Florida Senate - 2023 SB 7052
By the Committee on Banking and Insurance
597-03563-23 20237052__
1 A bill to be entitled
2 An act relating to insurer accountability; amending s.
3 624.307, F.S.; authorizing electronic responses to
4 certain requests from the Division of Consumer
5 Services of the Department of Financial Services
6 concerning consumer complaints; revising the timeframe
7 in which responses must be made; revising
8 administrative penalties; amending s. 624.315, F.S.;
9 specifying reporting requirements for the Office of
10 Insurance Regulation’s internal auditor in the
11 office’s annual report relating to the enforcement of
12 insurer compliance; creating s. 624.3152, F.S.;
13 specifying requirements for the office to report
14 quarterly to the Legislature relating to the
15 enforcement of insurer compliance; amending s.
16 624.316, F.S.; requiring the office to create a
17 specified methodology for scheduling examinations of
18 insurers; specifying requirements for such
19 methodology; providing construction; amending s.
20 624.3161, F.S.; providing that authorized property
21 insurers must, rather than may, be subject to an
22 additional market conduct examination after a
23 hurricane if specified conditions are met; revising
24 the applicability of such conditions; requiring the
25 office to create, and the Financial Services
26 Commission to adopt by rule, a specified methodology
27 for scheduling examinations of insurers; specifying
28 requirements for such methodology; providing
29 construction; amending s. 624.4211, F.S.; revising
30 administrative fines the office may impose in lieu of
31 revocation or suspension; amending s. 624.424, F.S.;
32 revising reporting requirements for insurers that pay
33 financial consideration or payment to affiliates;
34 revising factors the office must consider in
35 determining whether such financial consideration or
36 payment is fair and reasonable; specifying reporting
37 requirements for insurers relating to agreements with
38 affiliates; creating s. 624.4301, F.S.; specifying
39 requirements for insurers temporarily suspending
40 writing new policies in notifying the office; amending
41 s. 626.207, F.S.; revising a condition for
42 disqualification of an insurance representative
43 applicant or licensee; amending s. 626.9521, F.S.;
44 revising and specifying applicable fines for unfair
45 methods of competition and unfair or deceptive acts or
46 practices; amending s. 626.9541, F.S.; adding an
47 unfair claim settlement practice by an insurer;
48 prohibiting an officer or a director of an impaired
49 insurer to authorize or permit the insurer to pay a
50 bonus to any officer or director of the insurer;
51 defining the term “bonus”; providing a criminal
52 penalty; amending s. 626.9743, F.S.; revising
53 applicability of provisions relating to motor vehicle
54 insurance claim settlement practices; specifying
55 requirements, procedures, and authorized actions for
56 insurers relating to communications, investigations,
57 estimates, and recordkeeping; defining the terms
58 “factors beyond the control of the insurer” and
59 “insurer”; specifying required notices by insurers;
60 specifying requirements and procedures for insurers in
61 paying or denying claims; providing construction and
62 applicability; amending s. 626.989, F.S.; revising a
63 reporting requirement for the department’s Division of
64 Investigative and Forensic Services; requiring the
65 division to submit an annual performance report to the
66 Legislature; specifying requirements for the report;
67 amending s. 627.0629, F.S.; specifying requirements
68 for residential property insurers in providing certain
69 hurricane mitigation discount information to
70 policyholders in a specified manner; specifying
71 requirements for the office in reevaluating and
72 updating certain fixtures and construction techniques;
73 deleting obsolete dates; amending s. 627.351, F.S.;
74 prohibiting Citizens Property Insurance Corporation
75 from determining that a risk is ineligible for
76 coverage solely on a specified basis; amending s.
77 627.410, F.S.; prohibiting the office from exempting
78 specified insurers from form filing requirements;
79 creating s. 627.4108, F.S.; providing legislative
80 intent; specifying requirements for insurers in
81 submitting claims-handling manuals to the office;
82 authorizing the office to conduct examinations;
83 authorizing the commission to adopt emergency rules;
84 amending s. 627.4133, F.S.; revising prohibitions on
85 insurers against the cancellation or nonrenewal of
86 property insurance policies; revising applicability;
87 providing construction; defining the term “insurer”;
88 amending s. 627.426, F.S.; requiring the office to
89 ensure that each liability insurer, upon receiving
90 certain notice, takes specified actions; providing
91 construction; amending s. 627.701, F.S.; providing
92 that if a roof deductible is applied under a personal
93 lines residential property insurance policy, no other
94 deductible under the policy may be applied to any
95 other loss to the property caused by the same covered
96 peril; amending s. 627.70132, F.S.; providing for the
97 tolling of certain timeframes for filing notices of
98 property insurance claims for servicemembers; amending
99 s. 627.7019, F.S.; providing that surplus lines
100 insurers are subject to the commission’s rulemaking
101 authority as to requirements of insurers after natural
102 disasters; amending s. 627.782, F.S.; revising rate
103 filing requirements for title insurers; providing that
104 the office, rather than the commission, must review
105 premium rates; providing construction relating to
106 chapter 2022-271, Laws of Florida; requiring
107 residential property insurers and motor vehicle
108 insurer rate filings to reflect certain savings and
109 reductions in expenses; specifying requirements for
110 the office in reviewing rate filings; authorizing the
111 office to develop certain factors and contract with a
112 vendor for a certain purpose; providing
113 appropriations; providing an effective date.
114
115 Be It Enacted by the Legislature of the State of Florida:
116
117 Section 1. Paragraph (b) of subsection (10) of section
118 624.307, Florida Statutes, is amended to read:
119 624.307 General powers; duties.—
120 (10)
121 (b) Any person licensed or issued a certificate of
122 authority by the department or the office shall respond, in
123 writing or electronically, to the division within 14 20 days
124 after receipt of a written request for documents and information
125 from the division concerning a consumer complaint. The response
126 must address the issues and allegations raised in the complaint
127 and include any requested documents concerning the consumer
128 complaint not subject to attorney-client or work-product
129 privilege. The division may impose an administrative penalty for
130 failure to comply with this paragraph of up to $5,000 $2,500 per
131 violation upon any entity licensed by the department or the
132 office and $250 for the first violation, $500 for the second
133 violation, and up to $1,000 per for the third or subsequent
134 violation by upon any individual licensed by the department or
135 the office.
136 Section 2. Present subsection (4) of section 624.315,
137 Florida Statutes, is redesignated as subsection (5), and a new
138 subsection (4) is added to that section, to read:
139 624.315 Annual report.—
140 (4) The internal auditor of the office shall detail all
141 actions of the office to enforce insurer compliance during the
142 previous year. For each of the following, the report must detail
143 the insurer or other licensee or registrant against whom such
144 action was taken; whether the office found any violation of law
145 or rule by such party, and, if so, detail such violation; and
146 the resolution of such action, including any penalties imposed
147 by the office. The report must be published on the website of
148 the office and submitted to the Governor, the President of the
149 Senate, and the Speaker of the House of Representatives on or
150 before February 15 of each year. The report must include, but
151 need not be limited to:
152 (a) The revocation, denial, or suspension of any license or
153 registration issued by the office.
154 (b) All actions taken pursuant to s. 624.310.
155 (c) Fines imposed by the office for violations of this
156 code.
157 (d) Consent orders entered into by the office.
158 (e) Examinations and investigations conducted and completed
159 by the office pursuant to ss. 624.316 and 624.3161.
160 (f) Investigations conducted and completed, by line of
161 insurance, for which the office found violations of law or rule
162 but did not take enforcement action.
163 Section 3. Section 624.3152, Florida Statutes, is created
164 to read:
165 624.3152 Quarterly report of enforcement activity.—Each
166 quarter, the office shall create a report detailing all actions
167 of the office to enforce insurer compliance. The report must be
168 submitted to the commission, the President of the Senate, the
169 Speaker of the House of Representatives, and the legislative
170 committees with jurisdiction over matters of insurance. For each
171 of the following, the report must detail the insurer or other
172 licensee or registrant against whom such action was taken;
173 whether the office found any violation of law or rule by such
174 party, and, if so, detail such violation; and the resolution of
175 such action, including any penalties imposed by the office. The
176 report is due on or before April 30, July 31, October 31, and
177 January 31, respectively, for the immediately preceding quarter.
178 The report must include, but need not be limited to:
179 (1) The revocation, denial, or suspension of any license or
180 registration issued by the office.
