Florida Senate - 2017                        COMMITTEE AMENDMENT
       Bill No. CS for SB 1684
       
       
       
       
       
       
                                Ì9795148Î979514                         
       
                              LEGISLATIVE ACTION                        
                    Senate             .             House              
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       The Committee on Rules (Farmer) recommended the following:
       
    1         Senate Amendment (with title amendment)
    2  
    3         Delete everything after the enacting clause
    4  and insert:
    5         Section 1. Subsection (11) is added to section 627.062,
    6  Florida Statutes, to read:
    7         627.062 Rate standards.—
    8         (11) Attorney fees and costs paid by a property insurer
    9  pursuant to s. 627.428 may not be included in the property
   10  insurer’s rate base and may not be used to justify a rate
   11  increase or rate change.
   12         Section 2. Section 627.422, Florida Statutes, is amended to
   13  read:
   14         627.422 Assignment of policies or post-loss benefits.—A
   15  policy may be assignable, or not assignable, as provided by its
   16  terms.
   17         (1) LIFE OR HEALTH INSURANCE POLICIES.—Subject to its terms
   18  relating to assignability, any life or health insurance policy
   19  under the terms of which the beneficiary may be changed upon the
   20  sole request of the policyowner may be assigned either by pledge
   21  or transfer of title, by an assignment executed by the
   22  policyowner alone and delivered to the insurer, whether or not
   23  the pledgee or assignee is the insurer. Any such assignment
   24  shall entitle the insurer to deal with the assignee as the owner
   25  or pledgee of the policy in accordance with the terms of the
   26  assignment, until the insurer has received at its home office
   27  written notice of termination of the assignment or pledge or
   28  written notice by or on behalf of some other person claiming
   29  some interest in the policy in conflict with the assignment.
   30         (2) POST-LOSS BENEFITS UNDER CERTAIN PROPERTY INSURANCE
   31  POLICIES.—A personal lines residential property insurance
   32  policy, a commercial residential property insurance policy, or a
   33  commercial property insurance policy may not prohibit or limit
   34  the post-loss assignment of benefits. This subsection does not
   35  affect the assignment of benefits in other insurance policies.
   36         (a) An agreement to assign post-loss benefits under this
   37  subsection is not valid unless the agreement:
   38         1. Is in writing between the policyholder and assignee and
   39  is delivered to the insurer as provided in paragraph (c);
   40         2.Is limited to claims for work performed or to be
   41  performed by the assignee for damages claimed to be covered;
   42         3.Allows the policyholder to unilaterally cancel the
   43  assignment of post-loss benefits without penalty or obligation
   44  within 7 days after the execution of the assignment by an
   45  insured; provided, however, that the policyholder or insurer may
   46  be responsible for payment for work already performed during
   47  such period;
   48         4. Contains an accurate and up-to-date statement of the
   49  scope of work to be performed;
   50         5. Includes proof that the assignee possesses a valid
   51  certification from an entity that requires water damage
   52  remediation to be performed according to a standard approved by
   53  the American National Standards Institute; and
   54         6. Contains the following notice in at least 14-point,
   55  capitalized type:
   56  
   57  YOU ARE AUTHORIZING THE ASSIGNEE OF YOUR POLICY TO COMMUNICATE
   58  WITH YOUR INSURANCE COMPANY ON YOUR BEHALF. THIS ASSIGNMENT
   59  GIVES YOUR ASSIGNEE THE PRIMARY AUTHORITY TO NEGOTIATE WITH YOUR
   60  INSURANCE COMPANY ON YOUR BEHALF. PLEASE READ AND UNDERSTAND
   61  THIS DOCUMENT BEFORE SIGNING IT. YOU HAVE THE RIGHT TO CANCEL
   62  THIS AGREEMENT WITHOUT PENALTY OR OBLIGATION WITHIN 7 DAYS AFTER
   63  THE DATE THIS AGREEMENT IS EXECUTED. SHOULD YOU CANCEL THIS
   64  AGREEMENT, YOU OR YOUR INSURER MAY BE RESPONSIBLE FOR ANY WORK
   65  THAT HAS ALREADY BEEN PERFORMED. THIS AGREEMENT DOES NOT CHANGE
   66  YOUR OBLIGATION TO PERFORM THE DUTIES UNDER YOUR PROPERTY
   67  INSURANCE POLICY.
   68         (b) An assignee of post-loss benefits under this
   69  subsection:
   70         1. Must provide the policyholder with accurate and up-to
   71  date revised statements of the scope of work to be performed as
   72  supplemental or additional repairs are required, and must
