Florida Senate - 2019 COMMITTEE AMENDMENT Bill No. CS for CS for SB 122 Ì338298[Î338298 LEGISLATIVE ACTION Senate . House . . . . . ————————————————————————————————————————————————————————————————— ————————————————————————————————————————————————————————————————— The Committee on Rules (Broxson) recommended the following: 1 Senate Amendment (with title amendment) 2 3 Delete everything after the enacting clause 4 and insert: 5 Section 1. Section 627.7152, Florida Statutes, is created 6 to read: 7 627.7152 Assignment agreements.— 8 (1) As used in this section, the term: 9 (a) “Assignee” means a person who is assigned post-loss 10 benefits through an assignment agreement. 11 (b) “Assignment agreement” means any instrument by which 12 post-loss benefits under a residential property insurance policy 13 or commercial property insurance policy, as that term is defined 14 in s. 627.0625(1), are assigned or transferred, or acquired in 15 any manner, in whole or in part, to or from a person providing 16 services to protect, repair, restore, or replace property or to 17 mitigate against further damage to the property. 18 (c) “Assignor” means a person who assigns post-loss 19 benefits under a residential property insurance policy or 20 commercial property insurance policy to another person through 21 an assignment agreement. 22 (d) “Disputed amount” means the difference between the 23 assignee’s presuit settlement demand and the insurer’s presuit 24 settlement offer. 25 (e) “Judgment obtained” means damages recovered, if any, 26 but does not include any amount awarded for attorney fees, 27 costs, or interest. 28 (f) “Presuit settlement demand” means the demand made by 29 the assignee in the written notice of intent to initiate 30 litigation as required by paragraph (9)(a). 31 (g) “Presuit settlement offer” means the offer made by the 32 insurer in its written response to the notice of intent to 33 initiate litigation as required by paragraph (9)(b). 34 (2)(a) An assignment agreement must: 35 1. Be in writing and executed by and between the assignor 36 and the assignee. 37 2. Contain a provision that allows the assignor to rescind 38 the assignment agreement without a penalty or fee by submitting 39 a written notice of rescission signed by the assignor to the 40 assignee within 14 days after the execution of the agreement, at 41 least 30 days after the date work on the property is scheduled 42 to commence if the assignee has not substantially performed, or 43 at least 30 days after the execution of the agreement if the 44 agreement does not contain a commencement date and the assignee 45 has not begun substantial work on the property. 46 3. Contain a provision requiring the assignee to provide a 47 copy of the executed assignment agreement to the insurer within 48 3 business days after the date on which the assignment agreement 49 is executed or the date on which work begins, whichever is 50 earlier. Delivery of the copy of the assignment agreement to the 51 insurer may be made: 52 a. By personal service, overnight delivery, or electronic 53 transmission, with evidence of delivery in the form of a receipt 54 or other paper or electronic acknowledgement by the insurer; or 55 b. To the location designated for receipt of such 56 agreements as specified in the policy. 57 4. Contain a written, itemized, per-unit cost estimate of 58 the services to be performed by the assignee. 59 5. Relate only to work to be performed by the assignee for 60 services to protect, repair, restore, or replace a dwelling or 61 structure or to mitigate against further damage to such 62 property. 63 6. Contain the following notice in 18-point uppercase and 64 boldfaced type: 65 66 YOU ARE AGREEING TO GIVE UP CERTAIN RIGHTS YOU HAVE UNDER YOUR 67 INSURANCE POLICY TO A THIRD PARTY, WHICH MAY RESULT IN 68 LITIGATION AGAINST YOUR INSURER. PLEASE READ AND UNDERSTAND THIS 69 DOCUMENT BEFORE SIGNING IT. YOU HAVE THE RIGHT TO CANCEL THIS 70 AGREEMENT WITHOUT PENALTY WITHIN 14 DAYS AFTER THE DATE THIS 71 AGREEMENT IS EXECUTED, AT LEAST 30 DAYS AFTER THE DATE WORK ON 72 THE PROPERTY IS SCHEDULED TO COMMENCE IF THE ASSIGNEE HAS NOT 73 SUBSTANTIALLY PERFORMED, OR AT LEAST 30 DAYS AFTER THE EXECUTION 74 OF THE AGREEMENT IF THE AGREEMENT DOES NOT CONTAIN A 75 COMMENCEMENT DATE AND THE ASSIGNEE HAS NOT BEGUN SUBSTANTIAL 76 WORK ON THE PROPERTY. HOWEVER, YOU ARE OBLIGATED FOR PAYMENT OF 77 ANY CONTRACTED WORK PERFORMED BEFORE THE AGREEMENT IS RESCINDED. 