Florida Senate - 2011                             CS for SB 1592
       By the Committee on Judiciary; and Senator Thrasher
       590-02847A-11                                         20111592c1
    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; revising
    5         the grounds for bringing an action based on the
    6         insurer’s failure to accept an offer to settle within
    7         policy limits; providing who may bring such an action;
    8         providing requirements for bringing such an action;
    9         providing for the release of an insured if the insurer
   10         offers to settle a third-party claim within a
   11         specified time under certain circumstances; providing
   12         that the insurer has an affirmative defense if a
   13         third-party claimant or the insured fails to cooperate
   14         with the insurer; providing that an insurer is not
   15         liable for two or more claims that exceed the policy
   16         limits if it files an interpleader action or makes the
   17         policy limits available under arbitration; specifying
   18         responsibility for the payment of liens; providing
   19         that an insurer is not liable for amounts in excess of
   20         the policy limits if it makes timely payment of the
   21         appraisal amount; providing that certain refusals to
   22         act by the insurer are not presumptive evidence of bad
   23         faith; revising requirements relating to the preaction
   24         notice of a civil action sent to the Department of
   25         Financial Regulation and the insurer; providing for
   26         the relationship of the act to the common law and
   27         prior judicial decisions; providing a definition for
   28         “third-party claim”; amending s. 627.311, F.S.;
   29         conforming a cross-reference; deleting an obsolete
   30         provision; providing for severability; providing an
   31         effective date.
   33  Be It Enacted by the Legislature of the State of Florida:
   35         Section 1. Section 624.155, Florida Statutes, is amended to
   36  read:
   37         624.155 Civil remedy.—
   38         (1) Any person may bring a civil action against an insurer
   39  if when such person is damaged:
   40         (a) By the insurer’s a violation of any of the following
   41  provisions by the insurer:
   42         1. Section 626.9541(1)(i), (o), or (x);
   43         2. Section 626.9551;
   44         3. Section 626.9705;
   45         4. Section 626.9706;
   46         5. Section 626.9707; or
   47         6. Section 627.7283.
   48         (b) By the insurer’s commission of any of the following
   49  acts by the insurer:
   50         1. Acting arbitrarily and contrary to the insured’s
   51  interests in failing Not attempting in good faith to settle
   52  claims within the policy limits if when, under all the
   53  circumstances existing at the relevant time, it could and should
   54  have done so, had it acted fairly and honestly toward its
   55  insured and with due regard for her or his interests;
   56         2. Making claims payments to insureds or beneficiaries not
   57  accompanied by a statement setting forth the coverage under
   58  which payments are being made; or
   59         3. Except as to liability coverages, failing to promptly
   60  settle claims, when the obligation to settle a claim has become
   61  reasonably clear, under one portion of the insurance policy
   62  coverage in order to influence settlements under other portions
   63  of the insurance policy coverage.
   65  Notwithstanding the provisions of the above to the contrary, a
   66  person pursuing a remedy under this section need not prove that
   67  such act was committed or performed with such frequency as to
   68  indicate a general business practice.
   69         (2) If a civil action is brought against an insurer
   70  pursuant to subparagraph (1)(b)1., or based on a common law
   71  claim for a bad faith failure to settle:
   72         (a) Only an insured or the insured’s assignee may bring
   73  such action.
   74         (b) With respect to a third-party claim, an insurer does
   75  not violate the duty to attempt in good faith to settle on
   76  behalf of its insured if the third-party claimant does not
   77  provide a demand to settle which:
   78         1. Is in writing, signed by the third-party claimant or the
   79  claimant’s authorized representative, and delivered to the
   80  insurer and the insured;
   81         2. States a specified amount within the insured’s policy
   82  limits for which the third-party claimant offers to settle its
   83  claim in full and to release the insured from liability;
   84         3. Is limited to one claimant and one line of coverage or,
   85  if not so limited, separately designates a demand for each
   86  claimant and each line of coverage, each of which may be
   87  accepted independently;
   88         4. Is submitted by a person having the legal authority to
   89  accept payment and to execute the release;
   90         5. Does not contain any conditions for acceptance other
   91  than payment of the specific amount demanded and compliance with
   92  the disclosure requirements of s. 627.4137; and
   93         6. Includes a detailed explanation of the coverage and
   94  liability issues and the facts giving rise to the claim,
   95  including an explanation of injuries and damages claimed; the
   96  names of known witnesses; and a listing and copy, if available,
   97  of relevant documents, including medical records, which are
   98  available to the third-party claimant or authorized
   99  representative at the time of the demand to settle. The third
  100  party claimant and his or her representatives have a continuing
  101  duty to supplement this information as it becomes available.
