Florida Senate - 2011                        COMMITTEE AMENDMENT
       Bill No. SB 1592
                                Barcode 128480                          
                              LEGISLATIVE ACTION                        
                    Senate             .             House              
                  Comm: RCS            .                                
                  03/22/2011           .                                

       The Committee on Judiciary (Thrasher) recommended the following:
    1         Senate Amendment (with title amendment)
    3         Delete everything after the enacting clause
    4  and insert:
    5         Section 1. Section 624.155, Florida Statutes, is amended to
    6  read:
    7         624.155 Civil remedy.—
    8         (1) Any person may bring a civil action against an insurer
    9  if when such person is damaged:
   10         (a) By the insurer’s a violation of any of the following
   11  provisions by the insurer:
   12         1. Section 626.9541(1)(i), (o), or (x);
   13         2. Section 626.9551;
   14         3. Section 626.9705;
   15         4. Section 626.9706;
   16         5. Section 626.9707; or
   17         6. Section 627.7283.
   18         (b) By the insurer’s commission of any of the following
   19  acts by the insurer:
   20         1. Acting arbitrarily and contrary to the insured’s
   21  interests in failing Not attempting in good faith to settle
   22  claims within the policy limits if when, under all the
   23  circumstances existing at the relevant time, it could and should
   24  have done so, had it acted fairly and honestly toward its
   25  insured and with due regard for her or his interests;
   26         2. Making claims payments to insureds or beneficiaries not
   27  accompanied by a statement setting forth the coverage under
   28  which payments are being made; or
   29         3. Except as to liability coverages, failing to promptly
   30  settle claims, when the obligation to settle a claim has become
   31  reasonably clear, under one portion of the insurance policy
   32  coverage in order to influence settlements under other portions
   33  of the insurance policy coverage.
   35  Notwithstanding the provisions of the above to the contrary, a
   36  person pursuing a remedy under this section need not prove that
   37  such act was committed or performed with such frequency as to
   38  indicate a general business practice.
   39         (2) If a civil action is brought against an insurer
   40  pursuant to subparagraph (1)(b)1., or based on a common law
   41  claim for a bad faith failure to settle:
   42         (a) Only an insured or the insured’s assignee may bring
   43  such action.
   44         (b) With respect to a third-party claim, an insurer does
   45  not violate the duty to attempt in good faith to settle on
   46  behalf of its insured if the third-party claimant does not
   47  provide a demand to settle which:
   48         1. Is in writing, signed by the third-party claimant or the
   49  claimant’s authorized representative, and delivered to the
   50  insurer and the insured;
   51         2. States a specified amount within the insured’s policy
   52  limits for which the third-party claimant offers to settle its
   53  claim in full and to release the insured from liability;
   54         3. Is limited to one claimant and one line of coverage or,
   55  if not so limited, separately designates a demand for each
   56  claimant and each line of coverage, each of which may be
   57  accepted independently;
   58         4. Is submitted by a person having the legal authority to
   59  accept payment and to execute the release;
   60         5. Does not contain any conditions for acceptance other
   61  than payment of the specific amount demanded and compliance with
   62  the disclosure requirements of s. 627.4137; and
   63         6. Includes a detailed explanation of the coverage and
   64  liability issues and the facts giving rise to the claim,
   65  including an explanation of injuries and damages claimed; the
   66  names of known witnesses; and a listing and copy, if available,
   67  of relevant documents, including medical records, which are
   68  available to the third-party claimant or authorized
   69  representative at the time of the demand to settle. The third
   70  party claimant and his or her representatives have a continuing
   71  duty to supplement this information as it becomes available.
   72         (c) With respect to a third-party claim, an insured does
   73  not violate the duty to attempt in good faith to settle on
   74  behalf of its insured if, within 60 days after the notice of
   75  claim, 60 days after the insurer’s receipt of the third-party
   76  claimant’s written demand to settle, or 30 days after the
   77  accident or incident giving rise to the claim, whichever is
   78  later, the insurer offers to pay the lesser of:
   79         1. The amount requested in the third-party claimant’s
   80  written demand to settle; or
   81         2. The insured’s policy limits, in exchange for a release
   82  of liability.