78 THIS AGREEMENT DOES NOT CHANGE YOUR OBLIGATION TO PERFORM THE 79 DUTIES REQUIRED UNDER YOUR PROPERTY INSURANCE POLICY. 80 81 7. Contain a provision requiring the assignee to indemnify 82 and hold harmless the assignor from all liabilities, damages, 83 losses, and costs, including, but not limited to, attorney fees, 84 should the policy subject to the assignment agreement prohibit, 85 in whole or in part, the assignment of benefits. 86 (b) An assignment agreement may not contain: 87 1. A penalty or fee for rescission under subparagraph 88 (a)2.; 89 2. A check or mortgage processing fee; 90 3. A penalty or fee for cancellation of the agreement; or 91 4. An administrative fee. 92 (c) If an assignor acts under an urgent or emergency 93 circumstance to protect property from damage and executes an 94 assignment agreement to protect, repair, restore, or replace 95 property or to mitigate against further damage to the property, 96 an assignee may not receive an assignment of post-loss benefits 97 under a residential property insurance policy in excess of the 98 greater of $3,000 or 1 percent of the Coverage A limit under 99 such policy. For purposes of this paragraph, the term “urgent or 100 emergency circumstance” means a situation in which a loss to 101 property, if not addressed immediately, will result in 102 additional damage until measures are completed to prevent such 103 damage. 104 (d) An assignment agreement that does not comply with this 105 subsection is invalid and unenforceable. 106 (3) In a claim arising under an assignment agreement, an 107 assignee has the burden to demonstrate that the insurer is not 108 prejudiced by the assignee’s failure to: 109 (a) Maintain records of all services provided under the 110 assignment agreement. 111 (b) Cooperate with the insurer in the claim investigation. 112 (c) Provide the insurer with requested records and 113 documents related to the services provided, and permit the 114 insurer to make copies of such records and documents. 115 (d) Deliver a copy of the executed assignment agreement to 116 the insurer within 3 business days after executing the 117 assignment agreement or work has begun, whichever is earlier. 118 (4) An assignee: 119 (a) Must provide the assignor with accurate and up-to-date 120 revised estimates of the scope of work to be performed as 121 supplemental or additional repairs are required. 122 (b) Must perform the work in accordance with accepted 123 industry standards. 124 (c) May not seek payment from the assignor exceeding the 125 applicable deductible under the policy unless the assignor has 126 chosen to have additional work performed at the assignor’s own 127 expense. 128 (d) Must, as a condition precedent to filing suit under the 129 policy, and, if required by the insurer, submit to examinations 130 under oath and recorded statements conducted by the insurer or 131 the insurer’s representative that are reasonably necessary, 132 based on the scope of the work and the complexity of the claim, 133 which examinations and recorded statements must be limited to 134 matters related to the services provided, the cost of the 135 services, and the assignment agreement. 136 (e) Must, as a condition precedent to filing suit under the 137 policy, and, if required by the insurer, participate in 138 appraisal or other alternative dispute resolution methods in 139 accordance with the terms of the policy. 140 (5) An assignment agreement and this section do not modify 141 or eliminate any term, condition, or defense relating to any 142 managed repair arrangement provided in the policy. 143 (6) An assignment agreement does not transfer or create any 144 authority to adjust, negotiate, or settle any portion of a claim 145 to a person or entity not authorized to adjust, negotiate, or 146 settle a claim on behalf of an assignor or a claimant under part 147 VI of chapter 626. 148 (7)(a) Notwithstanding any other provision of law, and 149 except as provided in paragraph (b), acceptance by an assignee 150 of an assignment agreement is a waiver by the assignee and its 151 subcontractors of claims against a named insured for payments 152 arising from the assignment agreement. The assignee and its 153 subcontractors may not collect or attempt to collect money from 154 an insured, maintain any action at law against an insured, claim 155 a lien on the real property of an insured, or report an insured 156 to a credit agency for payments arising from the assignment 157 agreement. Such waiver remains in effect after the assignment 158 agreement is rescinded by the assignor or after a determination 159 that the assignment agreement is invalid. 