Florida Senate - 2021                          SENATOR AMENDMENT
       Bill No. CS for CS for SB 54
       
       
       
       
       
       
                                Ì130054tÎ130054                         
       
                              LEGISLATIVE ACTION                        
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       Senator Burgess moved the following:
       
    1         Senate Amendment (with title amendment)
    2  
    3         Delete lines 1832 - 2094
    4  and insert:
    5         1. Except for a civil action for bad faith failure to
    6  settle a third-party claim subject to s. 624.156, not attempting
    7  in good faith to settle claims when, under all the
    8  circumstances, it could and should have done so, had it acted
    9  fairly and honestly toward its insured and with due regard for
   10  her or his interests;
   11         2. Making claims payments to insureds or beneficiaries not
   12  accompanied by a statement setting forth the coverage under
   13  which payments are being made; or
   14         3. Except as to liability coverages, failing to promptly
   15  settle claims, when the obligation to settle a claim has become
   16  reasonably clear, under one portion of the insurance policy
   17  coverage in order to influence settlements under other portions
   18  of the insurance policy coverage; or
   19         4. When handling a first-party claim under a motor vehicle
   20  insurance policy, not attempting in good faith to settle such
   21  claim pursuant to subparagraph 1. when such failure is caused by
   22  a failure to communicate to an insured:
   23         a. The name, telephone number, e-mail address, and mailing
   24  address of the person who is adjusting the claim;
   25         b. Any issues that may impair the insured’s coverage;
   26         c. Information that might resolve the issue in a prompt
   27  manner;
   28         d. Any basis for the insurer’s rejection or nonacceptance
   29  of any settlement demand or offer; or
   30         e. Any needed extensions to respond to a time-limited
   31  settlement offer.
   32  
   33  Notwithstanding the provisions of the above to the contrary, a
   34  person pursuing a remedy under this section need not prove that
   35  such act was committed or performed with such frequency as to
   36  indicate a general business practice.
   37         (8) The civil remedy specified in this section does not
   38  preempt any other remedy or cause of action provided for
   39  pursuant to any other statute or pursuant to the common law of
   40  this state. A Any person is may obtain a judgment under either
   41  the common-law remedy of bad faith or this statutory remedy, but
   42  shall not be entitled to a judgment under multiple bad faith
   43  both remedies, whether under statute or common law. This section
   44  shall not be construed to create a common-law cause of action.
   45  The damages recoverable pursuant to this section shall include
   46  those damages which are a reasonably foreseeable result of a
   47  specified violation of this section by the authorized insurer
   48  and may include an award or judgment in an amount that exceeds
   49  the policy limits.
   50         Section 35. Section 624.156, Florida Statutes, is created
   51  to read:
   52         624.156 Bad faith failure to settle actions against motor
   53  vehicle insurers by third-party claimants.—
   54         (1) SCOPE.—This section applies in all actions against any
   55  insurer for bad faith failure to settle a third-party claim,
   56  whether under statute or common law, for a loss arising out of
   57  the ownership, maintenance, or use of a motor vehicle operated
   58  or principally garaged in this state at the time of an accident,
   59  regardless of whether the insurer is authorized to do business
   60  in this state or issued a policy in this state.
   61         (2) DUTY OF GOOD FAITH.—In handling claims, an insurer has
   62  a duty to its insured to handle claims in good faith by
   63  complying with the best practice standards of subsection (4).
   64         (3) BAD FAITH FAILURE TO SETTLE.—“Bad faith failure to
   65  settle” means an insurer’s failure to meet its duty of good
   66  faith, which is the proximate cause of the insurer not settling
   67  a third-party claim when, under all the circumstances, the
   68  insurer could and should have done so, had it acted fairly and
   69  honestly toward its insured and with due regard for the
   70  insured’s interests.
   71         (4) BEST PRACTICE STANDARDS.—Upon the earlier of receiving
   72  notice of a claim or, under subsection (6), a demand for
   73  settlement, an insurer must do all of the following:
   74         (a) Assign a duly licensed and appointed insurance adjuster
   75  to investigate the claim and resolve any questions concerning
   76  the existence or extent of the insured’s coverage.
   77         (b) Evaluate every claim fairly, honestly, and with due
   78  regard for the interests of the insured, consider the extent of
   79  the claimant’s recoverable damages, and consider the information
   80  in a reasonable and prudent manner.
