| 1 | Representative(s) Legg offered the following: |
| 2 |
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| 3 | Amendment to Amendment (074037) (with title amendment) |
| 4 | Remove line(s) 3863-3872 and insert: |
| 5 | Section 20. Subsection (1) and paragraph (d) of subsection |
| 6 | (2) of section 627.706, Florida Statutes, are amended to read: |
| 7 | 627.706 Sinkhole insurance; definitions.-- |
| 8 | (1) Every insurer authorized to transact property |
| 9 | insurance in this state shall make available coverage for |
| 10 | insurable sinkhole losses on any structure, including contents |
| 11 | of personal property contained therein, to the extent provided |
| 12 | in the form to which the sinkhole coverage attaches. A policy |
| 13 | for residential property insurance may include a deductible |
| 14 | amount applicable to sinkhole losses equal to 1 percent, 2 |
| 15 | percent, 5 percent, or 10 percent of the policy dwelling limits, |
| 16 | with appropriate premium discounts offered with each deductible |
| 17 | amount. |
| 18 | (2) As used in ss. 627.706-627.7074, and as used in |
| 19 | connection with any policy providing coverage for sinkhole |
| 20 | losses: |
| 21 | (d) "Professional engineer" means a person, as defined in |
| 22 | s. 471.005, who has a bachelor's degree or higher in engineering |
| 23 | with a specialty in the geotechnical engineering field. A |
| 24 | professional An engineer must have geotechnical experience and |
| 25 | expertise in the identification of sinkhole activity as well as |
| 26 | other potential causes of damage to the structure. |
| 27 | Section 21. Subsections (2), (3), (5), (6), and (9) of |
| 28 | section 627.707, Florida Statutes, are amended to read: |
| 29 | 627.707 Standards for investigation of sinkhole claims by |
| 30 | insurers; nonrenewals.--Upon receipt of a claim for a sinkhole |
| 31 | loss, an insurer must meet the following standards in |
| 32 | investigating a claim: |
| 33 | (2) Following the insurer's initial inspection, the |
| 34 | insurer shall engage a professional an engineer or a |
| 35 | professional geologist to conduct testing as provided in s. |
| 36 | 627.7072 to determine the cause of the loss within a reasonable |
| 37 | professional probability and issue a report as provided in s. |
| 38 | 627.7073, if: |
| 39 | (a) The insurer is unable to identify a valid cause of the |
| 40 | damage or discovers damage to the structure which is consistent |
| 41 | with sinkhole loss; or |
| 42 | (b) The policyholder demands testing in accordance with |
| 43 | this section or s. 627.7072. |
| 44 | (3) Following the initial inspection of the insured |
| 45 | premises, the insurer shall provide written notice to the |
| 46 | policyholder disclosing the following information: |
| 47 | (a) What the insurer has determined to be the cause of |
| 48 | damage, if the insurer has made such a determination. |
| 49 | (b) A statement of the circumstances under which the |
| 50 | insurer is required to engage a professional an engineer or a |
| 51 | professional geologist to verify or eliminate sinkhole loss and |
| 52 | to engage a professional an engineer to make recommendations |
| 53 | regarding land and building stabilization and foundation repair. |
| 54 | (c) A statement regarding the right of the policyholder to |
| 55 | request testing by a professional an engineer or a professional |
| 56 | geologist and the circumstances under which the policyholder may |
| 57 | demand certain testing. |
| 58 | (5)(a) Subject to paragraph (b), if a sinkhole loss is |
| 59 | verified, the insurer shall pay to stabilize the land and |
| 60 | building and repair the foundation in accordance with the |
| 61 | recommendations of the professional engineer as provided under |
| 62 | s. 627.7073, and in consultation with the policyholder, subject |
| 63 | to the coverage and terms of the policy. The insurer shall pay |
| 64 | for other repairs to the structure and contents in accordance |
| 65 | with the terms of the policy. |
| 66 | (b) The insurer may limit its payment to the actual cash |
| 67 | value of the sinkhole loss, not including underpinning or |
| 68 | grouting or any other repair technique performed below the |
| 69 | existing foundation of the building, until the policyholder |
| 70 | enters into a contract for the performance of building |
| 71 | stabilization or foundation repairs. After the policyholder |
| 72 | enters into the contract, the insurer shall pay the amounts |
| 73 | necessary to begin and perform such repairs as the work is |
| 74 | performed and the expenses are incurred. The insurer may not |
| 75 | require the policyholder to advance payment for such repairs. If |
| 76 | repair covered by a personal lines residential property |
| 77 | insurance policy has begun and the professional engineer |
| 78 | selected or approved by the insurer determines that the repair |
| 79 | cannot be completed within the policy limits, the insurer must |