160 (b) A named insured is responsible for the payment of all 161 of the following: 162 1. Any deductible amount due under the policy. 163 2. Any betterment ordered and performed that is approved by 164 the named insured. 165 3. Any contracted work performed before the assignment 166 agreement is rescinded. 167 (8) The assignee shall indemnify and hold harmless the 168 assignor from all liabilities, damages, losses, and costs, 169 including, but not limited to, attorney fees, should the policy 170 subject to the assignment agreement prohibit, in whole or in 171 part, the assignment of benefits. 172 (9)(a) An assignee must provide the named insured, insurer, 173 and the assignor, if not the named insured, with a written 174 notice of intent to initiate litigation before filing suit under 175 the policy. Such notice must be served by certified mail, return 176 receipt requested, or electronic delivery at least 10 business 177 days before filing suit, but may not be served before the 178 insurer has made a determination of coverage under s. 627.70131. 179 The notice must specify the damages in dispute, the amount 180 claimed, and a presuit settlement demand. Concurrent with the 181 notice, and as a precondition to filing suit, the assignee must 182 provide the named insured, insurer, and the assignor, if not the 183 named insured, a detailed written invoice or estimate of 184 services, including itemized information on equipment, 185 materials, and supplies; the number of labor hours; and, in the 186 case of work performed, proof that the work has been performed 187 in accordance with accepted industry standards. 188 (b) An insurer must respond in writing to the notice within 189 10 business days after receiving the notice specified in 190 paragraph (a) by making a presuit settlement offer or requiring 191 the assignee to participate in appraisal or other method of 192 alternative dispute resolution under the policy. An insurer must 193 have a procedure for the prompt investigation, review, and 194 evaluation of the dispute stated in the notice and must 195 investigate each claim contained in the notice in accordance 196 with the Florida Insurance Code. 197 (10) Notwithstanding any other provision of law, in a suit 198 related to an assignment agreement for post-loss claims arising 199 under a residential or commercial property insurance policy, 200 attorney fees and costs may be recovered by an assignee only 201 under s. 57.105 and this subsection. 202 (a) If the difference between the judgment obtained by the 203 assignee and the presuit settlement offer is: 204 1. Less than 25 percent of the disputed amount, the insurer 205 is entitled to an award of reasonable attorney fees. 206 2. At least 25 percent but less than 50 percent of the 207 disputed amount, no party is entitled to an award of attorney 208 fees. 209 3. At least 50 percent of the disputed amount, the assignee 210 is entitled to an award of reasonable attorney fees. 211 (b) If the insurer fails to inspect the property or provide 212 written or oral authorization for repairs within 7 calendar days 213 after the first notice of loss, the insurer waives its right to 214 an award of attorney fees under this subsection. If the failure 215 to inspect the property or provide written or oral authorization 216 for repairs is the result of an event for which the Governor had 217 declared a state of emergency under s. 252.36, factors beyond 218 the control of the insurer which reasonably prevented an 219 inspection or written or oral authorization for repairs, or the 220 named insured’s failure or inability to allow an inspection of 221 the property after a request by the insurer, the insurer does 222 not waive its right to an award of attorney fees under this 223 subsection. 224 (c) If an assignee commences an action in any court of this 225 state based upon or including the same claim against the same 226 adverse party that such assignee has previously voluntarily 227 dismissed in a court of this state, the court may order the 228 assignee to pay the attorney fees and costs of the adverse party 229 resulting from the action previously voluntarily dismissed. The 230 court shall stay the proceedings in the subsequent action until 231 the assignee has complied with the order. 