181 (2) All actions taken pursuant to s. 624.310.
182 (3) Fines imposed by the office for violations of this
183 code.
184 (4) Consent orders entered into by the office.
185 (5) Examinations and investigations conducted and completed
186 by the office pursuant to ss. 624.316 and 624.3161.
187 (6) Investigations conducted and completed, by line of
188 insurance, for which the office found violations of law or rule
189 but did not take enforcement action.
190 Section 4. Subsection (3) is added to section 624.316,
191 Florida Statutes, to read:
192 624.316 Examination of insurers.—
193 (3) The office shall create a risk-based selection
194 methodology for scheduling examinations of insurers subject to
195 this section. This requirement does not restrict the authority
196 of the office to conduct market conduct examinations as often as
197 it deems advisable. Such methodology must include:
198 (a) Use of currently required risk-based capital reports to
199 prioritize financial examinations of insurers when such
200 reporting indicates a decline in the insurer’s financial
201 condition.
202 (b) Consideration of any downgrade or threatened downgrade
203 in the insurer’s financial strength rating.
204 (c) Prioritization of property insurers for which the
205 office identifies significant concerns about an insurer’s
206 solvency pursuant to s. 627.7154.
207 (d) Any other conditions the office deems necessary for the
208 protection of the public.
209 Section 5. Subsection (7) of section 624.3161, Florida
210 Statutes, is amended, and subsection (8) is added to that
211 section, to read:
212 624.3161 Market conduct examinations.—
213 (7) Notwithstanding subsection (1), any authorized insurer
214 transacting property insurance business in this state must may
215 be subject to an additional market conduct examination after a
216 hurricane if, at any time more than 90 days after the end of the
217 hurricane, the insurer:
218 (a) Is among the top 20 percent of insurers based upon a
219 calculation of the ratio of hurricane-related property insurance
220 claims filed to the number of property insurance policies in
221 force;
222 (b) Is among the top 20 percent of insurers based upon a
223 calculation of the ratio of consumer complaints made to the
224 department to hurricane-related claims;
225 (c) Has made significant payments to its managing general
226 agent since the hurricane; or
227 (d) Is identified by the office as necessitating a market
228 conduct exam for any other reason.
229
230 All relevant criteria under this section and s. 624.316 shall be
231 applied to the market conduct examination under this subsection.
232 Such an examination must be initiated within 18 months after the
233 landfall of a hurricane that results in an executive order or a
234 state of emergency issued by the Governor. This requirement does
235 not limit in any way the authority of the office to conduct at
236 any time a market conduct examination of a property insurer in
237 the aftermath of a hurricane. An examination of an insurer under
238 this subsection must also include an examination of its managing
239 general agent as if it were the insurer.
240 (8) The office shall create, and the commission shall adopt
241 by rule, a risk-based selection methodology for scheduling and
242 conducting market conduct examinations of insurers and other
243 entities regulated by the office. This requirement does not
244 restrict the authority of the office to conduct market conduct
245 examinations as often as it deems necessary. Under such
246 selection methodology, the office must initiate a market conduct
247 examination if any of the following conditions exist relating to
248 an insurer or other entity regulated by the office:
249 (a) An insurance regulator in another state has initiated
250 or taken regulatory action against the insurer or entity,
251 including, but not limited to:
252 1. A licensure denial, suspension, or revocation;
253 2. Imposition of administrative fines; or
254 3. Issuance of a cease and desist order, consent order, or
255 other order regarding actions or omissions of the insurer or
256 entity.
257 (b) Given the insurer’s market share in this state, the
258 department or the office has received a disproportionate number
259 of the following types of claims-handling complaints against the
260 insurer:
261 1. Failure to timely communicate with respect to claims;
262 2. Failure to timely pay claims;
263 3. Untimely payments giving rise to the payment of
264 statutory interest;
265 4. Failure to adjust and pay claims in accordance with the
266 terms and conditions of the policy or contract and in compliance
267 with state law;
268 5. Violations of the Unfair Insurance Trade Practices Act
269 in part IX of chapter 626;
270 6. Failure to use licensed and duly appointed claims
271 adjusters;
272 7. Failure to maintain reasonable claims records; or
273 8. Failure to adhere to the company’s claims-handling
274 manual.
275 (c) The results of a National Association of Insurance
276 Commissioners Market Conduct Annual Statement indicate the
277 insurer is a negative outlier with regard to particular metrics.
278 (d) There is evidence the insurer is engaged in a pattern
279 or practice of violations of the Unfair Insurance Trade
280 Practices Act.
281 (e) The insurer meets the criteria in subsection (7).
282 (f) Any other conditions the office deems necessary for the
283 protection of the public.
284 Section 6. Section 624.4211, Florida Statutes, is amended
285 to read:
286 624.4211 Administrative fine in lieu of suspension or
287 revocation.—
288 (1) If the office finds that one or more grounds exist for
289 the discretionary revocation or suspension of a certificate of
290 authority issued under this chapter, the office may, in lieu of
291 such revocation or suspension, impose a fine upon the insurer.
292 (2)(a) With respect to a any nonwillful violation, such
293 fine may not exceed:
294 1. Twenty-five thousand dollars per violation, up to an
295 aggregate amount of $100,000 for all nonwillful violations
296 arising out of the same action, related to a covered loss or
297 claim caused by an emergency for which the Governor declared a
298 state of emergency pursuant to s. 252.36.
299 2. Twelve thousand five hundred dollars $5,000 per
300 violation, up to. In no event shall such fine exceed an
301 aggregate amount of $50,000 $20,000 for all other nonwillful
302 violations arising out of the same action.
303 (b) If an insurer discovers a nonwillful violation, the
304 insurer shall correct the violation and, if restitution is due,
305 make restitution to all affected persons. Such restitution shall
306 include interest at 12 percent per year from either the date of
307 the violation or the date of inception of the affected person’s
308 policy, at the insurer’s option. The restitution may be a credit
309 against future premiums due provided that interest accumulates
310 until the premiums are due. If the amount of restitution due to
311 any person is $50 or more and the insurer wishes to credit it
312 against future premiums, it shall notify such person that she or
313 he may receive a check instead of a credit. If the credit is on
314 a policy that is not renewed, the insurer shall pay the
315 restitution to the person to whom it is due.
316 (3)(a) With respect to a any knowing and willful violation
317 of a lawful order or rule of the office or commission or a
318 provision of this code, the office may impose a fine upon the
319 insurer in an amount not to exceed:
320 1. Two hundred thousand dollars for each such violation, up
321 to an aggregate amount of $1 million for all knowing and willful
322 violations arising out of the same action, related to a covered
323 loss or claim caused by an emergency for which the Governor
324 declared a state of emergency pursuant to s. 252.36.
325 2. One hundred thousand dollars $40,000 for each such
326 violation, up to. In no event shall such fine exceed an
327 aggregate amount of $500,000 $200,000 for all other knowing and
328 willful violations arising out of the same action.
329 (b) In addition to such fines, the insurer shall make
330 restitution when due in accordance with subsection (2).
331 (4) The failure of an insurer to make restitution when due
332 as required under this section constitutes a willful violation
333 of this code. However, if an insurer in good faith is uncertain
334 as to whether any restitution is due or as to the amount of such
335 restitution, it shall promptly notify the office of the
336 circumstances; and the failure to make restitution pending a
337 determination thereof shall not constitute a violation of this
338 code.
339 Section 7. Subsection (13) of section 624.424, Florida
340 Statutes, is amended to read:
341 624.424 Annual statement and other information.—
342 (13)(a) Each insurer doing business in this state which
343 pays a fee, commission, or other financial consideration or
344 payment to any affiliate directly or indirectly must is required
345 upon request to provide to the office documentation supporting
346 that such any information the office deems necessary. The fee,
347 commission, or other financial consideration or payment to any
348 affiliate is must be fair and reasonable for each service being
349 provided by contract. In determining whether the fee,
350 commission, or other financial consideration or payment is fair
351 and reasonable, the office shall consider, at a minimum, the
352 following:
353 1. The actual cost of each service provided by an
354 affiliate;
355 2. The cost of that service, if provided by a nonaffiliate;
356 3. The relative financial condition of the insurer and of
357 the managing general agent;
358 4. The level of holding company debt and how that debt is
359 serviced;
360 5. The amount of dividends paid by the managing general
361 agent and for what purpose; and
362 6. Whether the terms of the written contract benefit the
363 insurer and are in the best interest of policyholders.
