Florida Senate - 2021 COMMITTEE AMENDMENT Bill No. SB 54 Ì799160+Î799160 LEGISLATIVE ACTION Senate . House . . . . . ————————————————————————————————————————————————————————————————— ————————————————————————————————————————————————————————————————— The Committee on Banking and Insurance (Passidomo) recommended the following: 1 Senate Amendment (with title amendment) 2 3 Delete lines 1677 - 1949 4 and insert: 5 Section 33. Paragraph (b) of subsection (1) and subsection 6 (8) of section 624.155, Florida Statutes, are amended to read: 7 624.155 Civil remedy.— 8 (1) Any person may bring a civil action against an insurer 9 when such person is damaged: 10 (b) By the commission of any of the following acts by the 11 insurer: 12 1. Except for a third-party bad faith failure to settle a 13 claim subject to s. 624.156, not attempting in good faith to 14 settle claims when, under all the circumstances, it could and 15 should have done so, had it acted fairly and honestly toward its 16 insured and with due regard for her or his interests; 17 2. Making claims payments to insureds or beneficiaries not 18 accompanied by a statement setting forth the coverage under 19 which payments are being made;
or20 3. Except as to liability coverages, failing to promptly 21 settle claims, when the obligation to settle a claim has become 22 reasonably clear, under one portion of the insurance policy 23 coverage in order to influence settlements under other portions 24 of the insurance policy coverage; or 25 4. When handling a first-party claim under a motor vehicle 26 insurance policy, not attempting in good faith to settle such 27 claim pursuant to subparagraph 1. when such failure is caused by 28 a failure to communicate to an insured: 29 a. Information on who is adjusting the claim; 30 b. Any issues that may impair the insured’s coverage; 31 c. Information that might resolve the issue in a prompt 32 manner; 33 d. Any basis for the insurer’s rejection or nonacceptance 34 of any settlement offer; or 35 e. Any needed extensions to respond to a time-limited 36 settlement offer. 37 38 Notwithstanding the provisions of the above to the contrary, a 39 person pursuing a remedy under this section need not prove that 40 such act was committed or performed with such frequency as to 41 indicate a general business practice. 42 (8) The civil remedy specified in this section does not 43 preempt any other remedy or cause of action provided for 44 pursuant to any other statute or pursuant to the common law of 45 this state. A Anyperson is may obtain a judgment under either46 the common-law remedy of bad faith or this statutory remedy, but47 shallnot beentitled to a judgment under multiple bad faith 48 bothremedies, whether under statute or common law. This section 49 shall not be construed to create a common-law cause of action. 50 The damages recoverable pursuant to this section shall include 51 those damages which are a reasonably foreseeable result of a 52 specified violation of this section by the authorized insurer 53 and may include an award or judgment in an amount that exceeds 54 the policy limits. 55 Section 34. Section 624.156, Florida Statutes, is created 56 to read: 57 624.156 Bad faith failure to settle actions against motor 58 vehicle insurers by third-party claimants.— 59 (1) SCOPE.—This section applies in all actions against any 60 insurer by a third party for bad faith failure to settle, 61 whether under statute or common law, for a loss arising out of 62 the ownership, maintenance, or use of a motor vehicle operated 63 or principally garaged in this state at the time of an accident, 64 regardless of whether the insurer is authorized to do business 65 in this state or issued a policy in this state. 66 (2) DUTY OF GOOD FAITH.—In handling claims, an insurer 67 stands as a fiduciary for its insured and must handle claims in 68 good faith. The insurer shall comply with the best practice 69 standards of subsection (4) using the same degree of care and 70 diligence as a person of ordinary care and prudence would 71 exercise in the management of his or her own business. 72 (3) BAD FAITH FAILURE TO SETTLE.—“Bad faith failure to 73 settle” means an insurer’s failure to settle a claim when, under 74 all the circumstances, it could and should have done so, had it 75 acted fairly and honestly toward its insured and with due regard 76 for the insured’s interests. 77 (4) BEST PRACTICE STANDARDS.—Upon the earlier of receiving 78 notice of a claim or, under subsection (6), a demand for 79 settlement, an insurer must do all of the following: 80 (a) Assign a duly licensed and appointed insurance adjuster 81 to investigate the claim and resolve any questions concerning 82 the existence or extent of the insured’s coverage. 