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The Florida Senate

President Office — Press Release


April 26, 2023

CONTACT: Katie Betta, (850) 487-5229

Senate Passes Strong Insurer Accountability Package

Tallahassee —

The Florida Senate today passed Senate Bill 7052, Insurer Accountability. The legislation, sponsored by Senator Travis Hutson (R-St. Augustine), Dean of the Senate, contains various provisions intended to increase consumer protection and insurer accountability in Florida.

“A healthy insurance market results in a wide array of consumer choices, competition on price and coverage options, and insurers that are financially strong and able to promptly pay the full value of claims. Unfortunately, due primarily to excessive litigation, Florida’s insurance market has grown increasingly unhealthy. Many property insurers have gone insolvent, left the state, or reduced their willingness to write new policies,” said Senator Hutson. “This Legislature and Governor have taken aggressive action to solve this problem, passing major property insurance legislation in 2021 and 2022, and then passing major legal reforms that affect most lines of insurance,” said Senator Hutson. “The goal of all of this activity has not been to benefit the insurance industry but rather to benefit policyholders. However, we have no desire to go from a system that enriches trial lawyers, to a system that incentivizes insurance companies to use the law to avoid paying claims that should be paid.”

“Over the last several years, during regular and special sessions, we have worked on reforms to strengthen the property insurance market in our state so policyholders have access to quality, affordable, private market property insurance. Ultimately, every homeowner needs property insurance that is reliable and affordable. When disaster strikes, we want to make sure impacted Floridians can successfully navigate the claims process and be compensated for losses in a timely manner,” said Senate President Kathleen Passidomo. “This legislation continues our efforts to balance fair costs and protections for consumers, while strengthening state review and analysis of the insurance market, so that bad actors can be held accountable. I commend Senator Hutson for his diligence in bringing stakeholders together to put forward a strong and meaningful insurer accountability package that enhances consumer-friendly provisions of current law and increases transparency between homeowners and insurance companies.”

Florida’s Chief Financial Officer Jimmy Patronis said, “Florida has done a lot to mitigate the impacts of a hardening insurance market in our state while working to keep policyholders at the forefront. For too long, unscrupulous insurance companies, public adjusters, and attorneys have been allowed to drive the decline in the state’s insurance system. Thankfully, last year we passed vital reforms to alleviate the fraud, waste, and abuse that drives up rates for every Floridian. With the recent changes in law, there will be a shift from excessive claims litigation, to leveraging vital Department services like the insurance mediation program and the Consumer Services Division. By alleviating workload challenges, the Department can better support policyholders and install more accountability into the system. I have no doubt that this legislation will help empower storm victims so they can get back on their feet quicker and further down the road to recovery. Thank you to Senate President Passidomo and Senator Hutson for supporting DFS as we work to further support Florida’s policyholders.”

“This bill seeks to provide the proper balance between insurers and policyholders. It makes certain that insurers will be held accountable if they do not meet the obligations of their contracts. We are expanding resources and tools that will help DFS and OIR better serve Floridians as well as the insurance companies doing business in our state,” continued Senator Hutson. “We are incorporating feedback from the Department of Financial Services, the Office of Insurance Regulation as well as proposals put forward in legislation sponsored by Senator Grall and Senator Martin. Additionally, the bill will make sure savings generated from all the reform bills we have passed will begin to be passed on to Florida policyholders.”

Regarding rates charged for insurance, the bill:

  • Requires property insurance and motor vehicle rate filings to include, and the Office of Insurance Regulation (OIR) must consider in reviewing rates, the combined effect of recent legislative reforms.
  • Appropriates $500,000 from the Insurance Regulatory Trust Fund for OIR to obtain an actuarial study to implement this requirement.
  • Requires property insurance mitigation discounts to be updated at least every 5 years.
  • Requires insurers to provide consumer-friendly information on their website describing hurricane mitigation discounts available to policyholders.

Regarding insurer claims handling, the bill:

  • Requires liability insurers to follow proper claims handling practices on behalf of their insureds;
  • Requires residential property insurers to create and use claims-handling manuals that comply with the Insurance Code and, at a minimum, comport to industry standards;
  • Allows OIR to request a claims handling manual at any time and requires each property insurer to attest that their claims manuals comply with Florida law and that the insurer is able to properly implement their manual; and
  • Strengthens the Unfair Insurance Trade Practices Act by:
    • Prohibiting any altering or amending of an adjuster’s report without providing a detailed explanation as to why any change that has the effect of reducing the estimate of the loss was made. The insurer must also either create a list of changes and who made the change or retain all versions of the report.
    • Prohibiting officers and directors of impaired or insolvent insurers from receiving a bonus from that insurer or other entity under common ownership with that insurer.

Regarding regulatory oversight of insurers, the bill:

  • Requires OIR, if it has reason to believe that any criminal law may have been violated, to forward relevant records and information to the Department of Financial Services (DFS), law enforcement, or prosecutorial agencies, as applicable, and for OIR to provide investigative assistance as required;
  • Specifies factors OIR may consider in determining whether the continued operation of an insurer may be deemed hazardous to its policyholders, creditors, or the general public. This part of the bill also specifies actions OIR may take in determining an insurer's financial condition and actions OIR may order an insurer to take in an effort to improve the insurer’s financial condition;
  • Increases maximum administrative fines that may be levied by the OIR on insurers by 250 percent generally, and 500 percent for violations stemming from a state of emergency such as a hurricane;
  • Requires insurers to more promptly respond to the DFS Division of Consumer Services and increases fines for noncompliance;
  • Increases staffing for the DFS Division of Consumer Services by appropriating funding for 7 full-time equivalent positions;
  • Increases staffing at the OIR by appropriating 18 full-time equivalent positions;
  • Specifies objective criteria to be used by OIR to prioritize necessary financial and market conduct examinations. The amendment requires that OIR conduct financial examinations of high-risk insurers once every 3 years, rather than every 5 years as under current law;
  • Provides conditions whereby the OIR must initiate a market conduct examination after a hurricane;
  • Requires property insurers to report any temporary suspension of writing new policies not caused by a hurricane or a natural emergency to the OIR;
  • Specifies that insurance fraud referrals may be made to the statewide prosecutor for crimes that impact two or more judicial circuits;
  • Requires additional reporting from regulators regarding their enforcement actions; and
  • Requires the state attorney or other prosecuting agency having jurisdiction to inform the DFS of the reasons why prosecution of an insurance-related criminal referral has been declined.