Florida Senate - 2018                                    SB 1168
       By Senator Steube
       23-01236C-18                                          20181168__
    1                        A bill to be entitled                      
    2         An act relating to insurance; amending s. 627.062,
    3         F.S.; providing that certain attorney fees and costs
    4         paid by property insurers may not be included in the
    5         property insurer’s rate base and may not be used to
    6         justify a rate increase or rate change; amending s.
    7         627.409, F.S.; adding and revising conditions under
    8         which certain misrepresentations, omissions,
    9         concealments of fact, or incorrect statements may
   10         prevent recovery under an insurance policy or annuity
   11         contract; amending s. 627.422, F.S.; providing that
   12         personal lines residential and commercial residential
   13         property insurance policies may not restrict the
   14         assignment of post-loss benefits; creating s.
   15         627.7152, F.S.; providing that an agreement to assign
   16         post-loss benefits of a residential homeowner’s
   17         property insurance is not valid unless specified
   18         conditions are met; requiring the assignee, under
   19         certain circumstances, to provide a copy of the
   20         assignment agreement and a specified written estimate
   21         to the insurer within a specified timeframe; requiring
   22         the estimate to be timely updated if conditions
   23         require a change in scope; providing construction
   24         relating to failure to comply with such requirement;
   25         authorizing an insurer to inspect the property at any
   26         time; providing that an insurer’s failure to make a
   27         certain attempt to inspect the property and deliver a
   28         certain notice, under certain circumstances, may estop
   29         certain assertions by the insurer; providing that an
   30         assignee’s acceptance of a valid assignment agreement
   31         constitutes a waiver by the assignee or transferee, or
   32         any subcontractor of the assignee or transferee, of
   33         certain claims against named insureds, except under
   34         specified circumstances; providing construction
   35         relating to the validity of such waiver; requiring an
   36         assignee, before initiating certain litigation against
   37         an insurer, to provide a certain invoice and estimate
   38         to the insurer within a specified timeframe; providing
   39         that certain offers of settlement in certain civil
   40         actions may not be made until after a specified
   41         timeframe; requiring the office to require each
   42         insurer to annually report specified data relating to
   43         certain claims paid pursuant to assignment agreements;
   44         authorizing the office to adopt rules; providing
   45         applicability; providing an effective date.
   47  Be It Enacted by the Legislature of the State of Florida:
   49         Section 1. Subsection (11) is added to section 627.062,
   50  Florida Statutes, to read:
   51         627.062 Rate standards.—
   52         (11) Attorney fees and costs paid by a property insurer
   53  pursuant to s. 627.428 may not be included in the property
   54  insurer’s rate base and may not be used to justify a rate
   55  increase or rate change.
   56         Section 2. Subsection (1) of section 627.409, Florida
   57  Statutes, is amended to read:
   58         627.409 Representations in applications; warranties.—
   59         (1) Any statement or description made by or on behalf of an
   60  insured or annuitant in an application for an insurance policy
   61  or annuity contract, or in negotiations for a policy or
   62  contract, is a representation and not a warranty. Except as
   63  provided in subsection (3), a misrepresentation, omission,
   64  concealment of fact, or incorrect statement may prevent recovery
   65  under the contract or policy only if the misrepresentation,
   66  omission, concealment of fact, or incorrect statement directly
   67  relates to the cause of the claim being made and any of the
   68  following apply:
   69         (a) The misrepresentation, omission, concealment, or
   70  statement is fraudulent or is material to the acceptance of the
   71  risk or to the hazard assumed by the insurer.
   72         (b) If the true facts relative to the loss claimed had been
   73  known to the insurer pursuant to a policy requirement or other
   74  requirement, the insurer in good faith would not have:
   75         1. Issued the policy or contract;, would not have
   76         2. Issued the policy or contract it at a the same premium
   77  rate at least 20 percent higher than the rate actually charged;,
   78  would not have
   79         3. Issued a policy or contract in as large an amount;, or
   80         4.would not have Provided coverage with respect to the
   81  hazard resulting in the loss.
   82         Section 3. Section 627.422, Florida Statutes, is amended to
   83  read:
   84         627.422 Assignment of policies or post-loss benefits.—A
   85  policy may be assignable, or not assignable, as provided by its
   86  terms.
   87         (1) LIFE OR HEALTH INSURANCE POLICIES.—Subject to its terms
   88  relating to assignability, any life or health insurance policy
   89  under the terms of which the beneficiary may be changed upon the
   90  sole request of the policyowner may be assigned either by pledge
   91  or transfer of title, by an assignment executed by the
   92  policyowner alone and delivered to the insurer, whether or not
   93  the pledgee or assignee is the insurer. Any such assignment
   94  shall entitle the insurer to deal with the assignee as the owner
   95  or pledgee of the policy in accordance with the terms of the
   96  assignment, until the insurer has received at its home office
   97  written notice of termination of the assignment or pledge or
   98  written notice by or on behalf of some other person claiming
   99  some interest in the policy in conflict with the assignment.
