Florida Senate - 2011                                    SB 1592
       By Senator Thrasher
       8-01452B-11                                           20111592__
    1                        A bill to be entitled                      
    2         An act relating to civil remedies against insurers;
    3         amending s. 624.155, F.S.; revising provisions
    4         relating to civil actions against insurers; providing
    5         a definition; revising the grounds for bringing an
    6         action based on the insurer’s failure to accept an
    7         offer to settle within policy limits; providing who
    8         may bring such an action; providing requirements for
    9         bringing such an action; providing for the release of
   10         an insured if the insurer offers to settle a third
   11         party claim within a specified time under certain
   12         circumstances; providing that the insurer has an
   13         affirmative defense if a third-party claimant or the
   14         insured fails to cooperate with the insurer; providing
   15         that an insurer is not liable for two or more claims
   16         that exceed the policy limits if it files an
   17         interpleader action or makes the policy limits
   18         available under arbitration; specifying responsibility
   19         for the payment of liens; providing that an insurer is
   20         not liable for amounts in excess of the policy limits
   21         if it makes timely payment of the appraisal amount;
   22         providing that certain refusals to act by the insurer
   23         are not presumptive evidence of bad faith; revising
   24         requirements relating to the preaction notice of a
   25         civil action sent to the Department of Financial
   26         Regulation and the insurer; specifying work-product
   27         protection requirements; prohibiting an award of fees
   28         and costs from including any form of multiplier or
   29         enhancement; providing that the provisions of the act
   30         replace the common law; amending s. 627.311, F.S.;
   31         conforming a cross-reference; deleting an obsolete
   32         provision; amending s. 627.727, F.S.; revising and
   33         limiting the damages that are recoverable from an
   34         uninsured motorist carrier in a civil action;
   35         providing for severability; providing an effective
   36         date.
   38  Be It Enacted by the Legislature of the State of Florida:
   40         Section 1. Section 624.155, Florida Statutes, is amended to
   41  read:
   42         624.155 Civil remedy.—
   43         (1) As used in the section, the term “third-party claim”
   44  means a claim against an insured, by one other than the insured,
   45  on account of harm or damage allegedly caused by an insured and
   46  covered by a policy of liability insurance.
   47         (2)(1) Any person may bring a civil action against an
   48  insurer if when such person is damaged:
   49         (a) By the insurer’s a violation of any of the following
   50  provisions by the insurer:
   51         1. Section 626.9541(1)(i), (o), or (x);
   52         2. Section 626.9551;
   53         3. Section 626.9705;
   54         4. Section 626.9706;
   55         5. Section 626.9707; or
   56         6. Section 627.7283.
   57         (b) By the insurer’s commission of any of the following
   58  acts by the insurer:
   59         1. Acting in gross disregard of the insured’s interest by
   60  failing to accept a Not attempting in good faith written demand
   61  to settle claims within the policy limits if when, under all the
   62  circumstances existing at the relevant time, it could and should
   63  have done so, had it acted fairly and honestly toward its
   64  insured and with due regard for her or his interests;
   65         2. Making claims payments to insureds or beneficiaries not
   66  accompanied by a statement setting forth the coverage under
   67  which payments are being made; or
   68         3. Except as to liability coverages, failing to promptly
   69  settle claims, when the obligation to settle a claim has become
   70  reasonably clear, under one portion of the insurance policy
   71  coverage in order to influence settlements under other portions
   72  of the insurance policy coverage.
   74  Notwithstanding the provisions of the above to the contrary, a
   75  person pursuing a remedy under this section need not prove that
   76  such act was committed or performed with such frequency as to
   77  indicate a general business practice.
   78         (3) If a civil action is brought against an insurer
   79  pursuant to subparagraph (2)(b)1.:
   80         (a) Only an insured or the insured’s assignee may bring
   81  such an action.