  102         (c) With respect to a third-party claim, an insurer does
  103  not violate the duty to attempt in good faith to settle on
  104  behalf of its insured if, within 60 days after the notice of
  105  claim, 60 days after the insurer’s receipt of the third-party
  106  claimant’s written demand to settle, or 30 days after the
  107  accident or incident giving rise to the claim, whichever is
  108  later, the insurer offers to pay the lesser of:
  109         1. The amount requested in the third-party claimant’s
  110  written demand to settle; or
  111         2. The insured’s policy limits, in exchange for a release
  112  of liability.
  113         (d) An insurer has an affirmative defense to any such
  114  action if the third-party claimant, the insured, or their
  115  representatives fail to fully cooperate in providing all
  116  relevant information and in presenting the claim.
  117         (3) Notwithstanding statutory or common law requirements,
  118  if two or more third-party claimants make competing claims
  119  arising out of a single occurrence, which in total exceed the
  120  available policy limits of one or more of the insured parties
  121  who may be liable to the third-party claimants, an insurer is
  122  not liable beyond the available policy limits for failure to pay
  123  all or any portion of the available policy limits to one or more
  124  of the third-party claimants if, within 90 days after receiving
  125  notice of the competing claims in excess of the available policy
  126  limits, the insurer:
  127         (a)Files an interpleader action under the Florida Rules of
  128  Civil Procedure. If the claims of the competing third-party
  129  claimants are found to be in excess of the policy limits, the
  130  third-party claimants are entitled to a prorated share of the
  131  policy limits as determined by the trier of fact. An insurer’s
  132  interpleader action does not alter or amend the insurer’s
  133  obligation to defend its insured; or
  134         (b)Pursuant to binding arbitration agreed to by all
  135  parties, makes the entire amount of the policy limits available
  136  for payment to the competing third-party claimants before a
  137  qualified arbitrator selected by the insurer at the expense of
  138  the insurer. The third-party claimants are entitled to a
  139  prorated share of the policy limits as determined by the
  140  arbitrator, who shall consider the comparative fault, if any, of
  141  each third-party claimant, and the total likely outcome at trial
  142  based upon the total of the economic and noneconomic damages
  143  submitted to the arbitrator for consideration. A third-party
  144  claimant whose claim is resolved by the arbitrator shall execute
  145  and deliver a general release to the insured party whose claim
  146  is resolved by the proceeding.
  147         (4) After settlement of a third-party claim, the third
  148  party claimant’s attorney is responsible for the satisfaction of
  149  any liens from the settlement funds to the extent such
  150  settlement funds are sufficient. If the third-party claimant is
  151  not represented by counsel, the third-party claimant shall
  152  provide the insurer with a written accounting of all outstanding
  153  liens.
  154         (5) An insurer is not liable for amounts in excess of the
  155  policy limits or of the award, whichever is less, if it makes
  156  timely payment of an appraisal award.
  157         (6) The fact that the insurer does not accept a demand to
  158  settle or offer policy limits under paragraph (2)(c), pay an
  159  appraisal award under subsection (5), or file an interpleader
  160  action or make policy limits available for arbitration under
  161  subsection (3) during the times specified does not give rise to
  162  a presumption that the insurer acted in bad faith.
  163         (7)(2) Any party may bring a civil action against an
  164  unauthorized insurer if such party is damaged by a violation of
  165  s. 624.401 by the unauthorized insurer.