364 (b) For each agreement with an affiliate in force on July
365 1, 2023, each insurer shall provide to the office no later than
366 October 1, 2023, the cost incurred by the affiliate to provide
367 each service, the amount charged to the insurer for each
368 service, and the dollar amount of fees forgiven, waived, or
369 reimbursed by the affiliate for the two most recent preceding
370 years. If the total dollar amount charged to the insurer was
371 greater than the total cost to provide services for either year,
372 the insurer must explain how it determined the fee was fair and
373 reasonable. For any proposed contract with an affiliate
374 effective after July 1, 2023, the insurer may include a proposal
375 for the same services by an unaffiliated third party to support
376 that the fee, commission, or other financial consideration or
377 payment to the affiliate is fair and reasonable among other
378 things, the actual cost of the service being provided.
379 Section 8. Section 624.4301, Florida Statutes, is created
380 to read:
381 624.4301 Notice of temporary discontinuance of writing new
382 policies.—Any insurer, before temporarily suspending writing new
383 policies in this state, must give written notice to the office
384 of the insurer’s reasons for such action, the effective dates of
385 the temporary suspension, and the proposed communication to its
386 agents. The insurer shall submit such notice to the office the
387 earlier of 20 business days before the effective date of the
388 temporary suspension of writing or 5 business days before
389 notifying its agents of the temporary suspension of writing. The
390 insurer must provide any other information requested by the
391 office related to the insurer’s temporary suspension of writing.
392 Section 9. Paragraph (c) of subsection (3) of section
393 626.207, Florida Statutes, is amended to read:
394 626.207 Disqualification of applicants and licensees;
395 penalties against licensees; rulemaking authority.—
396 (3) An applicant who has been found guilty of or has
397 pleaded guilty or nolo contendere to a crime not included in
398 subsection (2), regardless of adjudication, is subject to:
399 (c) A 7-year disqualifying period for all misdemeanors
400 directly related to the financial services business or any
401 violation of the Florida Insurance Code.
402 Section 10. Subsections (2) and (3) of section 626.9521,
403 Florida Statutes, are amended to read:
404 626.9521 Unfair methods of competition and unfair or
405 deceptive acts or practices prohibited; penalties.—
406 (2) Except as provided in subsection (3), any person who
407 violates any provision of this part is subject to a fine in an
408 amount not greater than $12,500 $5,000 for each nonwillful
409 violation and not greater than $100,000 $40,000 for each willful
410 violation. Fines under this subsection imposed against an
411 insurer may not exceed an aggregate amount of $50,000 $20,000
412 for all nonwillful violations arising out of the same action or
413 an aggregate amount of $500,000 $200,000 for all willful
414 violations arising out of the same action. The fines may be
415 imposed in addition to any other applicable penalty.
416 (3)(a) If a person violates s. 626.9541(1)(l), the offense
417 known as “twisting,” or violates s. 626.9541(1)(aa), the offense
418 known as “churning,” the person commits a misdemeanor of the
419 first degree, punishable as provided in s. 775.082, and an
420 administrative fine not greater than $12,500 $5,000 shall be
421 imposed for each nonwillful violation or an administrative fine
422 not greater than $187,500 $75,000 shall be imposed for each
423 willful violation. To impose an administrative fine for a
424 willful violation under this paragraph, the practice of
425 “churning” or “twisting” must involve fraudulent conduct.
426 (b) If a person violates s. 626.9541(1)(ee) by willfully
427 submitting fraudulent signatures on an application or policy
428 related document, the person commits a felony of the third
429 degree, punishable as provided in s. 775.082, and an
430 administrative fine not greater than $12,500 $5,000 shall be
431 imposed for each nonwillful violation or an administrative fine
432 not greater than $187,500 $75,000 shall be imposed for each
433 willful violation.
434 (c) If a person violates any provision of this part and
435 such violation is related to a covered loss or covered claim
436 caused by an emergency for which the Governor declared a state
437 of emergency pursuant to s. 252.36, such person is subject to a
438 fine in an amount not greater than $25,000 for each nonwillful
439 violation and not greater than $200,000 for each willful
440 violation. Fines under this paragraph imposed against an insurer
441 may not exceed an aggregate amount of $100,000 for all
442 nonwillful violations arising out of the same action or an
443 aggregate amount of $1 million for all willful violations
444 arising out of the same action.
445 (d) Administrative fines under paragraphs (a) and (b) this
446 subsection may not exceed an aggregate amount of $125,000
447 $50,000 for all nonwillful violations arising out of the same
448 action or an aggregate amount of $625,000 $250,000 for all
449 willful violations arising out of the same action.
450 Section 11. Paragraphs (i) and (w) of subsection (1) of
451 section 626.9541, Florida Statutes, are amended to read:
452 626.9541 Unfair methods of competition and unfair or
453 deceptive acts or practices defined.—
454 (1) UNFAIR METHODS OF COMPETITION AND UNFAIR OR DECEPTIVE
455 ACTS.—The following are defined as unfair methods of competition
456 and unfair or deceptive acts or practices:
457 (i) Unfair claim settlement practices.—
458 1. Attempting to settle claims on the basis of an
459 application, when serving as a binder or intended to become a
460 part of the policy, or any other material document which was
461 altered without notice to, or knowledge or consent of, the
462 insured;
463 2. A material misrepresentation made to an insured or any
464 other person having an interest in the proceeds payable under
465 such contract or policy, for the purpose and with the intent of
466 effecting settlement of such claims, loss, or damage under such
467 contract or policy on less favorable terms than those provided
468 in, and contemplated by, such contract or policy;
469 3. Committing or performing with such frequency as to
470 indicate a general business practice any of the following:
471 a. Failing to adopt and implement standards for the proper
472 investigation of claims;
473 b. Misrepresenting pertinent facts or insurance policy
474 provisions relating to coverages at issue;
475 c. Failing to acknowledge and act promptly upon
476 communications with respect to claims;
477 d. Denying claims without conducting reasonable
478 investigations based upon available information;
479 e. Failing to affirm or deny full or partial coverage of
480 claims, and, as to partial coverage, the dollar amount or extent
481 of coverage, or failing to provide a written statement that the
482 claim is being investigated, upon the written request of the
483 insured within 30 days after proof-of-loss statements have been
484 completed;
485 f. Failing to promptly provide a reasonable explanation in
486 writing to the insured of the basis in the insurance policy, in
487 relation to the facts or applicable law, for denial of a claim
488 or for the offer of a compromise settlement;
489 g. Failing to promptly notify the insured of any additional
490 information necessary for the processing of a claim;
491 h. Failing to clearly explain the nature of the requested
492 information and the reasons why such information is necessary;
493 or
494 i. Failing to pay personal injury protection insurance
495 claims within the time periods required by s. 627.736(4)(b). The
496 office may order the insurer to pay restitution to a
497 policyholder, medical provider, or other claimant, including
498 interest at a rate consistent with the amount set forth in s.
499 55.03(1), for the time period within which an insurer fails to
500 pay claims as required by law. Restitution is in addition to any
501 other penalties allowed by law, including, but not limited to,
502 the suspension of the insurer’s certificate of authority; or
503 j. Altering or amending an insurance adjuster’s report
504 without including on the report or as an addendum to the report
505 a detailed list of all changes made to the report and the
506 identity of the person who ordered each change. Any change that
507 has the effect of reducing the estimate of the loss must include
508 a detailed explanation why such change was made; or
509 4. Failing to pay undisputed amounts of partial or full
510 benefits owed under first-party property insurance policies
511 within 60 days after an insurer receives notice of a residential
512 property insurance claim, determines the amounts of partial or
513 full benefits, and agrees to coverage, unless payment of the
514 undisputed benefits is prevented by factors beyond the control
515 of the insurer as defined in s. 627.70131(5).