83 (b) Evaluate every claim fairly, honestly, and with due 84 regard for the interests of its insured, consider the full 85 extent of the claimant’s recoverable damages, and consider the 86 information in a reasonable and prudent manner. 87 (c) Request from the insured or claimant additional 88 relevant information deemed necessary. 89 (d) Conduct all verbal and written communications with the 90 utmost honesty and complete candor. 91 (e) Make reasonable efforts to explain to nonattorneys 92 matters requiring expertise beyond the level normally expected 93 of a layperson with no training in insurance or claims-handling 94 issues. 95 (f) Save all written communications and note and save all 96 verbal communications in a reasonable manner. 97 (g) Provide the insured, upon request, with all 98 nonprivileged communications related to the insurer’s handling 99 of the claim. 100 (h) Provide, at the insurer’s expense, reasonable 101 accommodations necessary to communicate effectively with an 102 insured covered under the Americans with Disabilities Act. 103 (i) In handling third-party claims, communicate to an 104 insured: 105 1. The identity of any other person or entity the insurer 106 knows may be liable; 107 2. The insurer’s activity on and evaluation of the claim; 108 3. The likelihood and possible extent of an excess 109 judgment; 110 4. Steps the insured can take to avoid exposure to an 111 excess judgment; 112 5. Requests for examinations under oath and an explanation 113 of the consequences of an insured’s failure to submit to an 114 examination under oath; and 115 6. Any demands for settlement under subsection (6) or 116 settlement offers. 117 (j) When a loss involves multiple claimants and the 118 claimants are unwilling to settle cumulatively within the policy 119 limits and release the insured from further liability, in 120 addition to fulfilling the requirements of paragraphs (a)-(i), 121 attempt to minimize the risk of excess judgments against the 122 insured and settle as many claims as possible within the policy 123 limits in exchange for a release of the insured from further 124 liability. 125 (5) CONDITIONS PRECEDENT.—It is a condition precedent to 126 filing a third-party action for bad faith failure to settle 127 against an insurer that the claimant must: 128 (a) Serve a demand for settlement, as provided in 129 subsection (6), within the insurer’s limits of liability in 130 exchange for a release of further liability against the insured; 131 and 132 (b) Obtain a final judgment in excess of the policy limits 133 against the insured. 134 (6) DEMAND FOR SETTLEMENT.—A demand for settlement must do 135 all of the following: 136 (a) Identify the: 137 1. Date and location of loss; 138 2. Name, address, and date of birth of the claimant; 139 3. Name of each insured to whom the demand for settlement 140 is directed; and 141 4. Legal and factual basis of the claim. 142 (b) Provide a reasonably detailed description of the 143 claimant’s: 144 1. Known injuries caused or aggravated by the incident on 145 which the claim is based; 146 2. Medical treatment causally related to the incident on 147 which the claim is based; and 148 3. Type and amount of known damages incurred and, if any, 149 the damages the claimant reasonably anticipates incurring in the 150 future. 151 (c) State the amount of the demand for settlement. 152 (d) State whether the demand for settlement is conditioned 153 on the completion of an examination under oath, as authorized by 154 subsection (8). 155 (e) Provide a physical address, an e-mail address, and a 156 facsimile number for further communications, including, but not 157 limited to, responses to the demand for settlement. 158 (f) Release the insured from any further liability upon the 159 insurer’s acceptance of a demand for settlement which is not 160 withdrawn pursuant to paragraph (8)(e) or paragraph (8)(g), or 161 accepted pursuant to paragraph (8)(f). 162 (g) Be served upon the insurer by certified mail at the 163 address designated by the insurer with the Department of 164 Financial Services under s. 624.422(2). 165 (7) LIMITATIONS ON CONDITIONS OF ACCEPTANCE OF A DEMAND.—A 166 claimant may not place any conditions on acceptance of a demand 167 for settlement other than electing the right to examine the 168 insured under oath regarding any of the following: 169 (a) Whether the insured has the ability to satisfy a claim 170 for damages in excess of the insurer’s limits of liability. 171 (b) Whether any other person or entity may have actual or 172 potential direct or vicarious liability for the insured’s 173 negligence. 