| 80 | either complete the professional engineer's recommended repair |
| 81 | or tender the policy limits to the policyholder without a |
| 82 | reduction for the repair expenses incurred. |
| 83 | (c) Upon the insurer's obtaining the written approval of |
| 84 | the policyholder and any lienholder, the insurer may make |
| 85 | payment directly to the persons selected by the policyholder to |
| 86 | perform the land and building stabilization and foundation |
| 87 | repairs. The decision by the insurer to make payment to such |
| 88 | persons does not hold the insurer liable for the work performed. |
| 89 | (6) Except as provided in subsection (7), the fees and |
| 90 | costs of the professional engineer or the professional geologist |
| 91 | shall be paid by the insurer. |
| 92 | (9) The insurer may engage a professional structural |
| 93 | engineer to make recommendations as to the repair of the |
| 94 | structure. |
| 95 | Section 22. Section 627.7072, Florida Statutes, is amended |
| 96 | to read: |
| 97 | 627.7072 Testing standards for sinkholes.-- |
| 98 | (1) The professional engineer or and professional |
| 99 | geologist shall perform such tests as sufficient, in their |
| 100 | professional opinion, to determine the presence or absence of |
| 101 | sinkhole loss or other cause of damage within reasonable |
| 102 | professional probability and for the professional engineer to |
| 103 | make recommendations regarding necessary building stabilization |
| 104 | and foundation repair. |
| 105 | (2) Testing by a professional geologist shall be conducted |
| 106 | in compliance with the Florida Geological Survey Special |
| 107 | Publication No. 57 (2005). |
| 108 | Section 23. Subsections (1) and (2) of section 627.7073, |
| 109 | Florida Statutes, are amended to read: |
| 110 | 627.7073 Sinkhole reports.-- |
| 111 | (1) Upon completion of testing as provided in s. 627.7072, |
| 112 | the professional engineer or and professional geologist shall |
| 113 | issue a report and certification to the insurer and the |
| 114 | policyholder as provided in this section. |
| 115 | (a) Sinkhole loss is verified if, based upon tests |
| 116 | performed in accordance with s. 627.7072, a professional an |
| 117 | engineer or and a professional geologist issue a written report |
| 118 | and certification stating: |
| 119 | 1. That the cause of the actual physical and structural |
| 120 | damage is sinkhole activity within a reasonable professional |
| 121 | probability. |
| 122 | 2. That the analyses conducted were of sufficient scope to |
| 123 | identify sinkhole activity as the cause of damage within a |
| 124 | reasonable professional probability. |
| 125 | 3. A description of the tests performed. |
| 126 | 4. A recommendation by the professional engineer of |
| 127 | methods for stabilizing the land and building and for making |
| 128 | repairs to the foundation. |
| 129 | (b) If sinkhole activity is eliminated as the cause of |
| 130 | damage to the structure, the professional engineer or and |
| 131 | professional geologist shall issue a written report and |
| 132 | certification to the policyholder and the insurer stating: |
| 133 | 1. That the cause of the damage is not sinkhole activity |
| 134 | within a reasonable professional probability. |
| 135 | 2. That the analyses and tests conducted were of |
| 136 | sufficient scope to eliminate sinkhole activity as the cause of |
| 137 | damage within a reasonable professional probability. |
| 138 | 3. A statement of the cause of the damage within a |
| 139 | reasonable professional probability. |
| 140 | 4. A description of the tests performed. |
| 141 | (c) The respective findings, opinions, and recommendations |
| 142 | of the professional engineer or and professional geologist as to |
| 143 | the cause of distress to the property verification or |
| 144 | elimination of a sinkhole loss and the findings, opinions, and |
| 145 | recommendations of the professional engineer as to land and |
| 146 | building stabilization and foundation repair shall be presumed |
| 147 | correct. |
| 148 | (2) Any insurer that has paid a claim for a sinkhole loss |
| 149 | shall file a copy of the report and certification, prepared |
| 150 | pursuant to subsection (1), with the county clerk of court |
| 151 | property appraiser, who shall record the report and |
| 152 | certification with the parcel number. The insurer shall bear the |
| 153 | cost of filing and recording the report and certification. There |
| 154 | shall be no cause of action or liability against an insurer for |
| 155 | compliance with this section. The seller of real property upon |
| 156 | which a sinkhole claim has been made shall disclose to the buyer |
| 157 | of such property that a claim has been paid and whether or not |
| 158 | the full amount of the proceeds were used to repair the sinkhole |
| 159 | damage. |