  166         (8)(3)(a)Except for an action relating to a third-party
  167  claim, as a condition precedent to bringing an action under this
  168  section, the department and the authorized insurer must be have
  169  been given 60 days’ written notice of the violation. If the
  170  department returns a notice for lack of specificity, the 60-day
  171  time period does shall not begin until a proper notice is filed.
  172         (a)(b) The notice shall be on a form provided by the
  173  department, sent by certified mail to the claim handler if known
  174  or, if unknown, to the specific office handling the claim, and
  175  shall state with specificity the following information, and such
  176  other information as the department may require:
  177         1. The statutory provision, including the specific language
  178  of the statute, which the authorized insurer allegedly violated.
  179         2. The facts and circumstances reasonably known to the
  180  insurer giving rise to the violation, stated with specificity,
  181  and the corrective action that the insurer needs to take to
  182  remedy the alleged violation.
  183         3. The name of any individual involved in the violation.
  184         4. Reference to specific policy language that is relevant
  185  to the violation, if any. If the person bringing the civil
  186  action is a third party claimant, she or he shall not be
  187  required to reference the specific policy language if the
  188  authorized insurer has not provided a copy of the policy to the
  189  third party claimant pursuant to written request.
  190         5. A statement that the notice is given in order to perfect
  191  the right to pursue the civil remedy authorized by this section.
  192         6. Such other information as the department may require.
  193         (b)(c) Within 20 days after of receipt of the notice, the
  194  department may return any notice that does not provide the
  195  specific information required by this section, and the
  196  department shall indicate the specific deficiencies contained in
  197  the notice. A determination by the department to return a notice
  198  for lack of specificity is shall be exempt from the requirements
  199  of chapter 120.
  200         (c)(d) No action shall lie if, within 60 days after filing
  201  notice, the damages are paid or the circumstances giving rise to
  202  the violation are corrected.
  203         (d)(e) The authorized insurer that is the recipient of the
  204  a notice must filed pursuant to this section shall report to the
  205  department on the disposition of the alleged violation.
  206         (e)(f) The applicable statute of limitations for an action
  207  under this section is shall be tolled for a period of 65 days by
  208  the mailing of the notice required by this subsection or the
  209  mailing of a subsequent notice required by this subsection.
  210         (9)(4) Upon adverse adjudication at trial or upon appeal,
  211  the authorized insurer is shall be liable for damages, together
  212  with court costs and reasonable attorney’s fees incurred by the
  213  plaintiff.
  214         (10)(5)No Punitive damages may not shall be awarded under
  215  this section unless the acts giving rise to the violation occur
  216  with such frequency as to indicate a general business practice
  217  and these acts are:
  218         (a) Willful, wanton, and malicious;
  219         (b) In reckless disregard for the rights of any insured; or
  220         (c) In reckless disregard for the rights of a beneficiary
  221  under a life insurance contract.
  223  Any person who pursues a claim under this subsection must shall
  224  post in advance the costs of discovery. Such costs shall be
  225  awarded to the authorized insurer if no punitive damages are not
  226  awarded to the plaintiff.
  227         (11)(6) This section does shall not be construed to
  228  authorize a class action suit against an authorized insurer or a
  229  civil action against the commission, the office, or the
  230  department or any of their employees, or to create a cause of
  231  action if when an authorized health insurer refuses to pay a
  232  claim for reimbursement on the ground that the charge for a
  233  service was unreasonably high or that the service provided was
  234  not medically necessary.
  235         (12)(7)In the absence of expressed language to the
  236  contrary, This section does shall not be construed to authorize
  237  a civil action or create a cause of action against an authorized
  238  insurer or its employees who, in good faith, release information
  239  about an insured or an insurance policy to a law enforcement
  240  agency in furtherance of an investigation of a criminal or
  241  fraudulent act relating to a motor vehicle theft or a motor
  242  vehicle insurance claim.