516 (w) Soliciting or accepting new or renewal insurance risks
517 or payment of certain bonuses by insolvent or impaired insurer
518 prohibited; penalty.—
519 1. Whether or not delinquency proceedings as to the insurer
520 have been or are to be initiated, but while such insolvency or
521 impairment exists, no director or officer of an insurer, except
522 with the written permission of the office, shall authorize or
523 permit the insurer to solicit or accept new or renewal insurance
524 risks in this state after such director or officer knew, or
525 reasonably should have known, that the insurer was insolvent or
526 impaired.
527 2. Regardless of whether delinquency proceedings as to the
528 insurer have been or are to be initiated, but while such
529 insolvency or impairment exists, a director or an officer of an
530 impaired insurer may not authorize or permit the insurer to pay
531 a bonus to any officer or director of the insurer.
532 3. As used in this paragraph, the term:
533 a. “Bonus” means a payment, in addition to an officer’s or
534 a director’s usual compensation, that is in addition to any
535 amounts contracted for or otherwise legally due.
536 b. “Impaired” includes impairment of capital or surplus, as
537 defined in s. 631.011(12) and (13).
538 4.2. Any such director or officer, upon conviction of a
539 violation of this paragraph, commits is guilty of a felony of
540 the third degree, punishable as provided in s. 775.082, s.
541 775.083, or s. 775.084.
542 Section 12. Section 626.9743, Florida Statutes, is amended
543 to read:
544 626.9743 Claim settlement practices relating to motor
545 vehicle insurance.—
546 (1) This section shall apply to the adjustment and
547 settlement of first- and third-party personal and commercial
548 motor vehicle insurance claims.
549 (2)(a) Upon an insurer’s receiving a communication with
550 respect to a claim, the insurer shall within 7 calendar days
551 review and acknowledge receipt of such communication unless
552 payment is made within that period of time or unless the failure
553 to acknowledge is caused by factors beyond the control of the
554 insurer. If the acknowledgment is not in writing, a notification
555 indicating acknowledgement must be made in the insurer’s claim
556 file and dated. A communication made to or by a representative
557 of an insurer with respect to a claim constitutes communication
558 to or by the insurer.
559 (b) Such acknowledgment must be responsive to the
560 communication. If the communication constitutes notification of
561 a claim, unless the acknowledgment reasonably advises the
562 claimant that the claim appears not to be covered by the
563 insurer, the acknowledgment must provide necessary claim forms
564 and instructions, including an appropriate telephone number.
565 (3)(a) Unless otherwise provided by the policy of insurance
566 or by law, within 7 days after an insurer receives proof-of-loss
567 statements, the insurer shall begin such investigation as is
568 reasonably necessary unless the failure to begin such
569 investigation is caused by factors beyond the control of the
570 insurer.
571 (b) If such investigation involves a physical inspection of
572 the motor vehicle, the licensed adjuster assigned by the insurer
573 must provide the policyholder with a printed or electronic
574 document containing his or her name and state adjuster license
575 number. An insurer must conduct any such physical inspection
576 within 7 days after its receipt of the proof-of-loss statements.
577 (c) Any subsequent communication with the policyholder
578 regarding the claim must also include the name and license
579 number of the adjuster communicating about the claim.
580 Communication of the adjuster’s name and license number may be
581 included with other information provided to the policyholder.
582 (d) An insurer may use electronic methods to investigate
583 the loss. Such electronic methods may include any method that
584 provides the insurer with clear color pictures or video
585 documenting the loss, including, but not limited to, electronic
586 photographs or video recordings of the loss and video
587 conferencing between the adjuster and the policyholder which
588 includes video recording of the loss. The insurer may also allow
589 the policyholder to use such methods to assist in the
590 investigation of the loss. An insurer may void the insurance
591 policy if the policyholder or any other person at the direction
592 of the policyholder, with intent to injure, defraud, or deceive
593 any insurer, commits insurance fraud by providing false,
594 incomplete, or misleading information concerning any fact or
595 thing material to a claim using electronic methods. The use of
596 electronic methods to investigate the loss does not prohibit an
597 insurer from assigning a licensed adjuster to physically inspect
598 the motor vehicle.
599 (e) The insurer must send the policyholder a copy of any
600 detailed estimate of the amount of the loss within 7 days after
601 the estimate is generated by the insurer’s adjuster. This
602 paragraph does not require that an insurer create a detailed
603 estimate of the amount of the loss if such estimate is not
604 reasonably necessary as part of the claim investigation.
605 (4) An insurer shall maintain:
606 (a) A record or log of each adjuster who communicates with
607 the policyholder as provided in paragraphs (3)(b) and (c) and
608 provide a list of such adjusters to the insured, the office, or
609 the department upon request.
610 (b) Claim records, including dates of:
611 1. Any claim-related communication made between the insurer
612 and the policyholder or the policyholder’s representative;
613 2. The insurer’s receipt of the policyholder’s proof of
614 loss statement;
615 3. Any claim-related request for information made by the
616 insurer to the policyholder or the policyholder’s
617 representative;
618 4. Any claim-related inspections of the property made by
619 the insurer, including physical inspections and inspections made
620 by electronic means;
621 5. Any detailed estimate of the amount of the loss
622 generated by the insurer’s adjuster;
623 6. The beginning and end of any tolling period provided for
624 in subsection (8); and
625 7. The insurer’s payment or denial of the claim.
626 (5) For purposes of this section, the term:
627 (a) “Factors beyond the control of the insurer” means:
628 1. Any of the following events which is the basis for the
629 office issuing an order finding that such event renders all or
630 specified residential property insurers reasonably unable to
631 meet the requirements of this section in specified locations,
632 and ordering that such insurer or insurers may have additional
633 time as specified by the office to comply with the requirements
634 of this section: a state of emergency declared by the Governor
635 under s. 252.36, a breach of security that must be reported
636 under s. 501.171(3), or an information technology issue. The
637 office may not extend the period for payment or denial of a
638 claim for more than 30 additional days.
639 2. Actions by the policyholder or the policyholder’s
640 representative which constitute fraud, lack of cooperation, or
641 intentional misrepresentation regarding the claim for which
642 benefits are owed when such actions reasonably prevent the
643 insurer from complying with any requirement of this section.
644 (b) “Insurer” means any motor vehicle insurer.
645 (6)(a) When providing a preliminary or partial estimate of
646 damage regarding a claim, an insurer shall include with the
647 estimate the following statement printed in at least 12-point
648 bold, uppercase type: “THIS ESTIMATE REPRESENTS OUR CURRENT
649 EVALUATION OF THE COVERED DAMAGES TO YOUR INSURED PROPERTY AND
650 MAY BE REVISED AS WE CONTINUE TO EVALUATE YOUR CLAIM. IF YOU
651 HAVE QUESTIONS, CONCERNS, OR ADDITIONAL INFORMATION REGARDING
652 YOUR CLAIM, WE ENCOURAGE YOU TO CONTACT US.”
653 (b) When providing a payment on a claim which is not the
654 full and final payment for the claim, an insurer shall include
655 with the payment the following statement printed in at least 12
656 point bold, uppercase type: “WE ARE CONTINUING TO EVALUATE YOUR
657 CLAIM INVOLVING YOUR INSURED PROPERTY AND MAY ISSUE ADDITIONAL
658 PAYMENTS. IF YOU HAVE QUESTIONS, CONCERNS, OR ADDITIONAL
659 INFORMATION REGARDING YOUR CLAIM, WE ENCOURAGE YOU TO CONTACT
660 US.”
661 (7) Within 60 days after an insurer receives notice of an
662 initial or supplemental motor vehicle claim from a first- or
663 third-party claimant, the insurer shall pay or deny such claim
664 or a portion of the claim unless the failure to pay is caused by
665 factors beyond the control of the insurer. The insurer shall
666 provide a reasonable explanation in writing to the policyholder
667 of the basis in the insurance policy, in relation to the facts
668 or applicable law, for the payment, denial, or partial denial of
669 a claim. If the insurer’s claim payment is less than specified
670 in any insurer’s detailed estimate of the amount of the loss,
671 the insurer must provide a reasonable explanation in writing of
672 the difference to the policyholder. Any payment of an initial or
673 supplemental claim or portion of such claim made 60 days after
674 the insurer receives notice of the claim, or made after the
675 expiration of any additional timeframe provided to pay or deny a
676 claim or a portion of a claim made pursuant to an order of the
677 office finding factors beyond the control of the insurer,
678 whichever is later, bears interest at the rate set forth in s.
