Florida Senate - 2024                                     SB 178
       By Senator Polsky
       30-00023-24                                            2024178__
    1                        A bill to be entitled                      
    2         An act relating to the resolution of disputed property
    3         insurance claims; amending s. 627.7015, F.S.;
    4         requiring, rather than authorizing, parties to a
    5         property insurance claims dispute to participate in
    6         mediation; providing that mediation is a condition
    7         precedent to commencing litigation; deleting
    8         provisions relating to the eligibility of claims for
    9         mediation; providing that the parties may mutually
   10         agree to conduct the mediation by teleconference or by
   11         telephone; requiring all insureds, or a representative
   12         thereof, to personally attend the mediation; revising
   13         and specifying duties as to bearing certain costs of
   14         mediation; requiring, rather than authorizing, the
   15         Department of Financial Services to adopt certain
   16         rules; authorizing the department to adopt certain
   17         emergency rules; requiring the policyholder to provide
   18         the insurer with certain documents within a certain
   19         timeframe after mediation is invoked; revising
   20         conditions under which a policyholder has a certain
   21         timeframe to rescind a settlement; revising the
   22         definition of the term “claim”; providing and revising
   23         construction; amending s. 627.7074, F.S.; conforming a
   24         provision to changes made by the act; providing an
   25         appropriation; providing effective dates.
   27  Be It Enacted by the Legislature of the State of Florida:
   29         Section 1. Section 627.7015, Florida Statutes, is amended
   30  to read:
   31         627.7015 Mandatory mediation Alternative procedure for
   32  resolution of disputed property insurance claims.—
   33         (1) This section sets forth a nonadversarial alternative
   34  dispute resolution procedure for a mediated claim resolution
   35  conference prompted by the need for effective, fair, and timely
   36  handling of property insurance claims. There is a particular
   37  need for an informal, nonthreatening forum for helping parties
   38  who elect this procedure to resolve their claims disputes
   39  because most homeowner and commercial residential insurance
   40  policies obligate policyholders to participate in a potentially
   41  expensive and time-consuming adversarial appraisal process
   42  before litigation. The procedure set forth in this section is
   43  designed to bring the parties together for a mediated claims
   44  settlement conference without any of the trappings or drawbacks
   45  of an adversarial process. Before resorting to these procedures,
   46  policyholders and insurers are encouraged to resolve claims as
   47  quickly and fairly as possible. This section applies is
   48  available with respect to claims under personal lines and
   49  commercial residential policies before commencing the appraisal
   50  process and is a condition precedent to, or before commencing
   51  litigation. Mediation may be requested only by the policyholder,
   52  as a first-party claimant, a third-party, as an assignee of the
   53  policy benefits, or the insurer. However, an insurer is not
   54  required to participate in any mediation requested by a third
   55  party assignee of the policy benefits. If requested by the
   56  policyholder, Participation by legal counsel is permitted.
   57  Mediation under this section is also required of available to
   58  litigants referred to the department by a county court or
   59  circuit court. This section does not apply to commercial
   60  coverages, to private passenger motor vehicle insurance
   61  coverages, or to disputes relating to liability coverages in
   62  policies of property insurance.
   63         (2) At the time of issuance and renewal of a policy or at
   64  the time a first-party claim within the scope of this section is
   65  filed by the policyholder, the insurer shall notify the
   66  policyholder of its right to participate in the mandatory
   67  mediation program under this section. A claim becomes eligible
   68  for mediation after the insurer complies with s. 627.70131(7) or
   69  elects to reinspect pursuant to s. 627.70152(4)(a)3. If the
   70  insurer has not complied with s. 627.70131(7) or elected to
   71  reinspect pursuant to s. 627.70152(4)(a)3. within 90 days after
   72  notice of the loss, the insurer may not require mediation under
   73  this section. This subsection does not impair the right of an
   74  insurance company to request mediation after a determination of
   75  coverage pursuant to this section or require appraisal or
   76  another method of alternative dispute resolution pursuant to s.
   77  627.70152(4)(b). The department shall prepare a consumer
   78  information pamphlet for distribution to persons participating
   79  in mediation.
   80         (3) If the parties mutually agree, mediation may be
   81  conducted by teleconference or by telephone in lieu of appearing
   82  in person. All named insureds, or a representative thereof, must
   83  personally attend the mediation, regardless of how it is
   84  conducted. The costs of mediation must be reasonable, and the
   85  insurer must bear all of the cost of conducting mediation
   86  conferences, except as otherwise provided in this section. If a
   87  named insured or his or her representative policyholder fails to
   88  appear at the conference, thus preventing the mediation from
   89  proceeding, the conference must be rescheduled upon the
   90  policyholder’s payment of the costs of a rescheduled conference.
   91  If the insurer fails to appear at the conference, the insurer
   92  must pay the policyholder’s actual cash expenses incurred in
   93  attending the conference if the insurer’s failure to attend was
   94  not due to a good cause acceptable to the department. An insurer
   95  is will be deemed to have failed to appear if the insurer’s
   96  representative lacks authority to settle the full value of the
   97  claim. The insurer shall incur an additional fee for a
   98  rescheduled conference necessitated by the insurer’s failure to
   99  appear at a scheduled conference. The fees assessed by the
  100  department must include a charge necessary to defray the
  101  expenses of the department related to its duties under this
  102  section and must be deposited in the Insurance Regulatory Trust
  103  Fund. The department may suspend the insurer’s authority to
  104  appoint licensees if the insurer does not timely pay the
  105  required fees. If a party elects to request an expert or a
  106  representative to attend the mediation, that party must bear any
  107  costs for the attendance of the expert or representative.
