(LATE FILED)Amendment
Bill No. 7225
Amendment No. 012705
CHAMBER ACTION
Senate House
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1Representative(s) Farkas offered the following:
2
3     Amendment to Amendment (074037) (with title amendment)
4Remove line(s) 3863-3872, and insert:
5     Section 20.  Subsection (1) of section 627.706, Florida
6Statutes, is amended to read:
7     627.706  Sinkhole insurance; definitions.--
8     (1)(a)  Every insurer authorized to transact property
9insurance in this state shall make available coverage for
10insurable sinkhole losses on any structure, including contents
11of personal property contained therein, to the extent provided
12in the form to which the sinkhole coverage attaches.
13     (b)  A policy for residential property insurance may
14include a deductible amount applicable to sinkhole losses equal
15to 1 percent, 2 percent, 5 percent, or 10 percent of the policy
16dwelling limits, with appropriate premium discounts offered with
17each deductible amount.
18     (c)  The coverage required under this section is not
19applicable when an insured named in the policy makes a written
20rejection of the coverage on behalf of all insureds under the
21policy. The rejection form shall fully advise the applicant of
22the nature of the coverage and shall be approved by the office.
23The heading of the form shall be in 12-point bold type and shall
24state: "You are electing not to purchase certain valuable
25sinkhole coverage which protects your home and other insured
26structures, including contents, when you sign this form. Please
27read carefully." If this form is signed by a named insured, it
28shall be conclusively presumed that there was an informed,
29knowing rejection of coverage on behalf of all insureds. The
30insurer shall notify the named insured at least annually of her
31or his options to select or reject sinkhole coverage required by
32this section. Such notice shall be part of, and attached to, the
33notice of premium, shall provide for a means to allow the
34insured to request such coverage, and shall be given in a manner
35approved by the office. Receipt of this notice does not
36constitute an affirmative waiver of the insured's right to
37sinkhole coverage when the insured has not signed a selection or
38rejection form.
39     Section 21.  Subsections (2), (3), (5), (6), and (9) of
40section 627.707, Florida Statutes, are amended to read:
41     627.707  Standards for investigation of sinkhole claims by
42insurers; nonrenewals.--Upon receipt of a claim for a sinkhole
43loss, an insurer must meet the following standards in
44investigating a claim:
45     (2)  Following the insurer's initial inspection, the
46insurer shall engage a professional an engineer or a
47professional geologist to conduct testing as provided in s.
48627.7072 to determine the cause of the loss within a reasonable
49professional probability and issue a report as provided in s.
50627.7073, if:
51     (a)  The insurer is unable to identify a valid cause of the
52damage or discovers damage to the structure which is consistent
53with sinkhole loss; or
54     (b)  The policyholder demands testing in accordance with
55this section or s. 627.7072.
56     (3)  Following the initial inspection of the insured
57premises, the insurer shall provide written notice to the
58policyholder disclosing the following information:
59     (a)  What the insurer has determined to be the cause of
60damage, if the insurer has made such a determination.
61     (b)  A statement of the circumstances under which the
62insurer is required to engage a professional an engineer or a
63professional geologist to verify or eliminate sinkhole loss and
64to engage a professional an engineer to make recommendations
65regarding land and building stabilization and foundation repair.
66     (c)  A statement regarding the right of the policyholder to
67request testing by a professional an engineer or a professional
68geologist and the circumstances under which the policyholder may
69demand certain testing.
70     (5)(a)  Subject to paragraph (b), if a sinkhole loss is
71verified, the insurer shall pay to stabilize the land and
72building and repair the foundation in accordance with the
73recommendations of the professional engineer as provided under
74s. 627.7073, and in consultation with the policyholder, subject
75to the coverage and terms of the policy. The insurer shall pay
76for other repairs to the structure and contents in accordance
77with the terms of the policy.