679 55.03. Interest begins to accrue from the date the insurer
680 receives notice of the claim. This subsection may not be waived,
681 voided, or nullified by the terms of the insurance policy. If
682 there is a right to prejudgment interest, the insured must
683 select whether to receive prejudgment interest or interest under
684 this subsection. Interest is payable when the claim or portion
685 of the claim is paid. Failure to comply with this subsection
686 constitutes a violation of this code. However, failure to comply
687 with this subsection does not form the sole basis for a private
688 cause of action.
689 (8) The requirements of this section are tolled:
690 (a) During the pendency of any mediation proceeding under
691 s. 627.745 or any alternative dispute resolution proceeding
692 provided for in the insurance contract. The tolling period ends
693 upon the end of the mediation or alternative dispute resolution
694 proceeding.
695 (b) Upon the failure of a policyholder or a representative
696 of the policyholder to provide material claims information
697 requested by the insurer within 10 days after the request was
698 received. The tolling period ends upon the insurer’s receipt of
699 the requested information. Tolling under this paragraph applies
700 only to requests sent by the insurer to the policyholder or a
701 representative of the policyholder at least 15 days before the
702 insurer is required to pay or deny the claim or a portion of the
703 claim under subsection (7).
704 (9) This section also applies to surplus lines insurers and
705 surplus lines insurance authorized under ss. 626.913-626.937
706 providing motor vehicle coverage.
707 (10)(2) An insurer may not, when liability and damages owed
708 under the policy are reasonably clear, recommend that a third
709 party claimant make a claim under his or her own policy solely
710 to avoid paying the claim under the policy issued by that
711 insurer. However, the insurer may identify options to a third
712 party claimant relative to the repair of his or her vehicle.
713 (11)(3) An insurer that elects to repair a motor vehicle
714 and specifically requires a particular repair shop for vehicle
715 repairs shall cause the damaged vehicle to be restored to its
716 physical condition as to performance and appearance immediately
717 prior to the loss at no additional cost to the insured or third
718 party claimant other than as stated in the policy.
719 (12)(4) An insurer may not require the use of replacement
720 parts in the repair of a motor vehicle which are not at least
721 equivalent in kind and quality to the damaged parts prior to the
722 loss in terms of fit, appearance, and performance.
723 (13)(5) When the insurance policy provides for the
724 adjustment and settlement of first-party motor vehicle total
725 losses on the basis of actual cash value or replacement with
726 another of like kind and quality, the insurer shall use one of
727 the following methods:
728 (a) The insurer may elect a cash settlement based upon the
729 actual cost to purchase a comparable motor vehicle, including
730 sales tax, if applicable pursuant to subsection (17) (9). Such
731 cost may be derived from:
732 1. When comparable motor vehicles are available in the
733 local market area, the cost of two or more such comparable motor
734 vehicles available within the preceding 90 days;
735 2. The retail cost as determined from a generally
736 recognized used motor vehicle industry source such as:
737 a. An electronic database if the pertinent portions of the
738 valuation documents generated by the database are provided by
739 the insurer to the first-party insured upon request; or
740 b. A guidebook that is generally available to the general
741 public if the insurer identifies the guidebook used as the basis
742 for the retail cost to the first-party insured upon request; or
743 3. The retail cost using two or more quotations obtained by
744 the insurer from two or more licensed dealers in the local
745 market area.
746 (b) The insurer may elect to offer a replacement motor
747 vehicle that is a specified comparable motor vehicle available
748 to the insured, including sales tax if applicable pursuant to
749 subsection (17) (9), paid for by the insurer at no cost other
750 than any deductible provided in the policy and betterment as
751 provided in subsection (14) (6). The offer must be documented in
752 the insurer’s claim file. For purposes of this subsection, a
753 comparable motor vehicle is one that is made by the same
754 manufacturer, of the same or newer model year, and of similar
755 body type and that has similar options and mileage as the
756 insured vehicle. Additionally, a comparable motor vehicle must
757 be in as good or better overall condition than the insured
758 vehicle and available for inspection within a reasonable
759 distance of the insured’s residence.
760 (c) When a motor vehicle total loss is adjusted or settled
761 on a basis that varies from the methods described in paragraph
762 (a) or paragraph (b), the determination of value must be
763 supported by documentation, and any deductions from value must
764 be itemized and specified in appropriate dollar amounts. The
765 basis for such settlement shall be explained to the claimant in
766 writing, if requested, and a copy of the explanation shall be
767 retained in the insurer’s claim file.
768 (d) Any other method agreed to by the claimant.
769 (14)(6) When the amount offered in settlement reflects a
770 reduction by the insurer because of betterment or depreciation,
771 information pertaining to the reduction shall be maintained with
772 the insurer’s claim file. Deductions shall be itemized and
773 specific as to dollar amount and shall accurately reflect the
774 value assigned to the betterment or depreciation. The basis for
775 any deduction shall be explained to the claimant in writing, if
776 requested, and a copy of the explanation shall be maintained
777 with the insurer’s claim file.
778 (15)(7) Every insurer shall, if partial losses are settled
779 on the basis of a written estimate prepared by or for the
780 insurer, supply the insured a copy of the estimate upon which
781 the settlement is based.
782 (16)(8) Every insurer shall provide notice to an insured
783 before termination of payment for previously authorized storage
784 charges, and the notice shall provide 72 hours for the insured
785 to remove the vehicle from storage before terminating payment of
786 the storage charges.
787 (17)(9) If sales tax will necessarily be incurred by a
788 claimant upon replacement of a total loss or upon repair of a
789 partial loss, the insurer may defer payment of the sales tax
790 unless and until the obligation has actually been incurred.
791 (18)(10) Nothing in this section shall be construed to
792 authorize or preclude enforcement of policy provisions relating
793 to settlement disputes.
794 Section 13. Subsection (6) of section 626.989, Florida
795 Statutes, is amended, and subsection (10) is added to that
796 section, to read:
797 626.989 Investigation by department or Division of
798 Investigative and Forensic Services; compliance; immunity;
799 confidential information; reports to division; division
800 investigator’s power of arrest.—
801 (6)(a) Any person, other than an insurer, agent, or other
802 person licensed under the code, or an employee thereof, having
803 knowledge or who believes that a fraudulent insurance act or any
804 other act or practice which, upon conviction, constitutes a
805 felony or a misdemeanor under the code, or under s. 817.234, is
806 being or has been committed may send to the Division of
807 Investigative and Forensic Services a report or information
808 pertinent to such knowledge or belief and such additional
809 information relative thereto as the department may request. Any
810 professional practitioner licensed or regulated by the
811 Department of Business and Professional Regulation, except as
812 otherwise provided by law, any medical review committee as
813 defined in s. 766.101, any private medical review committee, and
814 any insurer, agent, or other person licensed under the code, or
815 an employee thereof, having knowledge or who believes that a
816 fraudulent insurance act or any other act or practice which,
817 upon conviction, constitutes a felony or a misdemeanor under the
818 code, or under s. 817.234, is being or has been committed shall
819 send to the Division of Investigative and Forensic Services a
820 report or information pertinent to such knowledge or belief and
821 such additional information relative thereto as the department
822 may require.
823 (b) The Division of Investigative and Forensic Services
824 shall review such information or reports and select such
825 information or reports as, in its judgment, may require further
826 investigation. It shall then cause an independent examination of
827 the facts surrounding such information or report to be made to
828 determine the extent, if any, to which a fraudulent insurance
829 act or any other act or practice which, upon conviction,
830 constitutes a felony or a misdemeanor under the code, or under
831 s. 817.234, is being committed.
832 (c) The Division of Investigative and Forensic Services
833 shall report any alleged violations of law which its
834 investigations disclose to the appropriate licensing agency and
835 state attorney or other prosecuting agency having jurisdiction,
836 including, but not limited to, the statewide prosecutor for
837 crimes that impact two or more judicial circuits in this state,
838 with respect to any such violation, as provided in s. 624.310.