   81         (c) Request from the insured or claimant additional
   82  relevant information the insurer reasonably deems necessary.
   83         (d) Conduct all verbal and written communications with the
   84  utmost honesty and complete candor.
   85         (e) Make reasonable efforts to explain to persons not
   86  represented by counsel matters requiring expertise beyond the
   87  level normally expected of a layperson with no training in
   88  insurance or claims-handling issues.
   89         (f)Retain all written communications and note and retain
   90  all verbal communications in a reasonable manner for a period of
   91  not less than 5 years after completion of the claim adjustment.
   92         (g) Provide the insured, upon request, with all
   93  nonprivileged communications related to the insurer’s handling
   94  of the claim.
   95         (h) Provide, at the insurer’s expense, reasonable
   96  accommodations necessary to communicate effectively with an
   97  insured covered under the Americans with Disabilities Act.
   98         (i) In handling third-party claims, communicate to an
   99  insured:
  100         1. The identity of any other person or entity the insurer
  101  has reason to believe may be liable;
  102         2. The insurer’s evaluation of the claim;
  103         3. The likelihood and possible extent of an excess
  104  judgment;
  105         4. Steps the insured can take to avoid exposure to an
  106  excess judgment;
  107         5. Requests for financial affidavits and an explanation of
  108  the consequences of an insured’s failure to submit a financial
  109  affidavit; and
  110         6. Any demands for settlement under subsection (6) or
  111  settlement offers.
  112         (j)1. When a single claim arises out of a single
  113  occurrence, the insurer must give fair consideration to a
  114  settlement offer that is not unreasonable under the facts and
  115  settle, if possible, when a reasonably prudent person, faced
  116  with the prospect of paying the total recovery, would do so.
  117  When liability is clear, and the claimant’s injuries are so
  118  serious that a judgment in excess of the policy limits is
  119  likely, the insurer must continue settlement negotiations after
  120  a claimant withdraws a settlement demand under subparagraph
  121  (6)(c)1.
  122         2.When multiple claims arise out of a single occurrence,
  123  the combined value of all claims exceeds the total of all
  124  applicable policy limits, and the claimants are all unwilling to
  125  settle cumulatively within the policy limits, the insurer must
  126  attempt to minimize the magnitude of possible excess judgments
  127  against the insured. In such circumstances, the insurer is
  128  entitled to great discretion to decide how much to offer each
  129  respective claimant in its attempt to protect the insured. The
  130  insurer may, in its effort to minimize the excess liability of
  131  the insured, use its discretion to offer the full available
  132  policy limits to one or more claimants to the exclusion of
  133  others and may leave the insured exposed to some liability after
  134  all the policy limits are paid.
  135         (5) CONDITIONS PRECEDENT.—It is a condition precedent to
  136  filing an action against an insurer for bad faith failure to
  137  settle a third-party claim that the claimant must:
  138         (a) Serve a written demand for settlement, as provided in
  139  subsection (6), within the full available policy limits of
  140  liability in exchange for a release of further liability against
  141  the insured; and
  142         (b)Unless expressly waived by the insurer, obtain a final
  143  judgment in excess of the policy limits against the insured or
  144  the insured’s estate, bankruptcy trustee, or successor in
  145  interest.
  146         (6) DEMAND FOR SETTLEMENT.—
  147         (a)A claimant may not place any conditions on acceptance
  148  of a demand for settlement other than electing the right to
  149  receive a financial affidavit that complies with the
  150  requirements of subsection (7). If the claimant exercises such
  151  right, the claimant may withdraw the demand for settlement
  152  pursuant to paragraph (c). A demand for settlement must be
  153  served upon the insurer by certified mail at the address
  154  designated by the insurer with the Department of Financial
  155  Services under s. 624.422(2).
  156         (b)A demand for settlement must do all of the following:
  157         1. Identify the:
  158         a. Date and location of loss;
  159         b. Name, address, and date of birth of the claimant;
  160         c. Name of each insured to whom the demand for settlement
  161  is directed; and
  162         d. Legal and factual basis of the claim.
