Florida Senate - 2018                      CS for CS for SB 1168
       By the Committees on Judiciary; and Banking and Insurance; and
       Senator Steube
       590-02950-18                                          20181168c2
    1                        A bill to be entitled                      
    2         An act relating to insurance; amending s. 627.409,
    3         F.S.; adding and revising conditions under which
    4         certain misrepresentations, omissions, concealments of
    5         fact, or incorrect statements may prevent recovery
    6         under an insurance policy or annuity contract;
    7         providing construction; amending s. 627.422, F.S.;
    8         providing that personal lines residential and
    9         commercial residential property insurance policies may
   10         not restrict the assignment of post-loss benefits;
   11         amending s. 627.7011, F.S.; prohibiting specified acts
   12         by insurers relating to certain losses under
   13         homeowners’ insurance policies; creating s. 627.7152,
   14         F.S.; providing that an agreement to assign post-loss
   15         benefits of a residential homeowner’s property
   16         insurance is not valid unless specified conditions are
   17         met; requiring the assignee, under certain
   18         circumstances, to provide a copy of the assignment
   19         agreement and a specified written estimate to the
   20         insurer within a specified timeframe; requiring the
   21         estimate to be timely updated if conditions require a
   22         change in scope; providing construction relating to
   23         failure to comply with such requirement; authorizing
   24         an insurer to inspect the property at any time;
   25         providing that an insurer’s failure to make a certain
   26         attempt to inspect the property and deliver a certain
   27         notice, under certain circumstances, may estop certain
   28         assertions by the insurer; providing that a person’s
   29         acceptance of an assignment agreement constitutes a
   30         waiver by the assignee or transferee, or any
   31         subcontractor of the assignee or transferee, of
   32         certain claims against named insureds, except under
   33         specified circumstances; providing construction
   34         relating to such waiver; requiring an assignee, before
   35         initiating certain litigation against an insurer, to
   36         provide a certain invoice and estimate to the insurer
   37         within a specified timeframe; providing that certain
   38         offers of settlement in certain civil actions may not
   39         be made until after a specified timeframe; requiring
   40         the Office of Insurance Regulation to require each
   41         insurer to annually report specified data relating to
   42         certain claims paid pursuant to assignment agreements;
   43         authorizing the Financial Services Commission to adopt
   44         rules; providing applicability; providing an effective
   45         date.
   47  Be It Enacted by the Legislature of the State of Florida:
   49         Section 1. Section 627.409, Florida Statutes, is amended to
   50  read:
   51         627.409 Representations in applications; warranties.—
   52         (1) Any statement or description made by or on behalf of an
   53  insured or annuitant in an application for an insurance policy
   54  or annuity contract, or in negotiations for a policy or
   55  contract, is a representation and not a warranty. Except as
   56  provided in subsection (3), a misrepresentation, omission,
   57  concealment of fact, or incorrect statement may prevent recovery
   58  under the contract or policy only if the misrepresentation,
   59  omission, concealment of fact, or incorrect statement directly
   60  relates to the cause of the claim being made and any of the
   61  following apply:
   62         (a) The misrepresentation, omission, concealment, or
   63  statement is fraudulent or is material to the acceptance of the
   64  risk or to the hazard assumed by the insurer.
   65         (b) If the true facts relative to the loss claimed had been
   66  known to the insurer pursuant to a policy requirement or other
   67  requirement, the insurer in good faith would not have:
   68         1. Issued the policy or contract;, would not have
   69         2. Issued the policy or contract it at a the same premium
   70  rate at least 20 percent higher than the rate actually charged;,
   71  would not have
   72         3. Issued a policy or contract in as large an amount;, or
   73         4.would not have Provided coverage with respect to the
   74  hazard resulting in the loss.
   75         (2) A breach or violation by the insured of a warranty,
   76  condition, or provision of a wet marine or transportation
   77  insurance policy, contract of insurance, endorsement, or
   78  application does not void the policy or contract, or constitute
   79  a defense to a loss thereon, unless such breach or violation
   80  increased the hazard by any means within the control of the
   81  insured.
   82         (3) For residential property insurance, if a policy or
   83  contract has been in effect for more than 90 days, a claim filed
   84  by the insured cannot be denied based on credit information
   85  available in public records.
   86         (4) This section may not be construed to allow fraudulent
   87  insurance claims as described in s. 817.234.
   88         Section 2. Section 627.422, Florida Statutes, is amended to
   89  read:
   90         627.422 Assignment of policies or post-loss benefits.—A
   91  policy may be assignable, or not assignable, as provided by its
   92  terms.
   93         (1) LIFE OR HEALTH INSURANCE POLICIES.—Subject to its terms
   94  relating to assignability, any life or health insurance policy
   95  under the terms of which the beneficiary may be changed upon the
   96  sole request of the policyowner may be assigned either by pledge
   97  or transfer of title, by an assignment executed by the
   98  policyowner alone and delivered to the insurer, whether or not
   99  the pledgee or assignee is the insurer. Any such assignment
  100  shall entitle the insurer to deal with the assignee as the owner
  101  or pledgee of the policy in accordance with the terms of the
  102  assignment, until the insurer has received at its home office
  103  written notice of termination of the assignment or pledge or
  104  written notice by or on behalf of some other person claiming
  105  some interest in the policy in conflict with the assignment.
  107  POLICIES.-A personal lines residential property insurance policy
  108  or a commercial residential property insurance policy may not
  109  restrict the assignment of post-loss benefits.