  108         (4) The department shall adopt by rule a property insurance
  109  mediation program to be administered by the department or its
  110  designee. The department shall may also adopt special rules that
  111  which are applicable in cases of an emergency within this the
  112  state, including emergency rules as necessary to establish
  113  physical addresses for the mediation program in areas affected
  114  by natural disasters. The rules shall be modeled after practices
  115  and procedures set forth in mediation rules of procedure adopted
  116  by the Supreme Court. The rules shall provide for:
  117         (a) Reasonable requirements requirement for processing and
  118  scheduling of requests for mediation.
  119         (b) Qualifications and, denial of application, suspension,
  120  revocation of approval, and other penalties for mediators as
  121  provided in s. 627.745 and the Florida Rules for Certified and
  122  Court-Appointed Mediators.
  123         (c) Provisions governing who may attend mediation
  124  conferences.
  125         (d) Selection of mediators.
  126         (e) Criteria for the conduct of mediation conferences.
  127         (f) Right to legal counsel.
  128         (5)(a) All statements made and documents produced at a
  129  mediation conference shall be deemed to be settlement
  130  negotiations in anticipation of litigation within the scope of
  131  s. 90.408. All parties to the mediation must negotiate in good
  132  faith and must have the authority to immediately settle the
  133  claim. Mediators are deemed to be agents of the department and
  134  shall have the immunity from suit provided in s. 44.107.
  135         (b)Within 10 days after mediation is invoked, the
  136  policyholder must provide to the insurer any supporting
  137  documents and information that serve as the basis for the claim.
  138         (6)(a) Mediation is nonbinding; however, if a written
  139  settlement is reached and the policyholder is not represented by
  140  an attorney or a public adjuster, the policyholder has 3
  141  business days within which the policyholder may rescind the
  142  settlement unless the policyholder has cashed or deposited any
  143  check or draft disbursed to the policyholder for the disputed
  144  matters as a result of the conference. If a settlement agreement
  145  is reached and is not rescinded, it is binding and acts as a
  146  release of all specific claims that were presented in that
  147  mediation conference.
  148         (b) At the conclusion of the mediation, the mediator shall
  149  provide a written report of the results of mediation, including
  150  any settlement amount, to the insurer, the policyholder, and the
  151  policyholder’s representative if the policyholder is represented
  152  at the mediation.
  153         (7) If the insurer fails to comply with subsection (2) by
  154  failing to notify a policyholder of its right to participate in
  155  the mediation program under this section or if the insurer
  156  requests the mediation, and the mediation results are rejected
  157  by either party, the policyholder is not required to submit to
  158  or participate in any contractual loss appraisal process of the
  159  property loss damage as a precondition to legal action for
  160  breach of contract against the insurer for its failure to pay
  161  the policyholder’s claims covered by the policy.
  162         (8) The department may designate an entity or person to
  163  serve as administrator to carry out any of the provisions of
  164  this section and may take this action by means of a written
  165  contract or agreement.
  166         (9) For purposes of this section, the term “claim” refers
  167  to any dispute between an insurer and a policyholder relating to
  168  a material issue of fact other than a dispute:
  169         (a) With respect to which the insurer has a reasonable
  170  basis to suspect fraud;
  171         (b) When the insurer has determined, based on agreed-upon
  172  facts as to the cause of loss, there is no coverage under the
  173  policy;
  174         (c) With respect to which the insurer has a reasonable
  175  basis to believe that the policyholder has intentionally made a
  176  material misrepresentation of fact which is relevant to the
  177  claim, and the entire request for payment of a loss has been
  178  denied on the basis of the material misrepresentation;
  179         (d) With respect to which the amount in controversy is less
  180  than $500, unless the parties agree to mediate a dispute
  181  involving a lesser amount; or
  182         (e) With respect to a loss that does not comply with s.
  183  627.70132.
  184         (10)Participation in mediation under this section before
  185  the policyholder’s filing of a notice under s. 627.70152 does
  186  not prohibit or waive an insurer’s right to invoke and
  187  participate in mediation under this section in response to the
  188  notice.
  189         Section 2. Subsection (3) of section 627.7074, Florida
  190  Statutes, is amended to read:
  191         627.7074 Alternative procedure for resolution of disputed
  192  sinkhole insurance claims.—
  193         (3) If there is coverage available under the policy and the
  194  claim was submitted within the timeframe provided in s.
  195  627.706(5), following the receipt of the report provided under
  196  s. 627.7073 or the denial of a claim for a sinkhole loss, the
  197  insurer shall notify the policyholder of his or her right to
  198  participate in the neutral evaluation program under this
  199  section. Neutral evaluation supersedes the mediation alternative
  200  dispute resolution process under s. 627.7015 but does not
  201  invalidate the appraisal clause of the insurance policy. The
  202  insurer shall provide to the policyholder the consumer
  203  information pamphlet prepared by the department pursuant to
  204  subsection (1) electronically or by United States mail.
  205         Section 3. Effective July 1, 2024, for the 2024-2025 fiscal
  206  year, the sum of $1 million in recurring funds is appropriated
  207  from the Insurance Regulatory Trust Fund to the Department of
  208  Financial Services for the purpose of administering the
  209  amendment made by this act to s. 627.7015, Florida Statutes.
  210         Section 4. Except as otherwise expressly provided in this
  211  act and except for this section, which shall take effect July 1,
  212  2024, this act shall take effect January 1, 2025.