  163         2. Provide a reasonably detailed description of the
  164  claimant’s:
  165         a. Known injuries caused or aggravated by the incident on
  166  which the claim is based;
  167         b. Medical treatment causally related to the incident on
  168  which the claim is based; and
  169         c. Type and amount of known damages incurred and, if any,
  170  the damages the claimant reasonably anticipates incurring in the
  171  future.
  172         3. State the amount of the demand for settlement.
  173         4. Place no conditions on acceptance of the demand for
  174  settlement other than electing the right to receive a financial
  175  affidavit that complies with the requirements of subsection (7).
  176         5.State whether the demand for settlement is conditioned
  177  on the receipt of a financial affidavit meeting the requirements
  178  of subsection (7), and if so, must include a request for such
  179  financial affidavit.
  180         6.Provide that the claimant and the claimant’s attorney
  181  will use the financial affidavit only for the purpose of
  182  determining the insured’s assets and liabilities and will not
  183  publicly disseminate any information in the financial affidavit.
  184         7.Provide a physical address, an e-mail address, and a
  185  facsimile number for further communications, including, but not
  186  limited to, responses to the demand for settlement.
  187         8. Release the insured from any further liability upon the
  188  insurer’s acceptance of a demand for settlement which is not
  189  withdrawn pursuant to paragraph (c) or accepted pursuant to
  190  paragraph (d).
  191         (c)A claimant may withdraw a demand for settlement made
  192  pursuant to this subsection within 7 days after receiving from
  193  the insurer:
  194         1.The insured’s financial affidavit; or
  195         2.Notice pursuant to subparagraph (7)(b)2. of the
  196  insured’s failure to complete the financial affidavit.
  197         (d)If an insured refuses to provide to the insurer a
  198  financial affidavit that complies with subsection (7), the
  199  insurer may accept the demand for settlement without requiring a
  200  release of the insured. An insurer that accepts the demand for
  201  settlement pursuant to this paragraph does not have any further
  202  duty to defend the insured and may not be held liable for
  203  damages to the insured if the claimant thereafter obtains an
  204  excess judgment against the insured.
  205         (7) FINANCIAL AFFIDAVIT.
  206         (a)If a financial affidavit is requested pursuant to
  207  subsection (6), the insured has 30 days after the insurer’s
  208  acceptance of the claimant’s demand for settlement to provide
  209  the completed affidavit to the insurer. If the insured is
  210  incapacitated or deceased, a financial affidavit may be
  211  completed by the insured’s estate, bankruptcy trustee, successor
  212  in interest, or an agent of the insured granted a power of
  213  attorney. The affidavit shall be on a form adopted by rule by
  214  the department unless such form is not adopted by the
  215  department.
  216         (b)No later than 35 days after an insurer accepts a demand
  217  for settlement which requests a financial affidavit, the insurer
  218  shall provide to the claimant or, when the claimant is
  219  represented by counsel, to the claimant’s attorney:
  220         1.The completed financial affidavit; or
  221         2.Notice of the insured’s failure to provide the requested
  222  financial affidavit.
  223         (c)A financial affidavit must include all of the
  224  following:
  225         1.The insured’s assets at the time of the loss, including:
  226         a.Cash, stocks, bonds, and nonretirement-based mutual
  227  funds;
  228         b.Nonhomestead real property;
  229         c.All registered vehicles;
  230         d.All bank accounts;
  231         e.An estimated net accounting of all other assets; and
  232         f.Any additional information included by the department.
  233         2.The insured’s liabilities, including:
  234         a.Mortgage debt;
  235         b.Credit card debt;
  236         c.Child support and alimony payments;
  237         d.Other liabilities; and
  238         e.Any additional information included by the department.
  239         3.For a corporate entity, information on its balance
  240  sheet, including the corporate entity’s:
  241         a.Cash, property, equipment, and inventory;
  242         b.Liabilities, including obligations, rent, money owed to
  243  vendors, payroll, and taxes;
  244         c.Other information relevant to understanding the entity’s
  245  capital and net worth; and
  246         d.Any additional information included by the department.
  247         4.A list of all insurance policies, stating the name of
  248  the insurer and policy number of each policy, which could
  249  provide coverage for the claim stated in the demand for
  250  settlement served pursuant to subsection (6).
  251         5.For natural persons, a statement of whether the insured
  252  was acting in the course and scope of employment at the time of
  253  the incident giving rise to the claim set forth in the demand
  254  for settlement served pursuant to subsection (6) and, if so,
  255  providing the name and contact information for that employer.
