of section
291627.311, Florida Statutes, is amended to read:
292     627.311  Joint underwriters and joint reinsurers; public
293records and public meetings exemptions.-
294     (3)  The office may, after consultation with insurers
295licensed to write automobile insurance in this state, approve a
296joint underwriting plan for purposes of equitable apportionment
297or sharing among insurers of automobile liability insurance and
298other motor vehicle insurance, as an alternate to the plan
299required in s. 627.351(1). All insurers authorized to write
300automobile insurance in this state shall subscribe to the plan
301and participate therein. The plan shall be subject to continuous
302review by the office which may at any time disapprove the entire
303plan or any part thereof if it determines that conditions have
304changed since prior approval and that in view of the purposes of
305the plan changes are warranted. Any disapproval by the office
306shall be subject to the provisions of chapter 120. The Florida
307Automobile Joint Underwriting Association is created under the
308plan. The plan and the association:
309     (k)1.  Shall have no liability, and no cause of action of
310any nature shall arise against any member insurer or its agents
311or employees, agents or employees of the association, members of
312the board of governors of the association, the Chief Financial
313Officer, or the office or its representatives for any action
314taken by them in the performance of their duties or
315responsibilities under this subsection. Such immunity does not
316apply to actions for or arising out of a breach of any contract
317or agreement pertaining to insurance, or any willful tort.
318     2.  Notwithstanding the requirements of s. 624.155(3)(a),
319as a condition precedent to bringing an action against the plan
320under s. 624.155, the department and the plan must have been
321given 90 days' written notice of the violation. If the
322department returns a notice for lack of specificity, the 90-day
323time period shall not begin until a proper notice is filed. This
324notice must comply with the information requirements of s.
325624.155(3)(b). Effective October 1, 2007, this subparagraph
326shall expire unless reenacted by the Legislature prior to that
327date.
328     Section 3.  Subsection (10) of section 627.727, Florida
329Statutes, is amended to read:
330     627.727  Motor vehicle insurance; uninsured and
331underinsured vehicle coverage; insolvent insurer protection.-
332     (10)  The damages recoverable from an uninsured motorist
333carrier in an action brought under s. 624.155 shall include the
334total amount of the claimant's damages, including the amount in
335excess of the policy limits but not exceeding two times the
336policy limits, any interest on unpaid benefits, and reasonable
337attorney's fees and costs, and any damages caused by a violation
338of a law of this state. The total amount of the claimant's
339damages is recoverable whether caused by an insurer or by a
340third-party tortfeasor.
341     Section 4.  If any provision of this act or its application
342to any person or circumstance is held invalid, the invalidity
343does not affect other provisions or applications of the act
344which can be given effect without the invalid provision or
345application, and to this end the provisions of this act are
346severable.
347     Section 5.  This act shall take effect July 1, 2011.


CODING: Words stricken are deletions; words underlined are additions.