Florida Senate - 2019                        COMMITTEE AMENDMENT
       Bill No. SB 122
                              LEGISLATIVE ACTION                        
                    Senate             .             House              
                   Comm: WD            .                                
                  03/04/2019           .                                

       The Committee on Banking and Insurance (Thurston) recommended
       the following:
    1         Senate Amendment (with title amendment)
    3         Delete everything after the enacting clause
    4  and insert:
    5         Section 1. Subsection (11) is added to section 627.062,
    6  Florida Statutes, to read:
    7         627.062 Rate standards.—
    8         (11) Attorney fees and costs paid by a property insurer
    9  pursuant to s. 627.428 may not be included in the property
   10  insurer’s rate base and may not be used to justify a rate
   11  increase or rate change.
   12         Section 2. Subsection (1) of section 627.409, Florida
   13  Statutes, is amended to read:
   14         627.409 Representations in applications; warranties.—
   15         (1) Any statement or description made by or on behalf of an
   16  insured or annuitant in an application for an insurance policy
   17  or annuity contract, or in negotiations for a policy or
   18  contract, is a representation and not a warranty. Except as
   19  provided in subsection (3), a misrepresentation, omission,
   20  concealment of fact, or incorrect statement may prevent recovery
   21  under the contract or policy only if the misrepresentation,
   22  omission, concealment of fact, or incorrect statement directly
   23  relates to the cause of the claim being made and any of the
   24  following apply:
   25         (a) The misrepresentation, omission, concealment, or
   26  statement is fraudulent or is material to the acceptance of the
   27  risk or to the hazard assumed by the insurer.
   28         (b) If the true facts relative to the loss claimed had been
   29  known to the insurer pursuant to a policy requirement or other
   30  requirement, the insurer in good faith would not have:
   31         1. Issued the policy or contract;, would not have
   32         2. Issued the policy or contract it at a the same premium
   33  rate at least 20 percent higher than the rate actually charged;,
   34  would not have
   35         3. Issued a policy or contract in as large an amount;, or
   36         4.would not have Provided coverage with respect to the
   37  hazard resulting in the loss.
   38         Section 3. Section 627.422, Florida Statutes, is amended to
   39  read:
   40         627.422 Assignment of policies or post-loss benefits.—A
   41  policy may be assignable, or not assignable, as provided by its
   42  terms.
   43         (1) LIFE OR HEALTH INSURANCE POLICIES.—Subject to its terms
   44  relating to assignability, any life or health insurance policy
   45  under the terms of which the beneficiary may be changed upon the
   46  sole request of the policyowner may be assigned either by pledge
   47  or transfer of title, by an assignment executed by the
   48  policyowner alone and delivered to the insurer, whether or not
   49  the pledgee or assignee is the insurer. Any such assignment
   50  shall entitle the insurer to deal with the assignee as the owner
   51  or pledgee of the policy in accordance with the terms of the
   52  assignment, until the insurer has received at its home office
   53  written notice of termination of the assignment or pledge or
   54  written notice by or on behalf of some other person claiming
   55  some interest in the policy in conflict with the assignment.
   57  POLICIES.-A personal lines residential property insurance policy
   58  or a commercial residential property insurance policy may not
   59  restrict the assignment of post-loss benefits.
   60         Section 4. Section 627.7152, Florida Statutes, is created
   61  to read:
   62         627.7152 Assignment of residential homeowner’s property
   63  insurance post-loss benefits; prelitigation invoice; offer of
   64  settlement; annual reporting.—
   65         (1)An agreement to assign post-loss benefits of a
   66  residential homeowner’s property insurance policy is not valid
   67  unless the agreement:
   68         (a)Is in writing;
   69         (b)Is limited to claims for work performed or work to be
   70  performed by the assignee;
   71         (c)Contains an accurate and up-to-date statement of the
   72  scope of work to be performed;
   73         (d)Allows the insured to rescind the assignment within 7
   74  days after the execution of the assignment;
   75         (e)Provides that the insured may be responsible for
   76  payment for any work performed before the rescission of the
   77  assignment; and
   78         (f)Contains a provision, in 14-point boldfaced type, which
   79  allows the insured to rescind the agreement within 7 days after
   80  execution of the assignment, and with a notice that if the
   81  assignment is rescinded, the homeowner is responsible to pay for
   82  the work done up to the date of the rescission and that the
   83  homeowner is not otherwise responsible to pay for the work
   84  covered by the assignment.
   85         (2)(a) The assignee shall provide a copy of the assignment
   86  agreement to the insurer within 7 days after execution of the
   87  agreement, or within 48 hours after beginning nonemergency work,
   88  whichever is earlier, if the insurer has a facsimile number and
   89  e-mail address on its website designated for the delivery of
   90  such documents. This notice must be accompanied by a written
   91  estimate of the work to be done, with unit prices indicated
   92  where appropriate, and the basis for calculating lump sum fees
   93  if unit prices are inappropriate. The estimate must be timely
   94  updated if conditions require a change in scope. The failure to
   95  comply with this requirement constitutes a defense to any
   96  payment obligation under the policy or the assignment, if the
   97  insurer can establish prejudice resulting from the failure.