839 If prosecution by the state attorney or other prosecuting agency
840 having jurisdiction with respect to such violation is not begun
841 within 60 days of the division’s report, the state attorney or
842 other prosecuting agency having jurisdiction with respect to
843 such violation shall inform the division of the reasons for the
844 lack of prosecution.
845 (10) The Division of Investigative and Forensic Services
846 Bureau of Insurance Fraud shall prepare and submit a performance
847 report to the President of the Senate and the Speaker of the
848 House of Representatives by January 1 of each year. The annual
849 report must include, but need not be limited to:
850 (a) The total number of initial referrals received, cases
851 opened, cases presented for prosecution, cases closed, and
852 convictions resulting from cases presented for prosecution by
853 the Bureau of Insurance Fraud, by type of insurance fraud and
854 circuit.
855 (b) The number of referrals received from insurers, the
856 office, and the Division of Consumer Services of the department,
857 and the outcome of those referrals.
858 (c) The number of investigations undertaken by the Bureau
859 of Insurance Fraud which were not the result of a referral from
860 an insurer and the outcome of those referrals.
861 (d) The number of investigations that resulted in a
862 referral to a regulatory agency and the disposition of those
863 referrals.
864 (e) The number of cases presented by the Bureau of
865 Insurance Fraud which local prosecutors or the statewide
866 prosecutor declined to prosecute and the reasons provided for
867 declining prosecution.
868 (f) A summary of the annual report required under s.
869 626.9896.
870 (g) The total number of employees assigned to the Bureau of
871 Insurance Fraud, delineated by location of staff assigned; and
872 the number and location of employees assigned to the Bureau of
873 Insurance Fraud who were assigned to work other types of fraud
874 cases.
875 (h) The average caseload and turnaround time by type of
876 case for each investigator.
877 (i) The training provided during the year to insurance
878 fraud investigators.
879 Section 14. Subsections (1), (3), and (4) of section
880 627.0629, Florida Statutes, are amended to read:
881 627.0629 Residential property insurance; rate filings.—
882 (1) It is the intent of the Legislature that insurers
883 provide savings to consumers who install or implement windstorm
884 damage mitigation techniques, alterations, or solutions to their
885 properties to prevent windstorm losses. A rate filing for
886 residential property insurance must include actuarially
887 reasonable discounts, credits, or other rate differentials, or
888 appropriate reductions in deductibles, for properties on which
889 fixtures or construction techniques demonstrated to reduce the
890 amount of loss in a windstorm have been installed or
891 implemented. The fixtures or construction techniques must
892 include, but are not limited to, fixtures or construction
893 techniques that enhance roof strength, roof covering
894 performance, roof-to-wall strength, wall-to-floor-to-foundation
895 strength, opening protection, and window, door, and skylight
896 strength. Credits, discounts, or other rate differentials, or
897 appropriate reductions in deductibles, for fixtures and
898 construction techniques that meet the minimum requirements of
899 the Florida Building Code must be included in the rate filing.
900 The office shall determine the discounts, credits, other rate
901 differentials, and appropriate reductions in deductibles that
902 reflect the full actuarial value of such revaluation, which may
903 be used by insurers in rate filings. Effective July 1, 2023,
904 each insurer subject to the requirements of this section must
905 provide information on the insurer’s website describing the
906 hurricane mitigation discounts available to policyholders. Such
907 information must be accessible on, or through a hyperlink
908 located on, the home page of the insurer’s website or the
909 primary page of the insurer’s website for property insurance
910 policyholders or applicants for such coverage in this state. On
911 or before January 1, 2025, and every 5 years thereafter, the
912 office shall reevaluate and update the fixtures or construction
913 techniques demonstrated to reduce the amount of loss in a
914 windstorm and the discounts, credits, other rate differentials,
915 and appropriate reductions in deductibles that reflect the full
916 actuarial value of such fixtures or construction techniques. The
917 office shall adopt rules and forms necessitated by such
918 reevaluation.
919 (3) A rate filing made on or after July 1, 1995, for mobile
920 home owner insurance must include appropriate discounts,
921 credits, or other rate differentials for mobile homes
922 constructed to comply with American Society of Civil Engineers
923 Standard ANSI/ASCE 7-88, adopted by the United States Department
924 of Housing and Urban Development on July 13, 1994, and that also
925 comply with all applicable tie-down requirements provided by
926 state law.
927 (4) The Legislature finds that separate consideration and
928 notice of hurricane insurance premiums will assist consumers by
929 providing greater assurance that hurricane premiums are lawful
930 and by providing more complete information regarding the
931 components of property insurance premiums. Effective January 1,
932 1997, A rate filing for residential property insurance shall be
933 separated into two components, rates for hurricane coverage and
934 rates for all other coverages. A premium notice reflecting a
935 rate implemented on the basis of such a filing shall separately
936 indicate the premium for hurricane coverage and the premium for
937 all other coverages.
938 Section 15. Paragraph (ll) is added to subsection (6) of
939 section 627.351, Florida Statutes, to read:
940 627.351 Insurance risk apportionment plans.—
941 (6) CITIZENS PROPERTY INSURANCE CORPORATION.—
942 (ll) The corporation may not determine that a risk is
943 ineligible for coverage with the corporation solely because such
944 risk has unrepaired damage caused by a covered loss that is the
945 subject of a claim that has been filed with the Florida
946 Insurance Guaranty Association.
947 Section 16. Subsection (4) of section 627.410, Florida
948 Statutes, is amended to read:
949 627.410 Filing, approval of forms.—
950 (4) The office may, by order, exempt from the requirements
951 of this section for so long as it deems proper any insurance
952 document or form or type thereof as specified in such order, to
953 which, in its opinion, this section may not practicably be
954 applied, or the filing and approval of which are, in its
955 opinion, not desirable or necessary for the protection of the
956 public. The office may not exempt from the requirements of this
957 section the insurance documents or forms of any insurer, against
958 whom the office enters a final order determining that such
959 insurer violated any provision of this code, for a period of 36
960 months after the date of such order.
961 Section 17. Section 627.4108, Florida Statutes, is created
962 to read:
963 627.4108 Submission of claims-handling manuals;
964 attestation.—
965 (1) This section is intended to ensure that insurers are
966 able to properly handle insurance claims, particularly during
967 natural disasters, catastrophes, and other emergencies.
968 (2) Each authorized insurer and eligible surplus lines
969 insurer conducting business in this state shall submit any and
970 all claims-handling manuals to the office:
971 (a) On or before August 1, 2023;
972 (b) Annually thereafter, on or before May 1 of each
973 calendar year; and
974 (c) Within 30 days after any updates or amendments to such
975 manual.
976 (3) The insurer shall include with each such submission an
977 attestation on a form prescribed by the commission, stating
978 that:
979 (a) The insurer’s claims-handling manual complies with the
980 requirements of this code and comports to usual and customary
981 industry claims-handling practices; and
982 (b) The insurer maintains adequate resources available to
983 implement the requirements of its claims-handling manual at all
984 times, including during extreme catastrophic events.
985 (4) The office may, as often as it deems necessary, conduct
986 market conduct examinations under s. 624.3161 of insurers to
987 ensure compliance with this section.
988 (5) The commission is authorized, and all conditions are
989 deemed met, to adopt emergency rules under s. 120.54(4), for the
990 purpose of implementing this section. Notwithstanding any other
991 law, emergency rules adopted under this section are effective
992 for 6 months after adoption and may be renewed during the
993 pendency of procedures to adopt permanent rules addressing the
994 subject of the emergency rules.
995 Section 18. Paragraph (d) of subsection (2) of section
996 627.4133, Florida Statutes, is amended to read:
997 627.4133 Notice of cancellation, nonrenewal, or renewal
998 premium.—
999 (2) With respect to any personal lines or commercial
1000 residential property insurance policy, including, but not
1001 limited to, any homeowner, mobile home owner, farmowner,
1002 condominium association, condominium unit owner, apartment
1003 building, or other policy covering a residential structure or
1004 its contents:
1005 (d)1. Upon a declaration of an emergency pursuant to s.
1006 252.36 and the filing of an order by the Commissioner of
1007 Insurance Regulation, An authorized insurer or surplus lines
1008 insurer may not cancel or nonrenew a personal residential or
1009 commercial residential property insurance policy covering a
1010 dwelling or residential property located in this state:
1011 a. For a period of 90 days after the dwelling or
1012 residential property has been repaired, if such property which
1013 has been damaged as a result of a hurricane or wind loss that is
1014 the subject of the declaration of emergency pursuant to s.