   82         (b) With respect to a third-party claim, an insurer does
   83  not violate the duty set forth in subparagraph (2)(b)1. if the
   84  third-party claimant does not provide a demand to settle which:
   85         1. Is in writing, signed by the third-party claimant or the
   86  claimant’s authorized representative, and delivered to the
   87  insurer and the insured;
   88         2. States that it is a demand to settle made pursuant to
   89  this section;
   90         3. States a specified amount within the insured’s policy
   91  limits for which the third-party claimant offers to settle its
   92  claim in full and to release the insured from liability;
   93         4. Is limited to one claimant and one line of coverage or,
   94  if not so limited, separately designates a demand for each
   95  claimant and each line of coverage, each of which may be
   96  accepted independently;
   97         5. Is submitted by a person having the legal authority to
   98  accept payment and to execute the release;
   99         6. Does not contain any conditions for acceptance other
  100  than payment of the specific amount demanded and compliance with
  101  the disclosure requirements of s. 627.4137; and
  102         7. Includes a detailed explanation of the coverage and
  103  liability issues and the facts giving rise to the claim,
  104  including an explanation of injuries and damages claimed; the
  105  names of known witnesses; and a listing and copy, if available,
  106  of relevant documents, including medical records, which are
  107  available to the third-party claimant or authorized
  108  representative at the time of the demand to settle. The third
  109  party claimant and his or her representatives have a continuing
  110  duty to supplement this information as it becomes available.
  111         (c) With respect to a third-party claim, an insurer does
  112  not violate the duty set forth in subparagraph (2)(b)1. if,
  113  within 60 days after the insurer’s receipt of the third-party
  114  claimant’s written demand to settle, or within 90 days after the
  115  insurer’s receipt of the notice of the claim, whichever is
  116  later, the insurer offers to pay the lesser of:
  117         1. The amount requested in the third-party claimant’s
  118  written demand to settle; or
  119         2. The insured’s policy limits, in exchange for a release
  120  of liability.
  121         (d) An insurer has an affirmative defense to any such
  122  action if the third-party claimant, the insured, or their
  123  representatives fail to fully cooperate in providing all
  124  relevant information and in presenting the claim.
  125         (4) Notwithstanding subsection (3), if two or more third
  126  party claimants make competing claims arising out of a single
  127  occurrence, which in total exceed the available policy limits of
  128  one or more of the insured parties who may be liable to the
  129  third-party claimants, an insurer is not liable beyond the
  130  available policy limits for failure to pay all or any portion of
  131  the available policy limits to one or more of the third-party
  132  claimants if, within 90 days after receiving notice of the
  133  competing claims in excess of the available policy limits, the
  134  insurer:
  135         (a)Files an interpleader action under the Florida Rules of
  136  Civil Procedure. If the claims of the competing third-party
  137  claimants are found to be in excess of the policy limits, the
  138  third-party claimants are entitled to a prorated share of the
  139  policy limits as determined by the trier of fact. An insurer’s
  140  interpleader action does not alter or amend the insurer’s
  141  obligation to defend its insured; or
  142         (b)Pursuant to binding arbitration, makes the entire
  143  amount of the policy limits available for payment to the
  144  competing third-party claimants before a qualified arbitrator
  145  selected by the insurer at the expense of the insurer. The
  146  third-party claimants are entitled to a prorated share of the
  147  policy limits as determined by the arbitrator, who shall
  148  consider the comparative fault, if any, of each third-party
  149  claimant, and the total likely outcome at trial based upon the
  150  total of the economic and noneconomic damages submitted to the
  151  arbitrator for consideration. A third-party claimant whose claim
  152  is resolved by the arbitrator shall execute and deliver a
  153  general release to the insured party whose claim is resolved by
  154  the proceeding.
  155         (5) After settlement of a third-party claim, the third
  156  party claimant’s attorney is responsible for the satisfaction of
  157  any liens from the settlement funds to the extent such
  158  settlement funds are sufficient. If the third-party claimant is
  159  not represented by counsel, the third-party claimant shall
  160  provide the insurer with a written accounting of all outstanding
  161  liens.
  162         (6) An insurer is not liable for amounts in excess of the
  163  policy limits or of the award, whichever is less, if it makes
  164  timely payment of an appraisal award.
  165         (7) The fact that the insurer does not accept a demand to
  166  settle or offer policy limits under paragraph (3)(c), pay an
  167  appraisal award under subsection (6), or file an interpleader
  168  action or make policy limits available for arbitration under
  169  subsection (4) during the times specified does not give rise to
  170  a presumption that the insurer acted in bad faith.
  171         (8)(2) Any party may bring a civil action against an
  172  unauthorized insurer if such party is damaged by a violation of
  173  s. 624.401 by the unauthorized insurer.
  174         (9)(3)(a)Except for an action relating to a third-party
  175  claim, as a condition precedent to bringing an action under this
  176  section, the department and the authorized insurer must be have
  177  been given 60 days’ written notice of the violation. If the
  178  department returns a notice for lack of specificity, the 60-day
  179  time period does shall not begin until a proper notice is filed.
