| 1 | A bill to be entitled |
| 2 | An act relating to insurance; creating s. 627.4141, F.S.; |
| 3 | authorizing insurers to issue life insurance policies |
| 4 | containing a mandatory binding arbitration provision; |
| 5 | specifying requirements for arbitration provisions; |
| 6 | authorizing such provisions to contain other dispute |
| 7 | resolution provisions; requiring insurers to provide |
| 8 | applicants for policies containing a mandatory binding |
| 9 | arbitration provision a disclosure statement; providing |
| 10 | requirements for disclosure statements; specifying absence |
| 11 | of prohibition against using alternative mandatory binding |
| 12 | arbitration in certain insurance policies; providing an |
| 13 | effective date. |
| 14 |
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| 15 | Be It Enacted by the Legislature of the State of Florida: |
| 16 |
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| 17 | Section 1. Section 627.4141, Florida Statutes, is created |
| 18 | to read: |
| 19 | 627.4141 Mandatory arbitration clauses permitted.-- |
| 20 | (1) In order to facilitate the fair, prompt, economical, |
| 21 | and efficient resolution of disputes, an insurer may deliver or |
| 22 | issue for delivery to residents of this state a life insurance |
| 23 | policy, including group life and certificates of coverage, with |
| 24 | a death benefit of $50,000 or less, which contains a provision |
| 25 | requiring the resolution of claims or disputes involving the |
| 26 | insurance policy through the use of mandatory binding |
| 27 | arbitration, provided such provision complies with the |
| 28 | requirements of this section. |
| 29 | (2) The arbitration provision shall be set forth in the |
| 30 | policy or a separate endorsement and shall provide: |
| 31 | (a) A description of the arbitration process. |
| 32 | (b) A reasonable method for the selection of an impartial |
| 33 | arbitrator and, if the parties cannot agree upon an arbitrator |
| 34 | within 30 days after the demand for arbitration, the appointment |
| 35 | of an impartial arbitrator by the American Arbitration |
| 36 | Association or a similar organization. |
| 37 | (c) For payment by the insurer of the fees and expenses of |
| 38 | the arbitrator and administrative expenses of the arbitration. |
| 39 | (d) For commencement of the arbitration hearing within 90 |
| 40 | days after the commencement of the arbitration process and for |
| 41 | the rendering of the decision within 30 days thereafter unless |
| 42 | waived by the person initiating the arbitration. |
| 43 | (e) That the arbitration hearing be conducted in the |
| 44 | county of residence of the person demanding arbitration unless |
| 45 | the parties agree to a different location. |
| 46 | (f) That the arbitrator apply the arbitration rules, |
| 47 | applicable policy provisions, and applicable law. |
| 48 | (g) That the insurer provide a method of obtaining the |
| 49 | rules governing the arbitration without cost to the insured. |
| 50 | (3) The arbitration provision may contain other reasonable |
| 51 | provisions consistent with the fair, prompt, economical, and |
| 52 | efficient resolution of disputes. |
| 53 | (4) At the time of the application for a policy or |
| 54 | endorsement containing a mandatory arbitration clause, the |
| 55 | insurer shall provide an applicant a separate disclosure |
| 56 | statement which the applicant shall sign and which, in clear and |
| 57 | prominent language, displayed in 12-point type, capitalized, and |
| 58 | in bold print, discloses the following, where applicable: |
| 59 | (a) The policy contains a binding arbitration agreement |
| 60 | which requires that all disputes related to the policy must be |
| 61 | resolved through binding arbitration rather than in a court of |
| 62 | law. |
| 63 | (b) The results of the arbitration are binding on the |
| 64 | insured and the insurer. |
| 65 | (c) The arbitrator, who is independent and neutral, will |
| 66 | render a decision after listening to the positions of the |
| 67 | parties. |
| 68 | (d) Generally, courts are unwilling to review and change |
| 69 | decisions arising from binding arbitration. |
| 70 | (e) By accepting the insurance policy containing the |
| 71 | mandatory arbitration provision, the insured agrees to resolve |
| 72 | all disputes related to the policy through arbitration rather |
| 73 | than a court and the insured waives all rights to a trial by |
| 74 | jury. |
| 75 | (5) This section does not prohibit the use of mandatory |
| 76 | binding arbitration in insurance policies not described in this |
| 77 | section. |
| 78 | Section 2. This act shall take effect July 1, 2006. |