   83         (d) An insurer has an affirmative defense to any such
   84  action if the third-party claimant, the insured, or their
   85  representatives fail to fully cooperate in providing all
   86  relevant information and in presenting the claim.
   87         (3) Notwithstanding statutory or common law requirements,
   88  if two or more third-party claimants make competing claims
   89  arising out of a single occurrence, which in total exceed the
   90  available policy limits of one or more of the insured parties
   91  who may be liable to the third-party claimants, an insurer is
   92  not liable beyond the available policy limits for failure to pay
   93  all or any portion of the available policy limits to one or more
   94  of the third-party claimants if, within 90 days after receiving
   95  notice of the competing claims in excess of the available policy
   96  limits, the insurer:
   97         (a)Files an interpleader action under the Florida Rules of
   98  Civil Procedure. If the claims of the competing third-party
   99  claimants are found to be in excess of the policy limits, the
  100  third-party claimants are entitled to a prorated share of the
  101  policy limits as determined by the trier of fact. An insurer’s
  102  interpleader action does not alter or amend the insurer’s
  103  obligation to defend its insured; or
  104         (b)Pursuant to binding arbitration agreed to by all
  105  parties, makes the entire amount of the policy limits available
  106  for payment to the competing third-party claimants before a
  107  qualified arbitrator selected by the insurer at the expense of
  108  the insurer. The third-party claimants are entitled to a
  109  prorated share of the policy limits as determined by the
  110  arbitrator, who shall consider the comparative fault, if any, of
  111  each third-party claimant, and the total likely outcome at trial
  112  based upon the total of the economic and noneconomic damages
  113  submitted to the arbitrator for consideration. A third-party
  114  claimant whose claim is resolved by the arbitrator shall execute
  115  and deliver a general release to the insured party whose claim
  116  is resolved by the proceeding.
  117         (4) After settlement of a third-party claim, the third
  118  party claimant’s attorney is responsible for the satisfaction of
  119  any liens from the settlement funds to the extent such
  120  settlement funds are sufficient. If the third-party claimant is
  121  not represented by counsel, the third-party claimant shall
  122  provide the insurer with a written accounting of all outstanding
  123  liens.
  124         (5) An insurer is not liable for amounts in excess of the
  125  policy limits or of the award, whichever is less, if it makes
  126  timely payment of an appraisal award.
  127         (6) The fact that the insurer does not accept a demand to
  128  settle or offer policy limits under paragraph (2)(c), pay an
  129  appraisal award under subsection (5), or file an interpleader
  130  action or make policy limits available for arbitration under
  131  subsection (3) during the times specified does not give rise to
  132  a presumption that the insurer acted in bad faith.
  133         (7)(2) Any party may bring a civil action against an
  134  unauthorized insurer if such party is damaged by a violation of
  135  s. 624.401 by the unauthorized insurer.
  136         (8)(3)(a)Except for an action relating to a third-party
  137  claim, as a condition precedent to bringing an action under this
  138  section, the department and the authorized insurer must be have
  139  been given 60 days’ written notice of the violation. If the
  140  department returns a notice for lack of specificity, the 60-day
  141  time period does shall not begin until a proper notice is filed.
  142         (a)(b) The notice shall be on a form provided by the
  143  department, sent by certified mail to the claim handler if known
  144  or, if unknown, to the specific office handling the claim, and
  145  shall state with specificity the following information, and such
  146  other information as the department may require:
  147         1. The statutory provision, including the specific language
  148  of the statute, which the authorized insurer allegedly violated.
  149         2. The facts and circumstances reasonably known to the
  150  insurer giving rise to the violation, stated with specificity,
  151  and the corrective action that the insurer needs to take to
  152  remedy the alleged violation.
  153         3. The name of any individual involved in the violation.
  154         4. Reference to specific policy language that is relevant
  155  to the violation, if any. If the person bringing the civil
  156  action is a third party claimant, she or he shall not be
  157  required to reference the specific policy language if the
  158  authorized insurer has not provided a copy of the policy to the
  159  third party claimant pursuant to written request.
  160         5. A statement that the notice is given in order to perfect
  161  the right to pursue the civil remedy authorized by this section.
  162         6. Such other information as the department may require.