78     (b)  The insurer may limit its payment to the actual cash
79value of the sinkhole loss, not including underpinning or
80grouting or any other repair technique performed below the
81existing foundation of the building, until the policyholder
82enters into a contract for the performance of building
83stabilization or foundation repairs. After the policyholder
84enters into the contract, the insurer shall pay the amounts
85necessary to begin and perform such repairs as the work is
86performed and the expenses are incurred. The insurer may not
87require the policyholder to advance payment for such repairs. If
88repair covered by a personal lines residential property
89insurance policy has begun and the professional engineer
90selected or approved by the insurer determines that the repair
91cannot be completed within the policy limits, the insurer must
92either complete the professional engineer's recommended repair
93or tender the policy limits to the policyholder without a
94reduction for the repair expenses incurred.
95     (c)  Upon the insurer's obtaining the written approval of
96the policyholder and any lienholder, the insurer may make
97payment directly to the persons selected by the policyholder to
98perform the land and building stabilization and foundation
99repairs. The decision by the insurer to make payment to such
100persons does not hold the insurer liable for the work performed.
101     (6)  Except as provided in subsection (7), the fees and
102costs of the professional engineer or the professional geologist
103shall be paid by the insurer.
104     (9)  The insurer may engage a professional structural
105engineer to make recommendations as to the repair of the
106structure.
107     Section 22.  Section 627.7072, Florida Statutes, is amended
108to read:
109     627.7072  Testing standards for sinkholes.--
110     (1)  The professional engineer or and professional
111geologist shall perform such tests as sufficient, in their
112professional opinion, to determine the presence or absence of
113sinkhole loss or other cause of damage within reasonable
114professional probability and for the professional engineer to
115make recommendations regarding necessary building stabilization
116and foundation repair.
117     (2)  Testing by a professional geologist shall be conducted
118in compliance with the Florida Geological Survey Special
119Publication No. 57 (2005).
120     Section 23.  Subsections (1) and (2) of section 627.7073,
121Florida Statutes, are amended to read:
122     627.7073  Sinkhole reports.--
123     (1)  Upon completion of testing as provided in s. 627.7072,
124the professional engineer or and professional geologist shall
125issue a report and certification to the insurer and the
126policyholder as provided in this section.
127     (a)  Sinkhole loss is verified if, based upon tests
128performed in accordance with s. 627.7072, a professional an
129engineer or and a professional geologist issue a written report
130and certification stating:
131     1.  That the cause of the actual physical and structural
132damage is sinkhole activity within a reasonable professional
133probability.
134     2.  That the analyses conducted were of sufficient scope to
135identify sinkhole activity as the cause of damage within a
136reasonable professional probability.
137     3.  A description of the tests performed.
138     4.  A recommendation by the professional engineer of
139methods for stabilizing the land and building and for making
140repairs to the foundation.
141     (b)  If sinkhole activity is eliminated as the cause of
142damage to the structure, the professional engineer or and
143professional geologist shall issue a written report and
144certification to the policyholder and the insurer stating:
145     1.  That the cause of the damage is not sinkhole activity
146within a reasonable professional probability.
147     2.  That the analyses and tests conducted were of
148sufficient scope to eliminate sinkhole activity as the cause of
149damage within a reasonable professional probability.
150     3.  A statement of the cause of the damage within a
151reasonable professional probability.
152     4.  A description of the tests performed.
153     (c)  The respective findings, opinions, and recommendations
154of the professional engineer or and professional geologist as to
155the cause of distress to the property verification or
156elimination of a sinkhole loss and the findings, opinions, and
157recommendations of the professional engineer as to land and
158building stabilization and foundation repair shall be presumed
159correct.
160     (2)  Any insurer that has paid a claim for a sinkhole loss
161shall file a copy of the report and certification, prepared
162pursuant to subsection (1), with the county clerk of court
163property appraiser, who shall record the report and
164certification with the parcel number. The insurer shall bear the
165cost of filing and recording the report and certification. There
166shall be no cause of action or liability against an insurer for
167compliance with this section. The seller of real property upon
168which a sinkhole claim has been made shall disclose to the buyer
169of such property that a claim has been paid and whether or not
170the full amount of the proceeds were used to repair the sinkhole
171damage.