174 (c) Whether any other insurance exists which may cover some 175 or all of the damages sustained by the claimant. 176 (8) EXAMINATION UNDER OATH.—After serving a demand for 177 settlement, a claimant may examine the insured under oath, on 178 one occasion for a period of time not to exceed 2 hours, 179 regarding only the issues in subsection (7). 180 (a) The claimant may request that the insured bring to the 181 examination relevant documents in the insured’s possession, 182 custody, or control, including, but not limited to, credit 183 reports, insurance policies, bank statements, tax returns, 184 deeds, titles, and other proof of assets or liabilities. 185 (b) The claimant may not examine the insured regarding 186 liability. 187 (c) The claimant, the insurer, and the insured shall 188 cooperate in scheduling the examination under oath. The insurer 189 shall notify the insured of the date, time, and location of the 190 examination under oath. 191 (d) The examination under oath must occur within 30 days 192 after the insurer’s acceptance of the settlement demand. 193 (e) The claimant may withdraw the demand for settlement if 194 the insured refuses to submit to an examination under oath. 195 (f) If the insured refuses to submit to an examination 196 under oath, the insurer may accept the demand for settlement 197 without requiring a release of the insured. An insurer that 198 accepts the demand for settlement pursuant to this paragraph 199 does not have any further duty to defend the insured and may not 200 be held liable for damages to the insured if the claimant 201 thereafter obtains an excess judgment against the insured. 202 (g) Within 7 days after the examination under oath, the 203 claimant may withdraw the demand for settlement. 204 (9) SAFE HARBOR.—In any third-party action for bad faith 205 failure to settle, an insurer may not be held liable if it 206 tenders its policy limits within 30 days of receiving a demand 207 for settlement under subsection (6). 208 (10) RELEASE.—An insurer that accepts a demand for 209 settlement under subsection (6) shall be entitled to a release 210 of its insured, except as provided in paragraph (8)(f). 211 (11) BURDEN OF PROOF.—In any third-party action for bad 212 faith failure to settle, the claimant must prove by the 213 preponderance of the evidence that the insurer violated its duty 214 of good faith under subsection (2) and that the insurer in bad 215 faith failed to settle, as defined in subsection (3). 216 (a) In determining whether an insurer violated its duty of 217 good faith under subsection (2) and in bad faith failed to 218 settle, as defined in subsection (3), the trier of fact shall 219 consider all of the following: 220 1. Whether the insurer complied with the best practice 221 standards of subsection (4) using the same degree of care and 222 diligence as a person of ordinary care and prudence would 223 exercise in the management of his or her own business. 224 2. Whether the insurer failed to settle a claim when, under 225 all the circumstances, it could and should have done so, had it 226 acted fairly and honestly toward its insured and with due regard 227 for the insured’s interests. 228 3. Whether the claimant or insured failed to provide 229 relevant information to the insurer on a timely basis. 230 4. Whether the claimant or insured misrepresented material 231 facts to the insurer or made material omissions of fact to the 232 insurer. 233 5. Whether the insured denied liability or requested that 234 the case be defended after the insurer fully advised the insured 235 as to the facts and risks. 236 6. Whether the insurer timely informed the insured of a 237 demand to settle within the limits of coverage, the right to 238 retain personal counsel, and the risk of litigation. 239 7. The insurer’s willingness to negotiate with the claimant 240 in anticipation of settlement. 241 8. The amount of damages the claimant incurred or was 242 likely to incur in the future under the facts known or 243 reasonably available at the time of the insurer’s response. 244 9. If applicable, whether there were multiple third-party 245 claimants seeking, in the aggregate, compensation in excess of 246 the policy limits from the insured; and, if so, whether the 247 insurer breached its duty to attempt to minimize the magnitude 248 of possible excess judgments against the insured and to attempt 249 to settle as many claims as possible within the policy limits in 250 exchange for a release of the insured from further liability. 251 10. Additional factors that the court determines to be 252 relevant. 253 (b) The trier of fact, in determining whether an insurer in 254 bad faith failed to settle, must be informed that an excess 255 judgment occurred but may not be informed of the amount of the 256 excess judgment. 