  110         Section 3. Paragraph (a) of subsection (3) of section
  111  627.7011, Florida Statutes, is amended to read:
  112         627.7011 Homeowners’ policies; offer of replacement cost
  113  coverage and law and ordinance coverage.—
  114         (3) In the event of a loss for which a dwelling or personal
  115  property is insured on the basis of replacement costs:
  116         (a) For a dwelling:,
  117         1. The insurer must initially pay at least the actual cash
  118  value of the insured loss, less any applicable deductible. The
  119  insurer shall pay any remaining amounts necessary to perform
  120  such repairs as work is performed and expenses are incurred. If
  121  a total loss of a dwelling occurs, the insurer shall pay the
  122  replacement cost coverage without reservation or holdback of any
  123  depreciation in value, pursuant to s. 627.702.
  124         2. The insurer may not require that a particular vendor
  125  make repairs to such dwelling.
  126         3. The insurer may not, unless expressly requested by the
  127  insured, recommend or suggest a particular vendor for repairs to
  128  be made to such dwelling.
  129         Section 4. Section 627.7152, Florida Statutes, is created
  130  to read:
  131         627.7152 Assignment of residential homeowner’s property
  132  insurance post-loss benefits; prelitigation invoice; offer of
  133  settlement; annual reporting.—
  134         (1)An agreement to assign post-loss benefits of a
  135  residential homeowner’s property insurance policy is not valid
  136  unless the agreement:
  137         (a)Is in writing;
  138         (b)Is limited to claims for work performed or work to be
  139  performed by the assignee;
  140         (c)Contains an accurate and up-to-date statement of the
  141  scope of work to be performed;
  142         (d)Allows the insured to rescind the assignment within 7
  143  days after the execution of the assignment without a penalty or
  144  fee;
  145         (e) Prohibits any check or mortgage processing fee or
  146  administrative fee;
  147         (f)Provides that the insured or the insurer may be
  148  responsible for payment for any work performed before the
  149  rescission of the assignment; and
  150         (g)Contains a provision, in 14-point boldfaced type, which
  151  allows the insured to rescind the agreement within 7 days after
  152  execution of the assignment, and with a notice that if the
  153  assignment is rescinded, the homeowner is responsible to pay for
  154  the work done up to the date of the rescission and that the
  155  homeowner is not otherwise responsible to pay for the work
  156  covered by the assignment.
  157         (2)(a) The assignee shall provide a copy of the assignment
  158  agreement to the insurer within 5 days after execution of the
  159  agreement if the insurer has a facsimile number and e-mail
  160  address on its website designated for the delivery of such
  161  documents. This assignment agreement must be accompanied by a
  162  written estimate of the work to be done, with unit prices
  163  indicated where appropriate, and the basis for calculating lump
  164  sum fees if unit prices are inappropriate. The estimate must be
  165  timely updated if conditions require a change in scope. The
  166  failure to comply with this requirement constitutes a defense to
  167  any payment obligation under the policy or the assignment, if
  168  the insurer can establish prejudice resulting from the failure.
  169         (b) The insurer may inspect the property at any time. If
  170  the insurer fails to attempt in good faith to do so within 7
  171  days after learning of the loss and promptly deliver to the
  172  assignee written notice of any perceived deficiency in the
  173  assignee’s notice or the work being performed, the failure may
  174  be raised to estop the insurer from asserting that work done was
  175  not reasonably necessary or that the notice was insufficient to
  176  comply with this section.
  177         (3)Notwithstanding any other law, the acceptance by a
  178  person of any assignment agreement constitutes a waiver by the
  179  assignee or transferee, and any subcontractor of the assignee or
  180  transferee, of any and all claims against all named insureds for
  181  payment arising from the specified loss, except that all named
  182  insureds remain responsible for the payment of any deductible
  183  amount provided for by the terms of the insurance policy and for
  184  the cost of any betterment ordered by all named insureds. This
  185  waiver remains in effect notwithstanding any subsequent
  186  determination that the assignment agreement is invalid or
  187  notwithstanding the rescission of the assignment agreement by
  188  all named insureds, except that the assignee is entitled to
  189  payment for the reasonable cost of any contracted work performed
  190  before the assignor rescinded the assignment agreement.
  191         (4)No later than 30 days before an assignee initiates
  192  litigation against an insurer relating to a residential
  193  homeowner’s property insurance claim, the assignee must provide
  194  the insurer an invoice for all work that has been performed and
  195  a current estimate of work remaining to be performed.
  196         (5) In a civil action relating to a residential homeowner’s
  197  property insurance claim under a policy in which an assignment
  198  agreement under this section was executed, an offer of
  199  settlement under s. 768.79 by any party may be made no earlier
  200  than 30 days after the civil action has commenced.
  201         (6) The office shall require each insurer to report by
  202  January 30, 2021, and each year thereafter, data on each
  203  residential property insurance claim paid in the prior calendar
  204  year pursuant to an assignment agreement. Such data must
  205  include, but are not limited to, specific data about claims
  206  adjustment and settlement timeframes and trends grouped by
  207  whether litigated or not litigated, by loss adjustment expenses,
  208  and by the amount and type of attorney fees incurred or paid.
  209  The commission may adopt rules to administer this subsection.
  210         (7)This section does not apply to:
  211         (a)An assignment, transfer, or conveyance granted to a
  212  subsequent purchaser of the property with an insurable interest
  213  in the property following a loss; or
  214         (b)A power of attorney under chapter 709 which grants to a
  215  management company, family member, guardian, or similarly
  216  situated person of an insured the authority to act on behalf of
  217  an insured as it relates to a property insurance claim.
  218         Section 5. The amendment made by this act to s. 627.422,
  219  Florida Statutes, and the creation by this act of s. 627.7152,
  220  Florida Statutes, apply to assignment agreements executed on or
  221  after July 1, 2018.
  222         Section 6. This act shall take effect July 1, 2018.