172     Section 24.  Effective October 1, 2006, section 627.7074,
173Florida Statutes, is created to read:
174     627.7074  Alternative procedure for resolution of disputed
175sinkhole insurance claims.--
176     (1)  As used in this section, the term:
177     (a)  "Neutral evaluation" means the alternative dispute
178resolution provided for in this section.
179     (b)  "Neutral evaluator" means a professional engineer or a
180professional geologist who has completed a course of study in
181alternative dispute resolution designed or approved by the
182department for use in the neutral evaluation process, who is
183determined to be fair and impartial.
184     (2)(a)  The department shall certify and maintain a list of
185persons who are neutral evaluators.
186     (b)  The department shall prepare a consumer information
187pamphlet for distribution by insurers to policyholders which
188clearly describes the neutral evaluation process and includes
189information and forms necessary for the policyholder to request
190a neutral evaluation.
191     (3)  Following the receipt of the report provided under s.
192627.7073 or the denial of a claim for a sinkhole loss, the
193insurer shall notify the policyholder of his or her right to
194participate in the neutral evaluation program under this
195section. Neutral evaluation supersedes the alternative dispute
196resolution process under s. 627.7015. The insurer shall provide
197to the policyholder the consumer information pamphlet prepared
198by the department pursuant to paragraph (2)(b).
199     (4)  Neutral evaluation is optional and nonbinding. Either
200the policyholder or the insurer may decline to participate. A
201request for neutral evaluation may be filed with the department
202by the policyholder or the insurer on a form approved by the
203department. The request for neutral evaluation must state the
204reason for the request and must include an explanation of all
205the issues in dispute at the time of the request. Filing a
206request for neutral evaluation tolls the applicable time
207requirements for filing suit for a period of 60 days following
208the conclusion of the neutral evaluation process or the time
209prescribed in s. 95.11, whichever is later.
210     (5)  Neutral evaluation shall be conducted as an informal
211process in which formal rules of evidence and procedure need not
212be observed. A party to neutral evaluation is not required to
213attend neutral evaluation if a representative of the party
214attends and has the authority to make a binding decision on
215behalf of the party. All parties shall participate in the
216evaluation in good faith.
217     (6)  The insurer shall pay the costs associated with the
218neutral evaluation.
219     (7)  Upon receipt of a request for neutral evaluation, the
220department shall refer the request to a neutral evaluator. The
221neutral evaluator shall notify the policyholder and the insurer
222of the date, time, and place of the neutral evaluation
223conference. The conference may be held by telephone, if feasible
224and desirable. The neutral evaluation conference shall be held
225within 45 days after receipt of the request by the department.
226     (8)  The department shall adopt rules of procedure for the
227neutral evaluation process.
228     (9)  For policyholders not represented by an attorney, a
229consumer affairs specialist of the department or an employee
230designated as the primary contact for consumers on issues
231relating to sinkholes under s. 20.121 shall be available for
232consultation to the extent that he or she may lawfully do so.
233     (10)  Evidence of an offer to settle a claim during the
234neutral evaluation process, as well as any relevant conduct or
235statements made in negotiations concerning the offer to settle a
236claim, is inadmissible to prove liability or absence of
237liability for the claim or its value, except as provided in
238subsection (13).
239     (11)  Any court proceeding related to the subject matter of
240the neutral evaluation shall be stayed pending completion of the
241neutral evaluation.
242     (12)  For matters that are not resolved by the parties at
243the conclusion of the neutral evaluation, the neutral evaluator
244shall prepare a report stating that in his or her opinion the
245sinkhole loss has been verified or eliminated and, if verified,
246the need for and estimated costs of stabilizing the land and any
247covered structures or buildings and other appropriate
248remediation or structural repairs. The evaluator's report shall
249be sent to all parties in attendance at the neutral evaluation
250and to the department.