   98         (b) The insurer may inspect the property at any time. If
   99  the insurer fails to attempt in good faith to do so within 7
  100  days after learning of the loss and promptly deliver to the
  101  assignee written notice of any perceived deficiency in the
  102  assignee’s notice or the work being performed, the failure may
  103  be raised to estop the insurer from asserting that work done was
  104  not reasonably necessary or that the notice was insufficient to
  105  comply with this section.
  106         (3)Notwithstanding any other law, the acceptance by an
  107  assignee of a valid assignment agreement constitutes a waiver by
  108  the assignee or transferee, and any subcontractor of the
  109  assignee or transferee, of any and all claims against named
  110  insureds for payment arising from the specified loss, except
  111  that all named insureds remain responsible for:
  112         (a) The payment of any deductible amount provided for by
  113  the terms of the insurance policy;
  114         (b) The payment for work performed before the rescission of
  115  the assignment agreement, if there is a rescission;
  116         (c) The cost of any betterment specifically authorized by
  117  the insured in a writing that identifies the work as betterment
  118  for which the insured will be liable; and
  119         (d)A misrepresentation of the existence of homeowner’s
  120  coverage by the homeowner.
  122  The waiver in this subsection is valid even if the assignment
  123  agreement is determined to be invalid.
  124         (4)No later than 30 days before an assignee initiates
  125  litigation against an insurer relating to a residential
  126  homeowner’s property insurance claim, the assignee must provide
  127  the insurer an invoice for all work that has been performed and
  128  a current estimate of work remaining to be performed.
  129         (5) In a civil action relating to a residential homeowner’s
  130  property insurance claim under a policy in which an assignment
  131  agreement under this section was executed, an offer of
  132  settlement under s. 768.79 by any party may be made no earlier
  133  than 30 days after the civil action has commenced.
  134         (6) The office shall require each insurer to report by
  135  January 30, 2022, and each year thereafter, data on each
  136  residential property insurance claim paid in the prior calendar
  137  year pursuant to an assignment agreement. Such data must
  138  include, but are not limited to, specific data about claims
  139  adjustment and settlement timeframes and trends grouped by
  140  whether litigated or not litigated, by loss adjustment expenses,
  141  and by the amount and type of attorney fees incurred or paid.
  142  The office may adopt rules to administer this subsection.
  143         (7)This section does not apply to:
  144         (a)An assignment, transfer, or conveyance granted to a
  145  subsequent purchaser of the property with an insurable interest
  146  in the property following a loss; or
  147         (b)A power of attorney under chapter 709 which grants to a
  148  management company, family member, guardian, or similarly
  149  situated person of an insured the authority to act on behalf of
  150  an insured as it relates to a property insurance claim.
  151         Section 5. This act shall take effect July 1, 2019.
  153  ================= T I T L E  A M E N D M E N T ================
  154  And the title is amended as follows:
  155         Delete everything before the enacting clause
  156  and insert:
  157                        A bill to be entitled                      
  158         An act relating to insurance; amending s. 627.062,
  159         F.S.; providing that certain attorney fees and costs;
  160         providing an effective paid by property insurers may
  161         not be included in the property insurer’s rate base
  162         and may not be used to justify a rate increase or rate
  163         change; amending s. 627.409, F.S.; adding and revising
  164         conditions under which certain misrepresentations,
  165         omissions, concealments of fact, or incorrect
  166         statements may prevent recovery under an insurance
  167         policy or annuity contract; amending s. 627.422, F.S.;
  168         providing that personal lines residential and
  169         commercial residential property insurance policies may
  170         not restrict the assignment of post-loss benefits;
  171         creating s. 627.7152, F.S.; providing that an
  172         agreement to assign post-loss benefits of a
  173         residential homeowner’s property insurance is not
  174         valid unless specified conditions are met; requiring
  175         the assignee, under certain circumstances, to provide
  176         a copy of the assignment agreement and a specified
  177         written estimate to the insurer within a specified
  178         timeframe; requiring the estimate to be timely updated
  179         if conditions require a change in scope; providing
  180         construction relating to failure to comply with such
  181         requirement; authorizing an insurer to inspect the
  182         property at any time; providing that an insurer’s
  183         failure to make a certain attempt to inspect the
  184         property and deliver a certain notice, under certain
  185         circumstances, may estop certain assertions by the
  186         insurer; providing that an assignee’s acceptance of a
  187         valid assignment agreement constitutes a waiver by the
  188         assignee or transferee, or any subcontractor of the
  189         assignee or transferee, of certain claims against
  190         named insureds, except under specified circumstances;
  191         providing construction relating to the validity of
  192         such waiver; requiring an assignee, before initiating
  193         certain litigation against an insurer, to provide a
  194         certain invoice and estimate to the insurer within a
  195         specified timeframe; providing that certain offers of
  196         settlement in certain civil actions may not be made
  197         until after a specified timeframe; requiring the
  198         office to require each insurer to annually report
  199         specified data relating to certain claims paid
  200         pursuant to assignment agreements; authorizing the
  201         office to adopt rules; providing applicability;
  202         providing an effective date.