  163         (b)(c) Within 20 days after of receipt of the notice, the
  164  department may return any notice that does not provide the
  165  specific information required by this section, and the
  166  department shall indicate the specific deficiencies contained in
  167  the notice. A determination by the department to return a notice
  168  for lack of specificity is shall be exempt from the requirements
  169  of chapter 120.
  170         (c)(d) No action shall lie if, within 60 days after filing
  171  notice, the damages are paid or the circumstances giving rise to
  172  the violation are corrected.
  173         (d)(e) The authorized insurer that is the recipient of the
  174  a notice must filed pursuant to this section shall report to the
  175  department on the disposition of the alleged violation.
  176         (e)(f) The applicable statute of limitations for an action
  177  under this section is shall be tolled for a period of 65 days by
  178  the mailing of the notice required by this subsection or the
  179  mailing of a subsequent notice required by this subsection.
  180         (9)(4) Upon adverse adjudication at trial or upon appeal,
  181  the authorized insurer is shall be liable for damages, together
  182  with court costs and reasonable attorney’s fees incurred by the
  183  plaintiff.
  184         (10)(5)No Punitive damages may not shall be awarded under
  185  this section unless the acts giving rise to the violation occur
  186  with such frequency as to indicate a general business practice
  187  and these acts are:
  188         (a) Willful, wanton, and malicious;
  189         (b) In reckless disregard for the rights of any insured; or
  190         (c) In reckless disregard for the rights of a beneficiary
  191  under a life insurance contract.
  193  Any person who pursues a claim under this subsection must shall
  194  post in advance the costs of discovery. Such costs shall be
  195  awarded to the authorized insurer if no punitive damages are not
  196  awarded to the plaintiff.
  197         (11)(6) This section does shall not be construed to
  198  authorize a class action suit against an authorized insurer or a
  199  civil action against the commission, the office, or the
  200  department or any of their employees, or to create a cause of
  201  action if when an authorized health insurer refuses to pay a
  202  claim for reimbursement on the ground that the charge for a
  203  service was unreasonably high or that the service provided was
  204  not medically necessary.
  205         (12)(7)In the absence of expressed language to the
  206  contrary, This section does shall not be construed to authorize
  207  a civil action or create a cause of action against an authorized
  208  insurer or its employees who, in good faith, release information
  209  about an insured or an insurance policy to a law enforcement
  210  agency in furtherance of an investigation of a criminal or
  211  fraudulent act relating to a motor vehicle theft or a motor
  212  vehicle insurance claim.
  213         (13)(8) The civil remedy specified in this section does not
  214  preempt any other remedy or cause of action provided for
  215  pursuant to any other statute or pursuant to the common law of
  216  this state. The legal standard established in subsection
  217  (1)(b)(1) and the provisions of subsections (2)-(6) apply
  218  equally and without limitation or exception to all common law
  219  remedies and causes of action for bad faith failure to settle,
  220  regardless of legal theory, and to actions brought pursuant to
  221  this section. To prevent circumvention of this section by resort
  222  to common-law causes of action, all prior judicial decisions
  223  inconsistent with the provisions of this section are
  224  disapproved. These include, but are expressly not limited to,
  225  Macola v. Gov’t Employees Ins. Co., 953 So.2d 451, 457 (Fla.
  226  2006), Berges v. Infinity Ins. Co., 896 So.2d 665, 668 (Fla.
  227  2004), and Powell v. Prudential Property & Cas. Ins. Co., 584
  228  So.2d 12 (Fla. 3rd DCA, 1991). Any person may obtain a judgment
  229  under either the common-law remedy for of bad faith or this
  230  statutory remedy, but is shall not be entitled to a judgment
  231  under both remedies. This section does shall not be construed to
  232  create a common-law cause of action. The damages recoverable
  233  pursuant to this section shall include those damages that which
  234  are a reasonably foreseeable result of a specified violation of
  235  this section by the authorized insurer and may include an award
  236  or judgment in an amount that exceeds the policy limits.
  237         (14)(9) A surety issuing a payment or performance bond on
  238  the construction or maintenance of a building or roadway project
  239  is not an insurer for purposes of subsection (1).
