Senate Bill 1472

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    Florida Senate - 1999                                  SB 1472

    By Senator Mitchell





    4-836-99

  1                      A bill to be entitled

  2         An act relating to insurance; amending s.

  3         624.426, F.S.; providing an exemption to the

  4         countersignature law; amending s. 627.7015,

  5         F.S.; defining the term "claim" for purposes of

  6         property claim mediation; providing an

  7         effective date.

  8

  9  Be It Enacted by the Legislature of the State of Florida:

10

11         Section 1.  Subsection (5) is added to section 624.426,

12  Florida Statutes, 1998 Supplement, to read:

13         624.426  Exceptions to resident agent and

14  countersignature law.--Section 624.425 does not apply to:

15         (5)  Policies of insurance issued by insurers whose

16  agents represent only one company or group of companies under

17  common ownership and for which a Florida resident agent or

18  customer representative has lawfully signed the application

19  for insurance before submitting the application to the

20  insurer.

21         Section 2.  Section 627.7015, Florida Statutes, is

22  amended to read:

23         627.7015  Alternative procedure for resolution of

24  disputed property insurance claims.--

25         (1)  PURPOSE AND SCOPE.--This section sets forth a

26  nonadversarial alternative dispute resolution procedure for a

27  mediated claim resolution conference prompted by the need for

28  effective, fair, and timely handling of property insurance

29  claims. There is a particular need for an informal,

30  nonthreatening forum for helping parties who elect this

31  procedure to resolve their claims disputes because most

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    Florida Senate - 1999                                  SB 1472
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  1  homeowner's insurance policies obligate insureds to

  2  participate in a potentially expensive and time-consuming

  3  adversarial appraisal process prior to litigation. The

  4  procedure set forth in this section is designed to bring the

  5  parties together for a mediated claims settlement conference

  6  without any of the trappings or drawbacks of an adversarial

  7  process. Before resorting to these procedures, insureds and

  8  insurers are encouraged to resolve claims as quickly and

  9  fairly as possible. This section is available with respect to

10  claims under personal lines policies for all claimants and

11  insurers prior to commencing the appraisal process, or

12  commencing litigation. If requested by the insured,

13  participation by legal counsel shall be permitted. Mediation

14  under this section is also available to litigants referred to

15  the department by a county court or circuit court. This

16  section does not apply to commercial coverages, to private

17  passenger motor vehicle insurance coverages, or to disputes

18  relating to liability coverages in policies of property

19  insurance.

20         (2)  At the time a first-party claim within the scope

21  of this section is filed, the insurer shall notify all

22  first-party claimants of their right to participate in the

23  mediation program under this section. The department shall

24  prepare a consumer information pamphlet for distribution to

25  persons participating in mediation under this section.

26         (3)  The costs of mediation shall be reasonable, and

27  the insurer shall bear all of the cost of conducting mediation

28  conferences, except as otherwise provided in this section. If

29  an insured fails to appear at the conference, the conference

30  shall be rescheduled upon the insured's payment of the costs

31  of a rescheduled conference. If the insurer fails to appear at

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    Florida Senate - 1999                                  SB 1472
    4-836-99




  1  the conference, the insurer shall pay the insured's actual

  2  cash expenses incurred in attending the conference if the

  3  insurer's failure to attend was not due to a good cause

  4  acceptable to the department. An insurer will be deemed to

  5  have failed to appear if the insurer's representative lacks

  6  authority to settle the full value of the claim. The insurer

  7  shall incur an additional fee for a rescheduled conference

  8  necessitated by the insurer's failure to appear at a scheduled

  9  conference. The fees assessed by the administrator shall

10  include a charge necessary to defray the expenses of the

11  department related to its duties under this section and shall

12  be deposited in the Insurance Commissioner's Regulatory Trust

13  Fund.

14         (4)  The department shall adopt by rule a property

15  insurance mediation program to be administered by the

16  department or its designee. The department may also adopt

17  special rules which are applicable in cases of an emergency

18  within the state. The rules shall be modeled after practices

19  and procedures set forth in mediation rules of procedure

20  adopted by the Supreme Court. The rules shall provide for:

21         (a)  Reasonable requirement for processing and

22  scheduling of requests for mediation.

23         (b)  Qualifications of mediators as provided in s.

24  627.745 and in the Florida Rules of Certified and Court

25  Appointed Mediators, and for such other individuals as are

26  qualified by education, training, or experience as the

27  department determines to be appropriate.

28         (c)  Provisions governing who may attend mediation

29  conferences.

30         (d)  Selection of mediators.

31         (e)  Criteria for the conduct of mediation conferences.

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    Florida Senate - 1999                                  SB 1472
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  1         (f)  Right to legal counsel.

  2         (5)  All statements made and documents produced at a

  3  mediation conference shall be deemed to be settlement

  4  negotiations in anticipation of litigation within the scope of

  5  s. 90.408. All parties to the mediation must negotiate in good

  6  faith and must have the authority to immediately settle the

  7  claim. Mediators are deemed to be agents of the department and

  8  shall have the immunity from suit provided in s. 44.107.

  9         (6)  Mediation is nonbinding; however, if a written

10  settlement is reached, the insured has 3 business days within

11  which the insured may rescind the settlement unless the

12  insured has cashed or deposited any check or draft disbursed

13  to the insured for the disputed matters as a result of the

14  conference. If a settlement agreement is reached and is not

15  rescinded, it shall be binding and act as a release of all

16  specific claims that were presented in that mediation

17  conference.

18         (7)  If the insurer requests the mediation, and the

19  mediation results are rejected by either party, the insured

20  shall not be required to submit to or participate in any

21  contractual loss appraisal process of the property loss damage

22  as a precondition to legal action for breach of contract

23  against the insurer for its failure to pay the policyholder's

24  claims covered by the policy.

25         (8)  The department may designate an entity or person

26  to serve as administrator to carry out any of the provisions

27  of this section and may take this action by means of a written

28  contract or agreement.

29         (9)  For purposes of this section, the term "claim"

30  refers to any dispute between an insurer and an insured

31  relating to a material issue of fact other than a dispute:

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    Florida Senate - 1999                                  SB 1472
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  1         (a)  With respect to which the insurer has a reasonable

  2  basis to suspect fraud;

  3         (b)  Where, based on agreed-upon facts as to the cause

  4  of loss, there is no coverage under the policy; or

  5         (c)  With respect to which the insurer has a reasonable

  6  basis to believe that the claimant has intentionally made a

  7  material misrepresentation of fact which is relevant to the

  8  claim, and the entire request for payment of a loss has been

  9  denied on the basis of the material misrepresentation.

10         Section 3.  This act shall take effect upon becoming a

11  law.

12

13            *****************************************

14                          SENATE SUMMARY

15    Provides an exception to insurance countersignature
      requirements for policies issued by certain insurers with
16    Florida resident agents. Defines the term "claim" for
      purposes of certain alternative procedures for resolving
17    disputed property insurance claims.

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