Florida Senate - 2017                        COMMITTEE AMENDMENT
       Bill No. CS for SB 1684
       
       
       
       
       
       
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                              LEGISLATIVE ACTION                        
                    Senate             .             House              
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       The Committee on Rules (Farmer) recommended the following:
       
    1         Senate Substitute for Amendment (846406) (with title
    2  amendment)
    3  
    4         Delete everything after the enacting clause
    5  and insert:
    6         Section 1. Subsection (11) is added to section 627.062,
    7  Florida Statutes, to read:
    8         627.062 Rate standards.—
    9         (11) Attorney fees and costs paid by a property insurer
   10  pursuant to s. 627.428 may not be included in the property
   11  insurer’s rate base and may not be used to justify a rate
   12  increase or rate change.
   13         Section 2. Section 627.422, Florida Statutes, is amended to
   14  read:
   15         627.422 Assignment of policies or post-loss benefits.—A
   16  policy may be assignable, or not assignable, as provided by its
   17  terms.
   18         (1) LIFE OR HEALTH INSURANCE POLICIES.—Subject to its terms
   19  relating to assignability, any life or health insurance policy
   20  under the terms of which the beneficiary may be changed upon the
   21  sole request of the policyowner may be assigned either by pledge
   22  or transfer of title, by an assignment executed by the
   23  policyowner alone and delivered to the insurer, whether or not
   24  the pledgee or assignee is the insurer. Any such assignment
   25  shall entitle the insurer to deal with the assignee as the owner
   26  or pledgee of the policy in accordance with the terms of the
   27  assignment, until the insurer has received at its home office
   28  written notice of termination of the assignment or pledge or
   29  written notice by or on behalf of some other person claiming
   30  some interest in the policy in conflict with the assignment.
   31         (2) POST-LOSS BENEFITS UNDER CERTAIN PROPERTY INSURANCE
   32  POLICIES.—A personal lines residential property insurance
   33  policy, a commercial residential property insurance policy, or a
   34  commercial property insurance policy may not prohibit or limit
   35  the post-loss assignment of benefits. This subsection does not
   36  affect the assignment of benefits in other insurance policies.
   37         (a) An agreement to assign post-loss benefits under this
   38  subsection is not valid unless the agreement:
   39         1. Is in writing between the policyholder and assignee and
   40  is delivered to the insurer as provided in paragraph (c);
   41         2.Is limited to claims for work performed or to be
   42  performed by the assignee for damages claimed to be covered;
   43         3.Allows the policyholder to unilaterally cancel the
   44  assignment of post-loss benefits without penalty or obligation
   45  within 7 days after the execution of the assignment by an
   46  insured; provided, however, that the policyholder or insurer may
   47  be responsible for payment for work already performed during
   48  such period;
   49         4. Contains an accurate and up-to-date statement of the
   50  scope of work to be performed;
   51         5. Includes proof that the assignee possesses a valid
   52  certification from an entity that requires water damage
   53  remediation to be performed according to a standard approved by
   54  the American National Standards Institute; and
   55         6. Contains the following notice in at least 14-point,
   56  capitalized type:
   57  
   58  YOU ARE AUTHORIZING THE ASSIGNEE OF YOUR POLICY TO COMMUNICATE
   59  WITH YOUR INSURANCE COMPANY ON YOUR BEHALF. THIS ASSIGNMENT
   60  GIVES YOUR ASSIGNEE THE PRIMARY AUTHORITY TO NEGOTIATE WITH YOUR
   61  INSURANCE COMPANY ON YOUR BEHALF. PLEASE READ AND UNDERSTAND
   62  THIS DOCUMENT BEFORE SIGNING IT. YOU HAVE THE RIGHT TO CANCEL
   63  THIS AGREEMENT WITHOUT PENALTY OR OBLIGATION WITHIN 7 DAYS AFTER
   64  THE DATE THIS AGREEMENT IS EXECUTED. SHOULD YOU CANCEL THIS
   65  AGREEMENT, YOU OR YOUR INSURER MAY BE RESPONSIBLE FOR ANY WORK
   66  THAT HAS ALREADY BEEN PERFORMED. THIS AGREEMENT DOES NOT CHANGE
   67  YOUR OBLIGATION TO PERFORM THE DUTIES UNDER YOUR PROPERTY
   68  INSURANCE POLICY.
   69         (b) An assignee of post-loss benefits under this
   70  subsection:
   71         1. Must provide the policyholder with accurate and up-to
   72  date revised statements of the scope of work to be performed as
   73  supplemental or additional repairs are required, and must
   74  provide to the policyholder and insurer a final invoice and bill
   75  for service rendered within 7 business days after the date on
   76  which the work was completed;
   77         2. Must guarantee to the policyholder that the work
   78  performed conforms to current and accepted industry standards;
   79         3. May not charge the policyholder more than the applicable
   80  deductible contained in the policy unless the policyholder opts
   81  for additional work or betterment of materials at the
   82  policyholder’s own expense;
   83         4. May not pay referral fees totaling more than $750 in
   84  connection with the assignment; and
   85         5.May not charge the policyholder directly, except for
   86  additional work not covered under the policy which includes:
   87         a.Work performed that is rightfully denied as not covered;
   88  and
   89         b.Betterments or additional work not part of the loss.
   90         (c) An insurer shall provide on its website and in the
   91  policy its contact information for receiving the agreement that
   92  meets the requirements of paragraph (a). The contact information
   93  must include at least a dedicated facsimile number. After
   94  executing the assignment agreement, the assignee must deliver
   95  the agreement to the insurer within the later of:
   96         1. If a state of emergency was declared under s. 252.36 for
   97  a hurricane or other natural disaster and the property covered
   98  under the policy was damaged as a result of the hurricane or
   99  natural disaster, 7 days after the state of emergency is
  100  terminated; or
  101         2. Seven business days after execution of the agreement.
  102         (d) Notwithstanding s. 627.70131, upon receiving the
  103  agreement in paragraph (a), the insurer must make any initial
  104  inspections of the covered property within the later of:
  105         1. If a state of emergency was declared under s. 252.36 for
  106  a hurricane or other natural disaster and the property covered
  107  under the policy was damaged as a result of the hurricane or
  108  natural disaster, 7 days after the state of emergency is
  109  terminated; or
  110         2. Seven business days after receiving the agreement.
  111         (e) No later than 7 days before an insured or assignee
  112  initiates litigation against an insurer relating to a denied or
  113  limited claim, the insured or assignee must provide the insurer
  114  with notice of intent to initiate such litigation. The notice of
  115  intent must include a copy of the final invoice required under
  116  subparagraph (b)1 for the work that has been performed or an
  117  estimate of the work to be performed. This paragraph does not
  118  increase the time periods prescribed in s. 627.70131.
  119         (f) Notwithstanding any other law, in a dispute relating to
  120  the assignment of benefits for a personal lines residential
  121  property insurance policy, commercial residential property
  122  insurance policy, or commercial property insurance policy in
  123  which an assignee but not the named insured is a party, for any
  124  proposal for settlement made to a plaintiff, such proposal shall
  125  be served no earlier than 10 days after the date of commencement
  126  of the action.
  127         (g) This section does not apply to:
  128         1. An assignment, transfer, or conveyance granted to a
  129  subsequent purchaser of the property with an insurable interest
  130  in the property following a loss;
  131         2. A power of attorney under chapter 709 which grants to a
  132  management company, family member, guardian, or similarly
  133  situated person of an insured the authority to act on behalf of
  134  an insured as it relates to a property insurance claim; or
  135         3. Liability coverage under a property insurance policy.
  136         (3) ANNUAL REPORT.—The office shall require each insurer to
  137  report by March 31, 2019, and each year thereafter, data on each
  138  claim paid in the prior calendar year pursuant to an assignment
  139  agreement. Such data must include, but are not limited to:
  140         (a)The number of days between the first notice of loss and
  141  the initial inspection.
  142         (b) Loss severity.
  143         (c)Allocated loss adjustment expense.