   73  provide to the policyholder and insurer a final invoice and bill
   74  for service rendered within 7 business days after the date on
   75  which the work was completed;
   76         2. Must guarantee to the policyholder that the work
   77  performed conforms to current and accepted industry standards;
   78         3. May not charge the policyholder more than the applicable
   79  deductible contained in the policy unless the policyholder opts
   80  for additional work or betterment of materials at the
   81  policyholder’s own expense;
   82         4. May not pay referral fees totaling more than $750 in
   83  connection with the assignment; and
   84         5.May not charge the policyholder directly, except for
   85  additional work not covered under the policy which includes:
   86         a.Work performed that is rightfully denied as not covered;
   87  and
   88         b.Betterments or additional work not part of the loss.
   89         (c) An insurer shall provide on its website and in the
   90  policy its contact information for receiving the agreement that
   91  meets the requirements of paragraph (a). The contact information
   92  must include at least a dedicated facsimile number. After
   93  executing the assignment agreement, the assignee must deliver
   94  the agreement to the insurer within the later of:
   95         1. If a state of emergency was declared under s. 252.36 for
   96  a hurricane or other natural disaster and the property covered
   97  under the policy was damaged as a result of the hurricane or
   98  natural disaster, 7 days after the state of emergency is
   99  terminated; or
  100         2. Seven business days after execution of the agreement.
  101         (d) Notwithstanding s. 627.70131, upon receiving the
  102  agreement in paragraph (a), the insurer must make any initial
  103  inspections of the covered property within the later of:
  104         1. If a state of emergency was declared under s. 252.36 for
  105  a hurricane or other natural disaster and the property covered
  106  under the policy was damaged as a result of the hurricane or
  107  natural disaster, 7 days after the state of emergency is
  108  terminated; or
  109         2. Seven business days after receiving the agreement.
  110         (e) No later than 7 days before an insured or assignee
  111  initiates litigation against an insurer relating to a denied or
  112  limited claim, the insured or assignee must provide the insurer
  113  with notice of intent to initiate such litigation. The notice of
  114  intent must include a copy of the final invoice required under
  115  subparagraph (b)1 for the work that has been performed or an
  116  estimate of the work to be performed. This paragraph does not
  117  increase the time periods prescribed in s. 627.70131.
  118         (f) Notwithstanding any other law, in a dispute relating to
  119  the assignment of benefits for a personal lines residential
  120  property insurance policy, commercial residential property
  121  insurance policy, or commercial property insurance policy in
  122  which an assignee but not the named insured is a party, for any
  123  proposal for settlement made to a plaintiff, such proposal shall
  124  be served no earlier than 10 days after the date of commencement
  125  of the action.
  126         (g) This section does not apply to:
  127         1. An assignment, transfer, or conveyance granted to a
  128  subsequent purchaser of the property with an insurable interest
  129  in the property following a loss;
  130         2. A power of attorney under chapter 709 which grants to a
  131  management company, family member, guardian, or similarly
  132  situated person of an insured the authority to act on behalf of
  133  an insured as it relates to a property insurance claim; or
  134         3. Liability coverage under a property insurance policy.
  135         (3) ANNUAL REPORT.—The office shall require each insurer to
  136  report by March 31, 2019, and each year thereafter, data on each
  137  claim paid in the prior calendar year pursuant to an assignment
  138  agreement. Such data must include, but are not limited to:
  139         (a)The number of days between the first notice of loss and
  140  the initial inspection.
  141         (b) Loss severity.
  142         (c)Allocated loss adjustment expense.
  143         (d)For litigated claims:
  144         1.Any amount paid before litigation, the amount in
  145  dispute, the amount of any proposal for settlement, and the
  146  settlement or judgment amount;
  147         2.The amount of fees paid to the claimant’s attorney; and
  148         3.The amount and structure, whether fixed, hourly, or