  101  POLICIES.-A personal lines residential property insurance policy
  102  or a commercial residential property insurance policy may not
  103  restrict the assignment of post-loss benefits.
  104         Section 4. Section 627.7152, Florida Statutes, is created
  105  to read:
  106         627.7152 Assignment of residential homeowner’s property
  107  insurance post-loss benefits; prelitigation invoice; offer of
  108  settlement; annual reporting.—
  109         (1)An agreement to assign post-loss benefits of a
  110  residential homeowner’s property insurance policy is not valid
  111  unless the agreement:
  112         (a)Is in writing;
  113         (b)Is limited to claims for work performed or work to be
  114  performed by the assignee;
  115         (c)Contains an accurate and up-to-date statement of the
  116  scope of work to be performed;
  117         (d)Allows the insured to rescind the assignment within 7
  118  days after the execution of the assignment;
  119         (e)Provides that the insured may be responsible for
  120  payment for any work performed before the rescission of the
  121  assignment; and
  122         (f)Contains a provision, in 14-point boldfaced type, which
  123  allows the insured to rescind the agreement within 7 days after
  124  execution of the assignment, and with a notice that if the
  125  assignment is rescinded, the homeowner is responsible to pay for
  126  the work done up to the date of the rescission and that the
  127  homeowner is not otherwise responsible to pay for the work
  128  covered by the assignment.
  129         (2)(a) The assignee shall provide a copy of the assignment
  130  agreement to the insurer within 7 days after execution of the
  131  agreement, or within 48 hours after beginning nonemergency work,
  132  whichever is earlier, if the insurer has a facsimile number and
  133  e-mail address on its website designated for the delivery of
  134  such documents. This notice must be accompanied by a written
  135  estimate of the work to be done, with unit prices indicated
  136  where appropriate, and the basis for calculating lump sum fees
  137  if unit prices are inappropriate. The estimate must be timely
  138  updated if conditions require a change in scope. The failure to
  139  comply with this requirement constitutes a defense to any
  140  payment obligation under the policy or the assignment, if the
  141  insurer can establish prejudice resulting from the failure.
  142         (b) The insurer may inspect the property at any time. If
  143  the insurer fails to attempt in good faith to do so within 7
  144  days after learning of the loss and promptly deliver to the
  145  assignee written notice of any perceived deficiency in the
  146  assignee’s notice or the work being performed, the failure may
  147  be raised to estop the insurer from asserting that work done was
  148  not reasonably necessary or that the notice was insufficient to
  149  comply with this section.
  150         (3)Notwithstanding any other law, the acceptance by an
  151  assignee of a valid assignment agreement constitutes a waiver by
  152  the assignee or transferee, and any subcontractor of the
  153  assignee or transferee, of any and all claims against named
  154  insureds for payment arising from the specified loss, except
  155  that all named insureds remain responsible for:
  156         (a) The payment of any deductible amount provided for by
  157  the terms of the insurance policy;
  158         (b) The payment for work performed before the rescission of
  159  the assignment agreement, if there is a rescission;
  160         (c) The cost of any betterment specifically authorized by
  161  the insured in a writing that identifies the work as betterment
  162  for which the insured will be liable; and
  163         (d)A misrepresentation of the existence of homeowner’s
  164  coverage by the homeowner.
  166  The waiver in this subsection is valid even if the assignment
  167  agreement is determined to be invalid.
  168         (4)No later than 30 days before an assignee initiates
  169  litigation against an insurer relating to a residential
  170  homeowner’s property insurance claim, the assignee must provide
  171  the insurer an invoice for all work that has been performed and
  172  a current estimate of work remaining to be performed.
  173         (5) In a civil action relating to a residential homeowner’s
  174  property insurance claim under a policy in which an assignment
  175  agreement under this section was executed, an offer of
  176  settlement under s. 768.79 by any party may be made no earlier
  177  than 30 days after the civil action has commenced.
  178         (6) The office shall require each insurer to report by
  179  January 30, 2021, and each year thereafter, data on each
  180  residential property insurance claim paid in the prior calendar
  181  year pursuant to an assignment agreement. Such data must
  182  include, but are not limited to, specific data about claims
  183  adjustment and settlement timeframes and trends grouped by
  184  whether litigated or not litigated, by loss adjustment expenses,
  185  and by the amount and type of attorney fees incurred or paid.
  186  The office may adopt rules to administer this subsection.
  187         (7)This section does not apply to:
  188         (a)An assignment, transfer, or conveyance granted to a
  189  subsequent purchaser of the property with an insurable interest
  190  in the property following a loss; or
  191         (b)A power of attorney under chapter 709 which grants to a
  192  management company, family member, guardian, or similarly
  193  situated person of an insured the authority to act on behalf of
  194  an insured as it relates to a property insurance claim.
  195         Section 5. This act shall take effect July 1, 2018.