251     (13)  The recommendation of the neutral evaluator is not
252binding on any party, and the parties retain access to courts.
253The neutral evaluator's written recommendation is admissible in
254any subsequent action or proceeding relating to the claim or to
255the cause of action giving rise to the claim only for purposes
256of determining the award of attorney's fees.
257     (14)  If the neutral evaluator first verifies the existence
258of a sinkhole and, second, recommends the need for and estimates
259costs of stabilizing the land and any covered structures or
260buildings and other appropriate remediation or structural
261repairs, which costs exceed the amount that the insurer has
262offered to pay the policyholder, the insurer is liable to the
263policyholder for up to $2,500 in attorney's fees for the
264attorney's participation in the neutral evaluation process. For
265purposes of this subsection, the term "offer to pay" means a
266written offer signed by the insurer or its legal representative
267and delivered to the policyholder within 10 days after the
268insurer receives notice that a request for neutral evaluation
269has been made under this section.
270     (15)  If the policyholder declines to participate in
271neutral evaluation requested by the insurer or declines to
272resolve the matter in accordance with the recommendation of the
273neutral evaluator pursuant to this section, the insurer is not
274liable for attorney's fees under s. 627.428 or other provisions
275of the insurance code or for extra-contractual damages related
276to a claim for a sinkhole loss.
277     Section 25.  Subsection (2) of section 877.02, Florida
278Statutes, is amended to read:
279     877.02  Solicitation of legal services or retainers
280therefor; penalty.--
281     (2)  It shall be unlawful for any person in the employ of
282or in any capacity attached to any hospital, sanitarium, police
283department, wrecker service or garage, prison or court, or for a
284person authorized to furnish bail bonds, investigators,
285photographers, insurance or public adjusters, or for a general
286or other contractor as defined in s. 489.105 or other business
287providing sinkhole remediation services, to communicate directly
288or indirectly with any attorney or person acting on said
289attorney's behalf for the purpose of aiding, assisting or
290abetting such attorney in the solicitation of legal business or
291the procurement through solicitation of a retainer, written or
292oral, or any agreement authorizing the attorney to perform or
293render legal services.
294
295======== T I T L E  A M E N D M E N T ========
296     Remove line(s) 4740-4741 and insert:
297emergency rules; amending s. 627.706, F.S.; allowing a
298deductible amount applicable to sinkhole losses in a
299policy for residential property insurance; providing
300requirements for rejection of sinkhole insurance coverage;
301amending s. 627.707, F.S.; revising references to certain
302engineers; authorizing insurers to make direct payment for
303certain repairs; excluding insurers from liability for
304repairs under certain circumstances; amending s. 627.7072,
305F.S.; revising references to certain engineers;
306eliminating the requirement for certain testing
307compliance; amending s. 627.7073, F.S.; revising
308requirements for sinkhole reports by professional
309engineers and professional geologists; providing for the
310recording of sinkhole reports by the clerk of court rather
311than the property appraiser; creating s. 627.7074, F.S.;
312prescribing an alternative method for resolving disputed
313sinkhole insurance claims; providing definitions;
314prescribing procedures for invoking the alternative
315method; providing that a recommendation by a neutral
316evaluator is not binding on any party; providing for
317payments of costs; requiring the insurer to pay attorney's
318fees of the policyholder up to a specified amount under
319certain conditions; providing that an insurer is not
320liable for attorney's fees or for certain damages under
321certain conditions; amending s. 877.02, F.S.; prohibiting
322certain solicitations by contractors and other persons
323providing sinkhole remediation services; providing
324penalties; amending s. 627.727, F.S.; correcting a cross-


CODING: Words stricken are deletions; words underlined are additions.