1015 252.36 and the filing of an order by the Commissioner of
1016 Insurance Regulation for a period of 90 days after the dwelling
1017 or residential property has been repaired. A structure is deemed
1018 to be repaired when substantially completed and restored to the
1019 extent that it is insurable by another authorized insurer that
1020 is writing policies in this state.
1021 b. Until the dwelling or residential property has been
1022 repaired, if such property was damaged by any covered peril and
1023 the provisions of sub-subparagraph a. do not apply.
1024 2. However, an insurer or agent may cancel or nonrenew such
1025 a policy prior to the repair of the dwelling or residential
1026 property:
1027 a. Upon 10 days’ notice for nonpayment of premium; or
1028 b. Upon 45 days’ notice:
1029 (I) For a material misstatement or fraud related to the
1030 claim;
1031 (II) If the insurer determines that the insured has
1032 unreasonably caused a delay in the repair of the dwelling; or
1033 (III) If the insurer has paid policy limits.
1034 3. If the insurer elects to nonrenew a policy covering a
1035 property that has been damaged, the insurer shall provide at
1036 least 90 days’ notice to the insured that the insurer intends to
1037 nonrenew the policy 90 days after the dwelling or residential
1038 property has been repaired. Nothing in this paragraph shall
1039 prevent the insurer from canceling or nonrenewing the policy 90
1040 days after the repairs are complete for the same reasons the
1041 insurer would otherwise have canceled or nonrenewed the policy
1042 but for the limitations of subparagraph 1. The Financial
1043 Services Commission may adopt rules, and the Commissioner of
1044 Insurance Regulation may issue orders, necessary to implement
1045 this paragraph.
1046 4. This paragraph shall also apply to personal residential
1047 and commercial residential policies covering property that was
1048 damaged as the result of Hurricane Ian or Hurricane Nicole
1049 Tropical Storm Bonnie, Hurricane Charley, Hurricane Frances,
1050 Hurricane Ivan, or Hurricane Jeanne.
1051 5. For purposes of this paragraph:
1052 a. A structure is deemed to be repaired when substantially
1053 completed and restored to the extent that it is insurable by
1054 another authorized insurer writing policies in this state.
1055 b. “Insurer” means an authorized insurer or an eligible
1056 surplus lines insurer.
1057 Section 19. Subsection (3) is added to section 627.426,
1058 Florida Statutes, to read:
1059 627.426 Claims administration.—
1060 (3)(a) The office shall ensure that each liability insurer,
1061 upon receiving actual notice of an incident or a loss that could
1062 give rise to a covered liability claim under an insurance
1063 policy:
1064 1. Assigns a duly licensed and appointed insurance adjuster
1065 to investigate the extent of the insured’s probable exposure and
1066 diligently attempts to resolve any questions concerning the
1067 existence or extent of the insured’s coverage.
1068 2. Based on available information, ethically evaluates
1069 every claim fairly, honestly, and with due regard for the
1070 interests of the insured; considers the extent of the claimant’s
1071 recoverable damages; and considers the information in a
1072 reasonable and prudent manner.
1073 3. Requests from the insured or claimant additional
1074 relevant information the insurer reasonably deems necessary to
1075 evaluate whether to settle a claim.
1076 4. Conducts all oral and written communications with the
1077 insured with the utmost honesty and complete candor.
1078 5. Makes reasonable efforts to explain to persons not
1079 represented by counsel matters requiring expertise beyond the
1080 level normally expected of a layperson with no training in
1081 insurance or claims-handling issues.
1082 6. Retains all written communications and notes and retains
1083 a summary of all verbal communications in a reasonable manner
1084 for a period of not less than 5 years after the later of the
1085 entry of a judgment against the insured in excess of policy
1086 limits becomes final or the conclusion of the extracontractual
1087 claim, if any, including any related appeals.
1088 7. Provides the insured, upon request, with all
1089 communications related to the insurer’s handling of the claim
1090 which are not privileged as to the insured.
1091 8. Provides, at the insurer’s expense, reasonable
1092 accommodations necessary to communicate effectively with an
1093 insured covered under the Americans with Disabilities Act.
1094 9. In handling third-party claims, communicates to an
1095 insured all of the following:
1096 a. The identity of any other person or entity the insurer
1097 has reason to believe may be liable.
1098 b. The insurer’s evaluation of the claim.
1099 c. The likelihood and possible extent of an excess
1100 judgment.
1101 d. Steps the insured can take to avoid exposure to an
1102 excess judgment, including the right to secure personal counsel
1103 at the insured’s expense.
1104 e. The insured’s duty to cooperate with the insurer,
1105 including any specific requests required because of a settlement
1106 opportunity or by the insurer in accordance with the policy, the
1107 purpose of the required cooperation, and the consequences of
1108 refusing to cooperate; and any settlement demands or offers.
1109 10. If, after the expiration of the safe harbor periods in
1110 s. 624.155(4) or (6), as applicable, the facts available to the
1111 insurer indicate that the insured’s liability is likely to
1112 exceed the policy limits, initiates settlement negotiations by
1113 tendering its policy limits to the claimant in exchange for a
1114 general release of the insured.
1115 11. Gives fair consideration to a settlement offer that is
1116 not unreasonable under the facts available to the insurer and
1117 settle, if possible, when a reasonably prudent person, faced
1118 with the prospect of paying the total probable exposure of the
1119 insured, would do so. The insurer shall provide reasonable
1120 assistance to the insured to comply with the insured’s
1121 obligations to cooperate and act reasonably to attempt to
1122 satisfy any conditions of a claimant’s settlement offer. If it
1123 is not possible to settle a liability claim within the available
1124 policy limits, the insurer shall act reasonably to attempt to
1125 minimize the excess exposure to the insured.
1126 12. When multiple claims arise out of a single occurrence,
1127 the combined value of all claims exceeds the total of all
1128 applicable policy limits, and the claimants are unwilling to
1129 globally settle within the policy limits, thereafter attempts to
1130 minimize the magnitude of possible excess judgments against the
1131 insured. The insurer is entitled to great discretion to decide
1132 how much to offer each respective claimant in its attempt to
1133 protect the insured. The insurer may, in its effort to minimize
1134 the excess liability of the insured, use its discretion to offer
1135 the full available policy limits to one or more claimants to the
1136 exclusion of other claimants and may leave the insured exposed
1137 to some liability after all the policy limits are paid. An
1138 insurer does not violate this section simply because it is
1139 unable to settle all claims in a multiple claimant case.
1140 13. When a loss creates the potential for a third-party
1141 claim against more than one insured, attempts to settle the
1142 claim on behalf of all insureds against whom a claim may be
1143 presented. If it is not possible to settle on behalf of all
1144 insureds, the insurer, in consultation with the insureds, must
1145 attempt to enter into reasonable settlements of claims against
1146 certain insureds to the exclusion of other insureds.
1147 14. Responds to any request for insurance information in
1148 compliance with s. 626.9372 or s. 627.4137, as applicable.
1149 15. Where it appears the insured’s probable exposure is
1150 greater than policy limits, takes reasonable measures to
1151 preserve, for a reasonable period of time, evidence that is
1152 needed for the defense of the liability claim.
1153 16. Complies with s. 627.426, if applicable.
1154 17. Complies with any provision of the Unfair Insurance
1155 Trade Practices Act.
1156 (b) Violations of this section constitute violations of the
1157 Florida Insurance Code and are subject to any applicable
1158 enforcement provisions therein.
1159 Section 20. Paragraph (a) of subsection (10) of section
1160 627.701, Florida Statutes, is amended to read:
1161 627.701 Liability of insureds; coinsurance; deductibles.—
1162 (10)(a) Notwithstanding any other provision of law, an
1163 insurer issuing a personal lines residential property insurance
1164 policy may include in such policy a separate roof deductible
1165 that meets all of the following requirements:
1166 1. The insurer has complied with the offer requirements
1167 under subsection (7) regarding a deductible applicable to losses
1168 from perils other than a hurricane.