  240         (15) As used in the section, the term “third-party claim”
  241  means a claim against an insured, by one other than the insured,
  242  on account of harm or damage allegedly caused by an insured and
  243  covered by a policy of liability insurance.
  244         Section 2. Paragraph (k) of subsection (3) of section
  245  627.311, Florida Statutes, is amended to read:
  246         627.311 Joint underwriters and joint reinsurers; public
  247  records and public meetings exemptions.—
  248         (3) The office may, after consultation with insurers
  249  licensed to write automobile insurance in this state, approve a
  250  joint underwriting plan for purposes of equitable apportionment
  251  or sharing among insurers of automobile liability insurance and
  252  other motor vehicle insurance, as an alternate to the plan
  253  required in s. 627.351(1). All insurers authorized to write
  254  automobile insurance in this state shall subscribe to the plan
  255  and participate therein. The plan shall be subject to continuous
  256  review by the office, which may at any time disapprove the
  257  entire plan or any part thereof if it determines that conditions
  258  have changed since prior approval and that in view of the
  259  purposes of the plan changes are warranted. Any disapproval by
  260  the office shall be subject to the provisions of chapter 120.
  261  The Florida Automobile Joint Underwriting Association is created
  262  under the plan. The plan and the association:
  263         (k)1. Shall have no liability, and no cause of action of
  264  any nature shall arise against any member insurer or its agents
  265  or employees, agents or employees of the association, members of
  266  the board of governors of the association, the Chief Financial
  267  Officer, or the office or its representatives for any action
  268  taken by them in the performance of their duties or
  269  responsibilities under this subsection. Such immunity does not
  270  apply to actions for or arising out of a breach of any contract
  271  or agreement pertaining to insurance, or any willful tort.
  272         2. Notwithstanding the requirements of s. 624.155(3)(a), as
  273  a condition precedent to bringing an action against the plan
  274  under s. 624.155, the department and the plan must have been
  275  given 90 days’ written notice of the violation. If the
  276  department returns a notice for lack of specificity, the 90-day
  277  time period shall not begin until a proper notice is filed. This
  278  notice must comply with the information requirements of s.
  279  624.155(3)(b). Effective October 1, 2007, this subparagraph
  280  shall expire unless reenacted by the Legislature prior to that
  281  date.
  282         Section 3. If any provision of this act or its application
  283  to any person or circumstance is held invalid, the invalidity
  284  does not affect other provisions or applications of the act
  285  which can be given effect without the invalid provision or
  286  application, and to this end the provisions of this act are
  287  severable.
  288         Section 4. This act shall take effect July 1, 2011.
  290  ================= T I T L E  A M E N D M E N T ================
  291         And the title is amended as follows:
  292         Delete everything before the enacting clause
  293  and insert:
  294                        A bill to be entitled                      
  295         An act relating to civil remedies against insurers;
  296         amending s. 624.155, F.S.; revising provisions
  297         relating to civil actions against insurers; revising
  298         the grounds for bringing an action based on the
  299         insurer’s failure to accept an offer to settle within
  300         policy limits; providing who may bring such an action;
  301         providing requirements for bringing such an action;
  302         providing for the release of an insured if the insurer
  303         offers to settle a third-party claim within a
  304         specified time under certain circumstances; providing
  305         that the insurer has an affirmative defense if a
  306         third-party claimant or the insured fails to cooperate
  307         with the insurer; providing that an insurer is not
  308         liable for two or more claims that exceed the policy
  309         limits if it files an interpleader action or makes the
  310         policy limits available under arbitration; specifying
  311         responsibility for the payment of liens; providing
  312         that an insurer is not liable for amounts in excess of
  313         the policy limits if it makes timely payment of the
  314         appraisal amount; providing that certain refusals to
  315         act by the insurer are not presumptive evidence of bad
  316         faith; revising requirements relating to the preaction
  317         notice of a civil action sent to the Department of
  318         Financial Regulation and the insurer; providing for
  319         the relationship of the act to the common law and
  320         prior judicial decisions; providing a definition for
  321         “third-party claim”; amending s. 627.311, F.S.;
  322         conforming a cross-reference; deleting an obsolete
  323         provision; providing for severability; providing an
  324         effective date.