  243         (13)(8) The civil remedy specified in this section does not
  244  preempt any other remedy or cause of action provided for
  245  pursuant to any other statute or pursuant to the common law of
  246  this state. The legal standard established in subparagraph
  247  (1)(b)1. and the provisions of subsections (2)-(6) apply equally
  248  and without limitation or exception to all common law remedies
  249  and causes of action for bad faith failure to settle, regardless
  250  of legal theory, and to actions brought pursuant to this
  251  section. To prevent circumvention of this section by resort to
  252  common-law causes of action, all prior judicial decisions
  253  inconsistent with the provisions of this section are
  254  disapproved. These include, but are expressly not limited to,
  255  Macola v. Gov’t Employees Ins. Co., 953 So.2d 451 (Fla. 2006),
  256  Berges v. Infinity Ins. Co., 896 So.2d 665 (Fla. 2004), and
  257  Powell v. Prudential Property & Cas. Ins. Co., 584 So.2d 12
  258  (Fla. 3rd DCA 1991). Any person may obtain a judgment under
  259  either the common-law remedy for of bad faith or this statutory
  260  remedy, but is shall not be entitled to a judgment under both
  261  remedies. This section does shall not be construed to create a
  262  common-law cause of action. The damages recoverable pursuant to
  263  this section shall include those damages that which are a
  264  reasonably foreseeable result of a specified violation of this
  265  section by the authorized insurer and may include an award or
  266  judgment in an amount that exceeds the policy limits.
  267         (14)(9) A surety issuing a payment or performance bond on
  268  the construction or maintenance of a building or roadway project
  269  is not an insurer for purposes of subsection (1).
  270         (15) As used in the section, the term “third-party claim”
  271  means a claim against an insured, by one other than the insured,
  272  on account of harm or damage allegedly caused by an insured and
  273  covered by a policy of liability insurance.
  274         Section 2. Paragraph (k) of subsection (3) of section
  275  627.311, Florida Statutes, is amended to read:
  276         627.311 Joint underwriters and joint reinsurers; public
  277  records and public meetings exemptions.—
  278         (3) The office may, after consultation with insurers
  279  licensed to write automobile insurance in this state, approve a
  280  joint underwriting plan for purposes of equitable apportionment
  281  or sharing among insurers of automobile liability insurance and
  282  other motor vehicle insurance, as an alternate to the plan
  283  required in s. 627.351(1). All insurers authorized to write
  284  automobile insurance in this state shall subscribe to the plan
  285  and participate therein. The plan shall be subject to continuous
  286  review by the office, which may at any time disapprove the
  287  entire plan or any part thereof if it determines that conditions
  288  have changed since prior approval and that in view of the
  289  purposes of the plan changes are warranted. Any disapproval by
  290  the office shall be subject to the provisions of chapter 120.
  291  The Florida Automobile Joint Underwriting Association is created
  292  under the plan. The plan and the association:
  293         (k)1. Shall have no liability, and no cause of action of
  294  any nature shall arise against any member insurer or its agents
  295  or employees, agents or employees of the association, members of
  296  the board of governors of the association, the Chief Financial
  297  Officer, or the office or its representatives for any action
  298  taken by them in the performance of their duties or
  299  responsibilities under this subsection. Such immunity does not
  300  apply to actions for or arising out of a breach of any contract
  301  or agreement pertaining to insurance, or any willful tort.
  302         2. Notwithstanding the requirements of s. 624.155(3)(a), as
  303  a condition precedent to bringing an action against the plan
  304  under s. 624.155, the department and the plan must have been
  305  given 90 days’ written notice of the violation. If the
  306  department returns a notice for lack of specificity, the 90-day
  307  time period shall not begin until a proper notice is filed. This
  308  notice must comply with the information requirements of s.
  309  624.155(3)(b). Effective October 1, 2007, this subparagraph
  310  shall expire unless reenacted by the Legislature prior to that
  311  date.
  312         Section 3. If any provision of this act or its application
  313  to any person or circumstance is held invalid, the invalidity
  314  does not affect other provisions or applications of the act
  315  which can be given effect without the invalid provision or
  316  application, and to this end the provisions of this act are
  317  severable.
  318         Section 4. This act shall take effect July 1, 2011.