| 160 | Section 24. Effective October 1, 2006, section 627.7074, |
| 161 | Florida Statutes, is created to read: |
| 162 | 627.7074 Alternative procedure for resolution of disputed |
| 163 | sinkhole insurance claims.-- |
| 164 | (1) As used in this section, the term: |
| 165 | (a) "Neutral evaluation" means the alternative dispute |
| 166 | resolution provided for in this section. |
| 167 | (b) "Neutral evaluator" means a professional engineer or a |
| 168 | professional geologist who has completed a course of study in |
| 169 | alternative dispute resolution designed or approved by the |
| 170 | department for use in the neutral evaluation process, who is |
| 171 | determined to be fair and impartial. |
| 172 | (2)(a) The department shall certify and maintain a list of |
| 173 | persons who are neutral evaluators. |
| 174 | (b) The department shall prepare a consumer information |
| 175 | pamphlet for distribution by insurers to policyholders which |
| 176 | clearly describes the neutral evaluation process and includes |
| 177 | information and forms necessary for the policyholder to request |
| 178 | a neutral evaluation. |
| 179 | (3) Following the receipt of the report provided under s. |
| 180 | 627.7073 or the denial of a claim for a sinkhole loss, the |
| 181 | insurer shall notify the policyholder of his or her right to |
| 182 | participate in the neutral evaluation program under this |
| 183 | section. Neutral evaluation supersedes the alternative dispute |
| 184 | resolution process under s. 627.7015. The insurer shall provide |
| 185 | to the policyholder the consumer information pamphlet prepared |
| 186 | by the department pursuant to paragraph (2)(b). |
| 187 | (4) Neutral evaluation is optional and nonbinding. Either |
| 188 | the policyholder or the insurer may decline to participate. A |
| 189 | request for neutral evaluation may be filed with the department |
| 190 | by the policyholder or the insurer on a form approved by the |
| 191 | department. The request for neutral evaluation must state the |
| 192 | reason for the request and must include an explanation of all |
| 193 | the issues in dispute at the time of the request. Filing a |
| 194 | request for neutral evaluation tolls the applicable time |
| 195 | requirements for filing suit for a period of 60 days following |
| 196 | the conclusion of the neutral evaluation process or the time |
| 197 | prescribed in s. 95.11, whichever is later. |
| 198 | (5) Neutral evaluation shall be conducted as an informal |
| 199 | process in which formal rules of evidence and procedure need not |
| 200 | be observed. A party to neutral evaluation is not required to |
| 201 | attend neutral evaluation if a representative of the party |
| 202 | attends and has the authority to make a binding decision on |
| 203 | behalf of the party. All parties shall participate in the |
| 204 | evaluation in good faith. |
| 205 | (6) The insurer shall pay the costs associated with the |
| 206 | neutral evaluation. |
| 207 | (7) Upon receipt of a request for neutral evaluation, the |
| 208 | department shall refer the request to a neutral evaluator. The |
| 209 | neutral evaluator shall notify the policyholder and the insurer |
| 210 | of the date, time, and place of the neutral evaluation |
| 211 | conference. The conference may be held by telephone, if feasible |
| 212 | and desirable. The neutral evaluation conference shall be held |
| 213 | within 45 days after receipt of the request by the department. |
| 214 | (8) The department shall adopt rules of procedure for the |
| 215 | neutral evaluation process. |
| 216 | (9) For policyholders not represented by an attorney, a |
| 217 | consumer affairs specialist of the department or an employee |
| 218 | designated as the primary contact for consumers on issues |
| 219 | relating to sinkholes under s. 20.121 shall be available for |
| 220 | consultation to the extent that he or she may lawfully do so. |
| 221 | (10) Evidence of an offer to settle a claim during the |
| 222 | neutral evaluation process, as well as any relevant conduct or |
| 223 | statements made in negotiations concerning the offer to settle a |
| 224 | claim, is inadmissible to prove liability or absence of |
| 225 | liability for the claim or its value, except as provided in |
| 226 | subsection (13). |
| 227 | (11) Any court proceeding related to the subject matter of |
| 228 | the neutral evaluation shall be stayed pending completion of the |
| 229 | neutral evaluation. |
| 230 | (12) For matters that are not resolved by the parties at |
| 231 | the conclusion of the neutral evaluation, the neutral evaluator |
| 232 | shall prepare a report stating that in his or her opinion the |
| 233 | sinkhole loss has been verified or eliminated and, if verified, |
| 234 | the need for and estimated costs of stabilizing the land and any |
| 235 | covered structures or buildings and other appropriate |
| 236 | remediation or structural repairs. The evaluator's report shall |