  256         (d)The department shall adopt by rule a form for the
  257  affidavit as provided in this section. The form must include all
  258  information specified in paragraph (c) and any additional
  259  information that the department finds necessary for a claimant
  260  to determine an insured’s assets and liabilities.
  261         (8) SAFE HARBORS.—
  262         (a)When one claim arises out of a single occurrence, an
  263  insurer is not liable in a bad faith failure to settle action if
  264  the insurer complies with the best practices standards in
  265  paragraphs (4)(b) and (i) and subparagraph (4)(j)1. and tenders
  266  its policy limits within 60 days after receiving a demand for
  267  settlement under subsection (6). In a claim where the insured’s
  268  liability is clear and the claimant’s injuries are so serious
  269  that a judgment in excess of the policy limits is likely, this
  270  safe harbor applies only if the insurer continues, until the
  271  trier of fact renders an excess judgment against the insured, to
  272  tender policy limits in exchange for a release of the insured.
  273  An insurer that meets the requirements of this paragraph is not
  274  liable in a bad faith failure to settle action.
  275         (b)When multiple claims arise out of a single occurrence
  276  and the combined value of all claims exceeds the total of all
  277  applicable policy limits, if the insurer globally tenders all
  278  applicable policy limits to one or more of the known claimants
  279  within 60 days after it receives notice of the loss and complies
  280  with the best practices standards in paragraphs (4)(b) and (i)
  281  and subparagraph (4)(j)2., such insurer is not liable in a bad
  282  faith failure to settle action. This paragraph does not require
  283  that an insurer automatically tender policy limits within 60
  284  days in every multiclaimant case.
  285         (9) RELEASE.—An insurer that accepts a demand for
  286  settlement under subsection (6) is entitled to a release of the
  287  insured, except as provided in paragraph (6)(d).
  288         (10) BURDEN OF PROOF.—In any action for bad faith failure
  289  to settle:
  290         (a)The claimant must prove by the preponderance of the
  291  evidence that the insurer failed to comply with one or more of
  292  the best practice standards of subsection (4) and thereby
  293  violated its duty of good faith to the insured.
  294         (b)If the claimant meets its burden of proof established
  295  in paragraph (a), a rebuttable presumption is created that the
  296  insurer’s failure to comply with the best practice standards is
  297  the proximate cause of the insurer’s bad faith failure to settle
  298  a third-party claim. To rebut this presumption, the insurer must
  299  prove by the preponderance of the evidence that:
  300         1.The insurer’s violation of one or more best practice
  301  standards was not the proximate cause of the excess judgment; or
  302         2.The insurer availed itself of a safe harbor under
  303  subsection (8).
  304         (c) In determining whether an insurer in bad faith failed
  305  to settle, the trier of fact shall consider all of the
  306  following:
  307         1. Whether the insurer failed to settle a claim when, under
  308  all the circumstances, it could and should have done so, had it
  309  acted fairly and honestly toward the insured and with due regard
  310  for the insured’s interests.
  311         2. Whether the insurer complied with the best practice
  312  standards of subsection (4) using the same degree of care and
  313  diligence as a person of ordinary care and prudence would
  314  exercise in the management of his or her own business.
  315         3. Whether the claimant or insured misrepresented material
  316  facts to the insurer or made material omissions of fact to the
  317  insurer.
  318         4. Whether the insured denied liability or requested that
  319  the case be defended after the insurer fully advised the insured
  320  as to the facts and risks.
  321         5. Whether the claimant or insured failed to provide
  322  relevant information to the insurer on a timely basis.
  323         6. Whether the insurer timely informed the insured of a
  324  demand to settle within the limits of coverage, the right to
  325  retain personal counsel, and the risk of litigation.
  326         7. The insurer’s willingness to negotiate with the claimant
  327  in anticipation of settlement.
  328         8. The amount of damages the claimant incurred or was
  329  likely to incur in the future under the facts known or
  330  reasonably available at the time of the insurer’s response.