  149  contingent, of fees paid to the insurer’s attorney.
  150  
  151  All information the insurer reports under this paragraph must
  152  first be reported to the opposing counsel on the litigated claim
  153  for verification or certification. The opposing counsel on the
  154  litigated claim shall report to the office its agreement or
  155  disagreement with the accuracy of the figures reported.
  156         (e) For nonlitigated claims, the difference between the
  157  insurer’s initial offer and the amount paid on the claim.
  158         (f)The time from the first notice of loss until the claim
  159  was closed.
  160         (g)For claims involving water damage, whether the adjuster
  161  possessed certification from an entity that requires water
  162  damage remediation to be performed according to a standard
  163  approved by the American National Standards Institute.
  164         Section 3. The amendments made by this act to s. 627.422,
  165  Florida Statutes, apply to assignment agreements entered into on
  166  or after January 1, 2018.
  167         Section 4. Paragraph (a) of subsection (3) of section
  168  627.7011, Florida Statutes, is amended to read:
  169         627.7011 Homeowners’ policies; offer of replacement cost
  170  coverage and law and ordinance coverage.—
  171         (3) In the event of a loss for which a dwelling or personal
  172  property is insured on the basis of replacement costs:
  173         (a) For a dwelling:,
  174         1. The insurer must initially pay at least the actual cash
  175  value of the insured loss, less any applicable deductible. The
  176  insurer shall pay any remaining amounts necessary to perform
  177  such repairs as work is performed and expenses are incurred. If
  178  a total loss of a dwelling occurs, the insurer shall pay the
  179  replacement cost coverage without reservation or holdback of any
  180  depreciation in value, pursuant to s. 627.702.
  181         2. The insurer may not require that a particular vendor
  182  make repairs to such dwelling.
  183         3. The insurer may not, unless expressly requested by the
  184  insured, recommend or suggest a particular vendor for repairs to
  185  be made to such dwelling.
  186         Section 5. This act shall take effect January 1, 2018.
  187  
  188  ================= T I T L E  A M E N D M E N T ================
  189  And the title is amended as follows:
  190         Delete everything before the enacting clause
  191  and insert:
  192                        A bill to be entitled                      
  193         An act relating to property insurance; amending s.
  194         627.062, F.S.; prohibiting certain attorney fees and
  195         costs paid by a property insurer from being included
  196         in such insurer’s rate base and from being used to
  197         justify a rate increase or rate change; amending s.
  198         627.422, F.S.; prohibiting certain property insurance
  199         policies from prohibiting or limiting the post-loss
  200         assignment of benefits; providing that an assignment
  201         agreement is not valid unless it meets specified
  202         requirements; providing requirements and limitations
  203         for assignees of post-loss benefits; requiring
  204         insurers to provide specified contact information on
  205         their websites and in policies; requiring assignees to
  206         deliver an executed assignment agreement to insurers
  207         within a specified timeframe; requiring insurers, upon
  208         receiving such agreements, to make any initial
  209         inspections of covered property within specified
  210         timeframes; requiring insureds or assignees to provide
  211         a certain prelitigation notice and invoice to insurers
  212         within a specified timeframe; providing construction;
  213         requiring certain settlement proposals to a plaintiff
  214         to be served no earlier than a specified time;
  215         providing applicability; requiring the Office of
  216         Insurance Regulation to require each insurer to report
  217         at specified timeframes certain data relating to
  218         claims paid pursuant to assignment agreements;
  219         requiring insurers to report certain information to
  220         opposing counsel, and requiring the opposing counsel
  221         to verify or certify the information; providing
  222         applicability of the amendments made by the act;
  223         amending s. 627.7011, F.S.; prohibiting specified acts
  224         of insurers relating to homeowners’ insurance policies
  225         under certain circumstances; providing an effective
  226         date.