232 (11) This section does not apply to: 233 (a) An assignment, transfer, or conveyance granted to a 234 subsequent purchaser of the property with an insurable interest 235 in the property following a loss; 236 (b) A power of attorney under chapter 709 that grants to a 237 management company, family member, guardian, or similarly 238 situated person of an insured the authority to act on behalf of 239 an insured as it relates to a property insurance claim; or 240 (c) Liability coverage under a property insurance policy. 241 (12) The office shall require each insurer to report by 242 January 30, 2022, and each year thereafter data on each 243 residential and commercial property insurance claim paid in the 244 prior calendar year under an assignment agreement. The Financial 245 Services Commission shall adopt by rule a list of the data 246 required, which must include specific data about claims 247 adjustment and settlement timeframes and trends, grouped by 248 whether litigated or not litigated and by loss adjustment 249 expenses. 250 (13) This section applies to an assignment agreement 251 executed on or after July 1, 2019. 252 Section 2. Section 627.7153, Florida Statutes, is created 253 to read: 254 627.7153 Policies restricting assignment of post-loss 255 benefits under a property insurance policy.— 256 (1) As used in this section, the term “assignment 257 agreement” has the same meaning as provided in s. 627.7152. 258 (2) An insurer may make available a policy that restricts 259 in whole or in part an insured’s right to execute an assignment 260 agreement only if all of the following conditions are met: 261 (a) The insurer makes available to the insured or potential 262 insured at the same time the same coverage under a policy that 263 does not restrict the right to execute an assignment agreement. 264 (b) Each restricted policy is available at a lower cost 265 than the unrestricted policy. 266 (c) The policy prohibiting assignment in whole is available 267 at a lower cost than any policy prohibiting assignment in part. 268 (d) Each restricted policy include on its face the 269 following notice in 18-point uppercase and boldfaced type: 270 271 THIS POLICY DOES NOT ALLOW THE UNRESTRICTED ASSIGNMENT OF POST 272 LOSS INSURANCE BENEFITS. BY SELECTING THIS POLICY, YOU WAIVE 273 YOUR RIGHT TO FREELY ASSIGN OR TRANSFER THE POST-LOSS PROPERTY 274 INSURANCE BENEFITS AVAILABLE UNDER THIS POLICY TO A THIRD PARTY 275 OR TO OTHERWISE FREELY ENTER INTO AN ASSIGNMENT AGREEMENT AS THE 276 TERM IS DEFINED IN SECTION 627.7152 OF THE FLORIDA STATUTES. 277 278 (3) The insurer shall notify the insured at least annually 279 of the coverage options the insurer makes available under this 280 section. Such notice must be part of and attached to the notice 281 of premium. 282 (4) A named insured must reject a fully assignable policy 283 in writing or electronically. The rejection of a fully 284 assignable policy shall be made on a form approved by the 285 office. The form must state that the policy restricts the 286 assignment of benefits. The heading of the form shall be in 18 287 point uppercase and boldfaced type and state: 288 289 YOU ARE ELECTING TO PURCHASE AN INSURANCE POLICY THAT RESTRICTS 290 THE ASSIGNMENT OF BENEFITS UNDER THE POLICY IN WHOLE OR IN PART. 291 PLEASE READ CAREFULLY. 292 293 (5) This section applies to a policy issued or renewed on 294 or after July 1, 2019. 295 Section 3. Section 627.422, Florida Statutes, is amended to 296 read: 297 627.422 Assignment of policies or post-loss benefits.—A 298 policy may be assignable, or not assignable, as provided by its 299 terms. Any such assignment shall entitle the insurer to deal 300 with the assignee as the owner or pledgee of the policy in 301 accordance with the terms of the assignment, until the insurer 302 has received at its home office written notice of termination of 303 the assignment or pledge or written notice by or on behalf of 304 some other person claiming some interest in the policy in 305 conflict with the assignment. 306 (1) LIFE OR HEALTH INSURANCE POLICIES.—Subject to its terms 307 relating to assignability, any life or health insurance policy 308 under the terms of which the beneficiary may be changed upon the 309 sole request of the policyowner may be assigned either by pledge 310 or transfer of title, by an assignment executed by the 311 policyowner alone and delivered to the insurer, whether or not 312 the pledgee or assignee is the insurer.