1169 2. The roof deductible may not exceed the lesser of 2
1170 percent of the Coverage A limit of the policy or 50 percent of
1171 the cost to replace the roof.
1172 3. The premium that a policyholder is charged for the
1173 policy includes an actuarially sound credit or premium discount
1174 for the roof deductible.
1175 4. The roof deductible applies only to a claim adjusted on
1176 a replacement cost basis.
1177 5. The roof deductible does not apply to any of the
1178 following events:
1179 a. A total loss to a primary structure in accordance with
1180 the valued policy law under s. 627.702 which is caused by a
1181 covered peril.
1182 b. A roof loss resulting from a hurricane as defined in s.
1183 627.4025(2)(c).
1184 c. A roof loss resulting from a tree fall or other hazard
1185 that damages the roof and punctures the roof deck.
1186 d. A roof loss requiring the repair of less than 50 percent
1187 of the roof.
1188
1189 If a roof deductible is applied, no other deductible under the
1190 policy may be applied to the loss or to any other loss to the
1191 property caused by the same covered peril.
1192 Section 21. Subsection (2) of section 627.70132, Florida
1193 Statutes, is amended to read:
1194 627.70132 Notice of property insurance claim.—
1195 (2) A claim or reopened claim, but not a supplemental
1196 claim, under an insurance policy that provides property
1197 insurance, as defined in s. 624.604, including a property
1198 insurance policy issued by an eligible surplus lines insurer,
1199 for loss or damage caused by any peril is barred unless notice
1200 of the claim was given to the insurer in accordance with the
1201 terms of the policy within 1 year after the date of loss. A
1202 supplemental claim is barred unless notice of the supplemental
1203 claim was given to the insurer in accordance with the terms of
1204 the policy within 18 months after the date of loss. The time
1205 limitations of this subsection are tolled during any term of
1206 federal or state active duty which materially affects the
1207 ability of a servicemember as defined in s. 250.01 to file a
1208 claim, supplemental claim, or reopened claim.
1209 Section 22. Section 627.7019, Florida Statutes, is amended
1210 to read:
1211 627.7019 Standardization of requirements applicable to
1212 insurers after natural disasters.—
1213 (1) The commission shall adopt by rule, pursuant to s.
1214 120.54(1)-(3), standardized requirements that may be applied to
1215 insurers and surplus lines insurers as a consequence of a
1216 hurricane or other natural disaster. The rules shall address the
1217 following areas:
1218 (a) Claims reporting requirements.
1219 (b) Grace periods for payment of premiums and performance
1220 of other duties by insureds.
1221 (c) Temporary postponement of cancellations and
1222 nonrenewals.
1223 (2) The rules adopted under this section shall require the
1224 office to issue an order within 72 hours after the occurrence of
1225 a hurricane or other natural disaster specifying, by line of
1226 insurance, which of the standardized requirements apply, the
1227 geographic areas in which they apply, the time at which
1228 applicability commences, and the time at which applicability
1229 terminates.
1230 (3) Any emergency rule adopted under s. 120.54(4) which is
1231 in conflict with any provision of the rules adopted under this
1232 section must be by unanimous vote of the commission.
1233 Section 23. Section 627.782, Florida Statutes, is amended
1234 to read:
1235 627.782 Adoption of rates.—
1236 (1) Rates for title insurance are subject to the rating
1237 provisions of this section. Title insurers shall file with the
1238 office under the procedures set forth in s. 627.062(2)(a)1. or
1239 2. rates, rating schedules, rating manuals, premium credits or
1240 discount schedules, and surcharge schedules, and changes
1241 thereto, code, the commission must adopt a rule specifying the
1242 premium to be charged in this state by title insurers for the
1243 respective types of title insurance contracts and, for policies
1244 issued through agents or agencies, the percentage of such
1245 premium required to be retained by the title insurer which shall
1246 not be less than 30 percent. However, in a transaction subject
1247 to the Real Estate Settlement Procedures Act of 1974, 12 U.S.C.
1248 ss. 2601 et seq., as amended, no portion of the premium
1249 attributable to providing a primary title service shall be paid
1250 to or retained by any person who does not actually perform or is
1251 not liable for the performance of such service.
1252 (2) In reviewing adopting premium rates, the office
1253 commission must give due consideration to the following:
1254 (a) The title insurers’ loss experience and prospective
1255 loss experience under closing protection letters and policy
1256 liabilities.
1257 (b) A reasonable margin for underwriting profit and
1258 contingencies, including contingent liability under s. 627.7865,
1259 sufficient to allow title insurers, agents, and agencies to earn
1260 a rate of return on their capital that will attract and retain
1261 adequate capital investment in the title insurance business and
1262 maintain an efficient title insurance delivery system.
1263 (c) Past expenses and prospective expenses for
1264 administration and handling of risks.
1265 (d) Liability for defalcation.
1266 (e) Other relevant factors.
1267 (3) Rates may be grouped by classification or schedule and
1268 may differ as to class of risk assumed.
1269 (4) Rates may not be excessive, inadequate, or unfairly
1270 discriminatory.
1271 (5) The premium applies to each $100 of insurance issued to
1272 an insured.
1273 (6) The premium rates apply throughout this state.
1274 (7) The commission shall, in accordance with the standards
1275 provided in subsection (2), review the premium as needed, but
1276 not less frequently than once every 3 years, and shall, based
1277 upon the review required by this subsection, revise the premium
1278 if the results of the review so warrant.
1279 (8) Each title insurance agency and insurer licensed to do
1280 business in this state and each insurer’s direct or retail
1281 business in this state shall maintain and submit information,
1282 including revenue, loss, and expense data, as the office
1283 determines necessary to assist in the analysis of title
1284 insurance premium rates, title search costs, and the condition
1285 of the title insurance industry in this state. Such information
1286 shall be transmitted to the office annually by May 31 of the
1287 year after the reporting year. The commission shall adopt rules
1288 relating to the collection and analysis of the data from the
1289 title insurance industry.
1290 Section 24. Chapter 2022-271, Laws of Florida, shall not be
1291 construed to impair any right under an insurance contract in
1292 effect on or before the effective date of that chapter law. To
1293 the extent that chapter 2022-271, Laws of Florida, affects a
1294 right under an insurance contract, that chapter law applies to
1295 an insurance contract issued or renewed after the effective date
1296 of that chapter law. This section is intended to clarify
1297 existing law and is remedial in nature.
1298 Section 25. (1) Every residential property insurer and
1299 every motor vehicle insurer rate filing made or pending with the
1300 Office of Insurance Regulation on or after July 1, 2023, must
1301 reflect the savings or reduction in claim frequency, claim
1302 severity, and loss adjustment expenses, including for attorney
1303 fees, payment of attorney fees to claimants, and any other
1304 reduction actuarially indicated, due to the combined effect of
1305 the applicable provisions of chapters 2021-77, 2022-268, 2022
1306 271, and 2023-15, Laws of Florida, in order to provide rate
1307 relief to policyholders as soon as practicable.
1308 (2) The Office of Insurance Regulation must consider in its
1309 review of such rate filings the savings or reduction in claim
1310 frequency, claim severity, and loss adjustment expenses,
1311 including for attorney fees, payment of attorney fees to
1312 claimants, and any other reduction actuarially indicated, due to
1313 the combined effect of the applicable provisions of chapters
1314 2021-77, 2022-268, 2022-271, and 2023-15, Laws of Florida. The
1315 office may develop a factor or factors using generally accepted
1316 actuarial techniques and standards to be used in its review of
1317 rate filings governed by this section. The office may contract
1318 with an appropriate vendor to advise the office in determining
1319 such factor or factors.
1320 (3) For the 2023-2024 fiscal year, the sum of $500,000 in
1321 nonrecurring funds is appropriated from the Insurance Regulatory
1322 Trust Fund in the Department of Financial Services to the Office
1323 of Insurance Regulation to implement this section.
1324 Section 26. For the 2023-2024 fiscal year, five positions
1325 with associated salary rate of 325,000 and the sum of $494,774
1326 in recurring funds and $23,410 in nonrecurring funds is
1327 appropriated from the Insurance Regulatory Trust Fund to the
1328 Department of Financial Services to implement this act.
1329 Section 27. This act shall take effect July 1, 2023.