257 (12) DAMAGES.—An insurer that is found to have violated its 258 duty of good faith under subsection (2) and in bad faith failed 259 to settle, as defined in subsection (3), is liable for the 260 amount of any excess judgment. No other damages, including but 261 not limited to punitive damages, may be awarded in a third-party 262 bad faith failure to settle action. 263 (13) ENFORCEMENT.—If a judgment creditor has served a 264 demand for settlement under subsection (6), and the judgment 265 exceeds the insured’s limits of liability, the judgment creditor 266 must be subrogated to the rights of the insured against the 267 insurer for common law bad faith. 268 (14) LIMITATION ON MULTIPLE REMEDIES.—A person is not 269 entitled to a judgment under multiple bad faith remedies, 270 whether under statute or common law. 271 272 ================= T I T L E A M E N D M E N T ================ 273 And the title is amended as follows: 274 Delete lines 93 - 160 275 and insert: 276 providing an exception to the circumstances under 277 which a person who is damaged may bring a civil action 278 against an insurer; adding a cause of action against 279 insurers in certain circumstances; providing that a 280 person is not entitled to judgments under multiple bad 281 faith remedies; creating s. 624.156, F.S.; providing 282 that the section applies to bad faith failure to 283 settle actions against any insurer brought by a third 284 party for a loss arising out of the ownership, 285 maintenance, or use of a motor vehicle under specified 286 circumstances; providing that insurers have a duty of 287 good faith; defining the term “bad faith failure to 288 settle”; specifying best practice standards for 289 insurers upon receiving notice of a claim or a demand 290 for settlement; specifying certain requirements for 291 insurer communications to an insured in handling 292 third-party claims; specifying requirements for the 293 insurer when a loss involves multiple claimants under 294 certain conditions; specifying conditions precedent 295 for claimants filing third-party bad faith failure to 296 settle actions; specifying requirements for 297 information that must be included in a demand for 298 settlement; requiring a demand for settlement to 299 release the insured from liability under certain 300 conditions; requiring the demand for settlement be 301 served upon the insurer at the address designated with 302 the Department of Financial Services; prohibiting 303 claimants from placing conditions on acceptance of a 304 demand for settlement other than electing the right to 305 examine the insured under oath regarding certain 306 information; authorizing claimants to examine insureds 307 under oath under certain conditions; authorizing the 308 claimant to request the insured bring relevant 309 documents to the examination under oath; prohibiting 310 the claimant from examining the insured under oath 311 regarding liability; requiring the claimant, insurer, 312 and insured to cooperate in scheduling the examination 313 under oath; specifying the timeframe within which the 314 examination must take place; authorizing the claimant 315 to withdraw the demand for settlement if the insured 316 refuses to submit to an examination under oath; 317 authorizing an insurer to accept a demand for 318 settlement if the insured refuses to submit to an 319 examination under oath; absolving an insurer of a duty 320 to defend and of liability under certain 321 circumstances; specifying the timeframe within which a 322 claimant may withdraw a demand for settlement; 323 providing that insurers may not be held liable in a 324 third-party bad faith failure to settle action if they 325 tender policy limits within a certain timeframe; 326 specifying that insurers that accept demands for 327 settlement are entitled to releases of their insureds; 328 providing an exception; requiring claimants to prove 329 in any third-party bad faith failure to settle action 330 by a preponderance of the evidence that the insurer 331 violated its duty of good faith and in bad faith 332 failed to settle; specifying factors for the trier of 333 fact to consider in determining whether an insurer 334 violated its duty of good faith and in bad faith 335 failed to settle; requiring the trier of fact to be 336 informed of an excess judgment; prohibiting disclosure 337 of certain judgment information to the trier of fact; 338 limiting damages in third-party bad faith failure to 339 settle actions; providing that judgment creditors must 340 be subrogated to the rights of the insured under 341 certain circumstances; prohibiting multiple bad faith 342 remedies; amending s.