  144         (d)For litigated claims:
  145         1.Any amount paid before litigation, the amount in
  146  dispute, the amount of any proposal for settlement, and the
  147  settlement or judgment amount;
  148         2.The amount of fees paid to the claimant’s attorney; and
  149         3.The amount and structure, whether fixed, hourly, or
  150  contingent, of fees paid to the insurer’s attorney.
  151  
  152  All information the insurer reports under this paragraph must
  153  first be reported to the opposing counsel on the litigated claim
  154  for verification or certification. The opposing counsel on the
  155  litigated claim shall report to the office its agreement or
  156  disagreement with the accuracy of the figures reported.
  157         (e) For nonlitigated claims, the difference between the
  158  insurer’s initial offer and the amount paid on the claim.
  159         (f)The time from the first notice of loss until the claim
  160  was closed.
  161         (g)For claims involving water damage, whether the adjuster
  162  possessed certification from an entity that requires water
  163  damage remediation to be performed according to a standard
  164  approved by the American National Standards Institute.
  165         Section 3. The amendments made by this act to s. 627.422,
  166  Florida Statutes, apply to assignment agreements entered into on
  167  or after January 1, 2018.
  168         Section 4. Paragraph (a) of subsection (3) of section
  169  627.7011, Florida Statutes, is amended to read:
  170         627.7011 Homeowners’ policies; offer of replacement cost
  171  coverage and law and ordinance coverage.—
  172         (3) In the event of a loss for which a dwelling or personal
  173  property is insured on the basis of replacement costs:
  174         (a) For a dwelling:,
  175         1. The insurer must initially pay at least the actual cash
  176  value of the insured loss, less any applicable deductible. The
  177  insurer shall pay any remaining amounts necessary to perform
  178  such repairs as work is performed and expenses are incurred. If
  179  a total loss of a dwelling occurs, the insurer shall pay the
  180  replacement cost coverage without reservation or holdback of any
  181  depreciation in value, pursuant to s. 627.702.
  182         2. The insurer may not require that a particular vendor
  183  make repairs to such dwelling.
  184         3. The insurer may not, unless expressly requested by the
  185  insured, recommend or suggest a particular vendor for repairs to
  186  be made to such dwelling.
  187         Section 5. This act shall take effect January 1, 2018.
  188  
  189  ================= T I T L E  A M E N D M E N T ================
  190  And the title is amended as follows:
  191         Delete everything before the enacting clause
  192  and insert:
  193                        A bill to be entitled                      
  194         An act relating to insurance; amending s. 627.062,
  195         F.S.; prohibiting certain attorney fees and costs paid
  196         by a property insurer from being included in such
  197         insurer’s rate base and from being used to justify a
  198         rate increase or rate change; amending s. 627.422,
  199         F.S.; prohibiting certain property insurance policies
  200         from prohibiting or limiting the post-loss assignment
  201         of benefits; providing that an assignment agreement is
  202         not valid unless it meets specified requirements;
  203         providing requirements and limitations for assignees
  204         of post-loss benefits; requiring insurers to provide
  205         specified contact information on their websites and in
  206         policies; requiring assignees to deliver an executed
  207         assignment agreement to insurers within a specified
  208         timeframe; requiring insurers, upon receiving such
  209         agreements, to make any initial inspections of covered
  210         property within specified timeframes; requiring
  211         insureds or assignees to provide a certain
  212         prelitigation notice and invoice to insurers within a
  213         specified timeframe; providing construction; requiring
  214         certain settlement proposals to a plaintiff to be
  215         served no earlier than a specified time; providing
  216         applicability; requiring the Office of Insurance
  217         Regulation to require each insurer to report at
  218         specified timeframes certain data relating to claims
  219         paid pursuant to assignment agreements; requiring
  220         insurers to report certain information to opposing
  221         counsel, and requiring the opposing counsel to verify
  222         or certify the information; providing applicability of
  223         the amendments made by the act; amending s. 627.7011,
  224         F.S.; prohibiting specified acts of insurers relating
  225         to homeowners’ insurance policies under certain
  226         circumstances; providing an effective date.