  180         (a)(b) The notice shall be on a form provided by the
  181  department, sent by certified mail to the claim handler if known
  182  or, if unknown, to the specific office handling the claim, and
  183  shall state with specificity the following information, and such
  184  other information as the department may require:
  185         1. The statutory provision, including the specific language
  186  of the statute, which the authorized insurer allegedly violated.
  187         2. The facts and circumstances reasonably known to the
  188  insurer giving rise to the violation, stated with specificity,
  189  and the corrective action that the insurer needs to take to
  190  remedy the alleged violation.
  191         3. The name of any individual involved in the violation.
  192         4. Reference to specific policy language that is relevant
  193  to the violation, if any. If the person bringing the civil
  194  action is a third party claimant, she or he shall not be
  195  required to reference the specific policy language if the
  196  authorized insurer has not provided a copy of the policy to the
  197  third party claimant pursuant to written request.
  198         5. A statement that the notice is given in order to perfect
  199  the right to pursue the civil remedy authorized by this section.
  200         6. Such other information as the department may require.
  201         (b)(c) Within 20 days after of receipt of the notice, the
  202  department may return any notice that does not provide the
  203  specific information required by this section, and the
  204  department shall indicate the specific deficiencies contained in
  205  the notice. A determination by the department to return a notice
  206  for lack of specificity is shall be exempt from the requirements
  207  of chapter 120.
  208         (c)(d) No action shall lie if, within 60 days after filing
  209  notice, the damages are paid or the circumstances giving rise to
  210  the violation are corrected.
  211         (d)(e) The authorized insurer that is the recipient of the
  212  a notice must filed pursuant to this section shall report to the
  213  department on the disposition of the alleged violation.
  214         (e)(f) The applicable statute of limitations for an action
  215  under this section is shall be tolled for a period of 65 days by
  216  the mailing of the notice required by this subsection or the
  217  mailing of a subsequent notice required by this subsection.
  218         (10) With respect to:
  219         (a) A first-party claim, the insurer does not owe a
  220  fiduciary duty to the insured and retains the right to protect
  221  materials covered by the work-product privilege found within the
  222  claim processing file. The privilege must yield to inspection if
  223  an appropriate showing is made under the Florida Rules of Civil
  224  Procedure. The attorney-client privilege remains absolute.
  225         (b)A third-party claim, until a claim or action for
  226  payment on a policy of insurance is final, all files of an
  227  insurer, including papers, communications, investigatory
  228  reports, or other documents in the insurer’s files are the
  229  insurer’s work product and immune from production or discovery.
  230  Thereafter, discovery shall be determined in accordance with the
  231  Florida Rules of Civil Procedure. Communications between an
  232  insurer and its counsel which are protected under s. 90.502
  233  remain protected.
  234         (11)(4) Upon adverse adjudication at trial or upon appeal,
  235  the authorized insurer is shall be liable for damages, together
  236  with court costs and reasonable attorney’s fees incurred by the
  237  plaintiff. An award of fees and costs may not include any form
  238  of multiplier or enhancement.
  239         (12)(5)No Punitive damages may not shall be awarded under
  240  this section unless the acts giving rise to the violation occur
  241  with such frequency as to indicate a general business practice
  242  and these acts are:
  243         (a) Willful, wanton, and malicious;
  244         (b) In reckless disregard for the rights of any insured; or
  245         (c) In reckless disregard for the rights of a beneficiary
  246  under a life insurance contract.
  248  Any person who pursues a claim under this subsection must shall
  249  post in advance the costs of discovery. Such costs shall be
  250  awarded to the authorized insurer if no punitive damages are not
  251  awarded to the plaintiff.
  252         (13)(6) This section does shall not be construed to
  253  authorize a class action suit against an authorized insurer or a
  254  civil action against the commission, the office, or the
  255  department or any of their employees, or to create a cause of
  256  action if when an authorized health insurer refuses to pay a
  257  claim for reimbursement on the ground that the charge for a
  258  service was unreasonably high or that the service provided was
  259  not medically necessary.
  260         (14)(7)In the absence of expressed language to the
  261  contrary, This section does shall not be construed to authorize
  262  a civil action or create a cause of action against an authorized
  263  insurer or its employees who, in good faith, release information
  264  about an insured or an insurance policy to a law enforcement
  265  agency in furtherance of an investigation of a criminal or
  266  fraudulent act relating to a motor vehicle theft or a motor
  267  vehicle insurance claim.