  331         9. If applicable, whether there were multiple third-party
  332  claimants seeking, in the aggregate, compensation in excess of
  333  the policy limits from the insured; and, if so, whether the
  334  insurer breached its duty to attempt to minimize the magnitude
  335  of possible excess judgments against the insured and to attempt
  336  to settle as many claims as possible within the policy limits in
  337  exchange for a release of the insured from further liability. In
  338  such circumstances, the insurer is entitled to great discretion
  339  to decide how much to offer each respective claimant in its
  340  attempt to protect the insured. In its effort to minimize the
  341  excess liability of the insured, the insurer may use its
  342  discretion to offer the full available policy limits to one or
  343  more claimants to the exclusion of others and may leave the
  344  insured exposed to some liability after all the policy limits
  345  are paid. An insurer does not act in bad faith simply because it
  346  is unable to settle all claims in a multiple claimant case. It
  347  is a defense to any such claim if the insurer establishes that
  348  it used its discretion for the benefit of its insureds and
  349  complied with the other best practice standards of this section.
  350         10. Additional factors that the court determines to be
  351  relevant.
  352         (d) The trier of fact, in determining whether an insurer in
  353  bad faith failed to settle, must be informed that an excess
  354  judgment occurred but may not be informed of the amount of the
  355  excess judgment.
  356         (11) DAMAGES.—If the trier of fact finds that a claimant
  357  has met its burden of proof, an insurer is liable for the amount
  358  of any excess judgment. No other damages, including, but not
  359  limited to, punitive damages, may be awarded.
  360  
  361  
  362  ================= T I T L E  A M E N D M E N T ================
  363  And the title is amended as follows:
  364         Delete lines 110 - 174
  365  and insert:
  366         settle third-party claim actions against any insurer
  367         for a loss arising out of the ownership, maintenance,
  368         or use of a motor vehicle under specified
  369         circumstances; providing that insurers have a duty of
  370         good faith; defining the term “bad faith failure to
  371         settle”; specifying best practice standards for
  372         insurers upon receiving notice of a claim or a demand
  373         for settlement; specifying certain requirements for
  374         insurer communications to an insured in handling
  375         third-party claims; specifying requirements for the
  376         insurer when single and multiple claims arise out of a
  377         single occurrence under certain conditions; specifying
  378         conditions precedent for claimants filing bad faith
  379         failure to settle third-party claim actions;
  380         prohibiting claimants from placing conditions on
  381         acceptance of a demand for settlement other than
  382         electing the right to receive a financial affidavit;
  383         specifying requirements for and information that must
  384         be included in a demand for settlement; requiring a
  385         demand for settlement to release the insured from
  386         liability under certain conditions; authorizing a
  387         claimant to withdraw a demand for settlement after
  388         receiving certain information from an insurer within a
  389         certain timeframe; providing that an insurer does not
  390         have a further duty to defend if it accepts a demand
  391         for settlement under certain conditions; specifying
  392         requirements for insureds providing financial
  393         affidavits requested by insurers; requiring insurers
  394         that accept demands for settlement which request
  395         financial affidavits to provide certain information to
  396         claimants; specifying requirements for information
  397         that must be included in a financial affidavit;
  398         requiring the department to adopt a form for financial
  399         affidavits by rule; providing that insurers may not be
  400         held liable in certain third-party bad faith failure
  401         to settle actions if they comply with best practice
  402         standards and tender policy limits within a certain
  403         timeframe; specifying conditions for applicability of
  404         such safe harbor; providing construction; providing
  405         that insurers may not be held liable in certain third
  406         party bad faith failure to settle actions involving
  407         multiple claims if such insurers globally tender
  408         policy limits within a certain timeframe; specifying
  409         that insurers that accept demands for settlement are
  410         entitled to releases of their insureds; providing an
  411         exception; requiring claimants to prove in any bad
  412         faith failure to settle action by a preponderance of
  413         the evidence that the insurer violated its duty of
  414         good faith by failing to comply with best practice
  415         standards; providing for a rebuttable presumption;
  416         specifying factors for the trier of fact to consider
  417         in determining whether an insurer in bad faith failed
  418         to settle; providing that an insurer has discretion in
  419         offers to claimants; providing construction; providing
  420         for a defense to claims of bad faith under certain
  421         circumstances; requiring the trier of fact to be
  422         informed of an excess judgment; prohibiting disclosure
  423         of certain judgment information to the trier of fact;
  424         limiting damages under certain circumstances;
  425         providing that judgment creditors must