| 237 | be sent to all parties in attendance at the neutral evaluation |
| 238 | and to the department. |
| 239 | (13) The recommendation of the neutral evaluator is not |
| 240 | binding on any party, and the parties retain access to courts. |
| 241 | The neutral evaluator's written recommendation is admissible in |
| 242 | any subsequent action or proceeding relating to the claim or to |
| 243 | the cause of action giving rise to the claim only for purposes |
| 244 | of determining the award of attorney's fees. |
| 245 | (14) If the neutral evaluator first verifies the existence |
| 246 | of a sinkhole and, second, recommends the need for and estimates |
| 247 | costs of stabilizing the land and any covered structures or |
| 248 | buildings and other appropriate remediation or structural |
| 249 | repairs, which costs exceed the amount that the insurer has |
| 250 | offered to pay the policyholder, the insurer is liable to the |
| 251 | policyholder for up to $2,500 in attorney's fees for the |
| 252 | attorney's participation in the neutral evaluation process. For |
| 253 | purposes of this subsection, the term "offer to pay" means a |
| 254 | written offer signed by the insurer or its legal representative |
| 255 | and delivered to the policyholder within 10 days after the |
| 256 | insurer receives notice that a request for neutral evaluation |
| 257 | has been made under this section. |
| 258 | (15) If the policyholder declines to participate in |
| 259 | neutral evaluation requested by the insurer or declines to |
| 260 | resolve the matter in accordance with the recommendation of the |
| 261 | neutral evaluator pursuant to this section, the insurer is not |
| 262 | liable for attorney's fees under s. 627.428 or other provisions |
| 263 | of the insurance code or for extra-contractual damages related |
| 264 | to a claim for a sinkhole loss. |
| 265 | Section 25. Subsection (2) of section 877.02, Florida |
| 266 | Statutes, is amended to read: |
| 267 | 877.02 Solicitation of legal services or retainers |
| 268 | therefor; penalty.-- |
| 269 | (2) It shall be unlawful for any person in the employ of |
| 270 | or in any capacity attached to any hospital, sanitarium, police |
| 271 | department, wrecker service or garage, prison or court, or for a |
| 272 | person authorized to furnish bail bonds, investigators, |
| 273 | photographers, insurance or public adjusters, or for a general |
| 274 | or other contractor as defined in s. 489.105 or other business |
| 275 | providing sinkhole remediation services, to communicate directly |
| 276 | or indirectly with any attorney or person acting on said |
| 277 | attorney's behalf for the purpose of aiding, assisting or |
| 278 | abetting such attorney in the solicitation of legal business or |
| 279 | the procurement through solicitation of a retainer, written or |
| 280 | oral, or any agreement authorizing the attorney to perform or |
| 281 | render legal services. |
| 282 |
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| 283 |
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| 284 | ======== T I T L E A M E N D M E N T ======== |
| 285 | Remove line(s) 4740-4741 and insert: |
| 286 | emergency rules; amending s. 627.706, F.S.; allowing a |
| 287 | deductible amount applicable to sinkhole losses in a policy for |
| 288 | residential property insurance; defining the term "professional |
| 289 | engineer"; amending s. 627.707, F.S.; revising references to |
| 290 | certain engineers; authorizing insurers to make direct payment |
| 291 | for certain repairs; excluding insurers from liability for |
| 292 | repairs under certain circumstances; amending s. 627.7072, F.S.; |
| 293 | revising references to certain engineers; eliminating the |
| 294 | requirement for certain testing compliance; amending s. |
| 295 | 627.7073, F.S.; revising requirements for sinkhole reports by |
| 296 | professional engineers and professional geologists; providing |
| 297 | for the recording of sinkhole reports by the clerk of court |
| 298 | rather than the property appraiser; creating s. 627.7074, F.S.; |
| 299 | prescribing an alternative method for resolving disputed |
| 300 | sinkhole insurance claims; providing definitions; prescribing |
| 301 | procedures for invoking the alternative method; providing that a |
| 302 | recommendation by a neutral evaluator is not binding on any |
| 303 | party; providing for payments of costs; requiring the insurer to |
| 304 | pay attorney's fees of the policyholder up to a specified amount |
| 305 | under certain conditions; providing that an insurer is not |
| 306 | liable for attorney's fees or for certain damages under certain |
| 307 | conditions; amending s. 877.02, F.S.; prohibiting certain |
| 308 | solicitations by contractors and other persons providing |
| 309 | sinkhole remediation services; providing penalties; amending s. |
| 310 | 627.727, F.S.; correcting a cross- |