  268         (15) The civil remedies specified in this section are the
  269  sole remedies and causes of action for extracontractual damages
  270  for bad-faith failure to settle under an insurance contract. Any
  271  related common-law causes of action are replaced and superseded
  272  by this section. The provisions of this section apply to all
  273  cases brought pursuant to this section unless specifically
  274  controlled by s. 766.1185.
  275         (8) The civil remedy specified in this section does not
  276  preempt any other remedy or cause of action provided for
  277  pursuant to any other statute or pursuant to the common law of
  278  this state. Any person may obtain a judgment under either the
  279  common-law remedy of bad faith or this statutory remedy, but
  280  shall not be entitled to a judgment under both remedies. This
  281  section shall not be construed to create a common-law cause of
  282  action. The damages recoverable pursuant to this section shall
  283  include those damages which are a reasonably foreseeable result
  284  of a specified violation of this section by the authorized
  285  insurer and may include an award or judgment in an amount that
  286  exceeds the policy limits.
  287         (16)(9) A surety issuing a payment or performance bond on
  288  the construction or maintenance of a building or roadway project
  289  is not an insurer for purposes of subsection (2) (1).
  290         Section 2. Paragraph (k) of subsection (3) of section
  291  627.311, Florida Statutes, is amended to read:
  292         627.311 Joint underwriters and joint reinsurers; public
  293  records and public meetings exemptions.—
  294         (3) The office may, after consultation with insurers
  295  licensed to write automobile insurance in this state, approve a
  296  joint underwriting plan for purposes of equitable apportionment
  297  or sharing among insurers of automobile liability insurance and
  298  other motor vehicle insurance, as an alternate to the plan
  299  required in s. 627.351(1). All insurers authorized to write
  300  automobile insurance in this state shall subscribe to the plan
  301  and participate therein. The plan shall be subject to continuous
  302  review by the office which may at any time disapprove the entire
  303  plan or any part thereof if it determines that conditions have
  304  changed since prior approval and that in view of the purposes of
  305  the plan changes are warranted. Any disapproval by the office
  306  shall be subject to the provisions of chapter 120. The Florida
  307  Automobile Joint Underwriting Association is created under the
  308  plan. The plan and the association:
  309         (k)1. Shall have no liability, and no cause of action of
  310  any nature shall arise against any member insurer or its agents
  311  or employees, agents or employees of the association, members of
  312  the board of governors of the association, the Chief Financial
  313  Officer, or the office or its representatives for any action
  314  taken by them in the performance of their duties or
  315  responsibilities under this subsection. Such immunity does not
  316  apply to actions for or arising out of a breach of any contract
  317  or agreement pertaining to insurance, or any willful tort.
  318         2. Notwithstanding the requirements of s. 624.155(3)(a), as
  319  a condition precedent to bringing an action against the plan
  320  under s. 624.155, the department and the plan must have been
  321  given 90 days’ written notice of the violation. If the
  322  department returns a notice for lack of specificity, the 90-day
  323  time period shall not begin until a proper notice is filed. This
  324  notice must comply with the information requirements of s.
  325  624.155(3)(b). Effective October 1, 2007, this subparagraph
  326  shall expire unless reenacted by the Legislature prior to that
  327  date.
  328         Section 3. Subsection (10) of section 627.727, Florida
  329  Statutes, is amended to read:
  330         627.727 Motor vehicle insurance; uninsured and underinsured
  331  vehicle coverage; insolvent insurer protection.—
  332         (10) The damages recoverable from an uninsured motorist
  333  carrier in an action brought under s. 624.155 shall include the
  334  total amount of the claimant’s damages, including the amount in
  335  excess of the policy limits but not exceeding two times the
  336  policy limits, any interest on unpaid benefits, and reasonable
  337  attorney’s fees and costs, and any damages caused by a violation
  338  of a law of this state. The total amount of the claimant’s
  339  damages is recoverable whether caused by an insurer or by a
  340  third-party tortfeasor.
  341         Section 4. If any provision of this act or its application
  342  to any person or circumstance is held invalid, the invalidity
  343  does not affect other provisions or applications of the act
  344  which can be given effect without the invalid provision or
  345  application, and to this end the provisions of this act are
  346  severable.
  347         Section 5. This act shall take effect July 1, 2011.