Any such assignment313 shall entitle the insurer to deal with the assignee as the owner314 or pledgee of the policy in accordance with the terms of the315 assignment, until the insurer has received at its home office316 written notice of termination of the assignment or pledge or317 written notice by or on behalf of some other person claiming318 some interest in the policy in conflict with the assignment.319 (2) POST-LOSS BENEFITS UNDER CERTAIN PROPERTY INSURANCE 320 POLICIES.—A residential or commercial property insurance policy 321 may not prohibit the assignment of post-loss benefits unless it 322 complies with s. 627.7153. 323 Section 4. Citizens Property Insurance Corporation may not 324 implement rate changes in 2019 for DP-3 and HO-3 policies unless 325 the rate filing reflects projected rate savings from this act. 326 Such rate filing must include an exhibit demonstrating the 327 impact of this act on indicated rates for DP-3 and HO-3 328 policies. Citizens Property Insurance Corporation shall provide 329 policyholders with details on the projected rate savings from 330 this act. 331 Section 5. If any provision of this act or its application 332 to any person or circumstance is held invalid, the invalidity 333 does not affect the remaining provisions or applications of the 334 act which can be given effect without the invalid provision or 335 application, and to this end the provisions of this act are 336 severable. 337 Section 6. This act shall take effect July 1, 2019. 338 339 ================= T I T L E A M E N D M E N T ================ 340 And the title is amended as follows: 341 Delete everything before the enacting clause 342 and insert: 343 A bill to be entitled 344 An act relating to insurance assignment agreements; 345 creating s. 627.7152, F.S.; providing definitions; 346 providing requirements and limitations for property 347 insurance assignment agreements; providing a burden of 348 proof; providing that an assignment agreement does not 349 affect managed repair arrangements under a property 350 insurance policy; providing that an assignment 351 agreement does not confer or create authority to 352 adjust, negotiate, or settle a claim without 353 authorization under part VI of chapter 626; providing 354 that an acceptance by an assignee of an assignment 355 agreement is a waiver by the assignee and its 356 subcontractors of certain claims against an insured; 357 specifying an insured’s payment obligations under an 358 assignment agreement; requiring notice of intent to 359 initiate litigation; specifying requirements for such 360 notice; requiring a written response to the notice of 361 intent to initiate litigation; specifying requirements 362 for such response; providing for an award of 363 reasonable attorney fees for certain claims arising 364 under an assignment agreement; providing for an award 365 of reasonable attorney fees following a voluntary 366 dismissal under certain circumstances; requiring the 367 court to stay proceedings under certain circumstances; 368 directing the Office of Insurance Regulation to 369 require insurers to report specified data; requiring 370 the Financial Services Commission to adopt rules; 371 providing applicability; creating s. 627.7153, F.S.; 372 defining the term “assignment agreement”; authorizing 373 insurers to make available property insurance policies 374 restricting the assignment of post-loss benefits under 375 certain conditions; requiring annual notice of 376 coverage options; requiring a written or electronic 377 waiver under certain circumstances; requiring the 378 office to approve a waiver form; providing 379 applicability; amending s. 627.422, F.S.; providing 380 that residential or commercial property insurance 381 policies may not prohibit the assignment of post-lost 382 benefits; providing an exception; prohibiting Citizens 383 Property Insurance Corporation from implementing rate 384 changes for certain policies; providing an exception; 385 requiring certain rate filings to include specified 386 information; requiring the corporation to inform 387 policyholders of certain information; providing 388 severability; providing an effective date.