2014 Legislature             CS for CS for SB 708, 1st Engrossed
    2         An act relating to insurance claims; amending s.
    3         627.3518, F.S.; conforming a cross-reference; amending
    4         s. 627.409, F.S.; providing that a claim for
    5         residential property insurance cannot be denied based
    6         on certain credit information; amending s. 627.4133,
    7         F.S.; providing that a policy or contract may not be
    8         cancelled based on certain credit information;
    9         amending s. 627.7015, F.S.; revising the rule
   10         requirements relating to the property insurance
   11         mediation program administered by the department;
   12         creating s. 627.70151, F.S.; providing grounds for
   13         challenging an umpire’s impartiality in estimating the
   14         amount of a property loss; amending s. 627.706, F.S.;
   15         redefining the terms “neutral evaluator” and
   16         “professional engineer”; amending s. 627.7074, F.S.;
   17         specifying grounds for denying, suspending, or
   18         revoking approval of a neutral evaluator; creating s.
   19         627.7142, F.S.; establishing a Homeowner Claims Bill
   20         of Rights for residential property insurance
   21         policyholders; providing that such bill of rights does
   22         not provide a cause of action; providing effective
   23         dates.
   25  Be It Enacted by the Legislature of the State of Florida:
   27         Section 1. Subsection (9) of section 627.3518, Florida
   28  Statutes, is amended to read:
   29         627.3518 Citizens Property Insurance Corporation
   30  policyholder eligibility clearinghouse program.—The purpose of
   31  this section is to provide a framework for the corporation to
   32  implement a clearinghouse program by January 1, 2014.
   33         (9) The 45-day notice of nonrenewal requirement set forth
   34  in s. 627.4133(2)(b)5.b. s. 627.4133(2)(b)4.b. applies when a
   35  policy is nonrenewed by the corporation because the risk has
   36  received an offer of coverage pursuant to this section which
   37  renders the risk ineligible for coverage by the corporation.
   38         Section 2. Section 627.409, Florida Statutes, is amended to
   39  read:
   40         627.409 Representations in applications; warranties.—
   41         (1) Any statement or description made by or on behalf of an
   42  insured or annuitant in an application for an insurance policy
   43  or annuity contract, or in negotiations for a policy or
   44  contract, is a representation and is not a warranty. Except as
   45  provided in subsection (3), a misrepresentation, omission,
   46  concealment of fact, or incorrect statement may prevent recovery
   47  under the contract or policy only if any of the following apply:
   48         (a) The misrepresentation, omission, concealment, or
   49  statement is fraudulent or is material either to the acceptance
   50  of the risk or to the hazard assumed by the insurer.
   51         (b) If the true facts had been known to the insurer
   52  pursuant to a policy requirement or other requirement, the
   53  insurer in good faith would not have issued the policy or
   54  contract, would not have issued it at the same premium rate,
   55  would not have issued a policy or contract in as large an
   56  amount, or would not have provided coverage with respect to the
   57  hazard resulting in the loss.
   58         (2) A breach or violation by the insured of a any warranty,
   59  condition, or provision of a any wet marine or transportation
   60  insurance policy, contract of insurance, endorsement, or
   61  application therefor does not void the policy or contract, or
   62  constitute a defense to a loss thereon, unless such breach or
   63  violation increased the hazard by any means within the control
   64  of the insured.
   65         (3) For residential property insurance, if a policy or
   66  contract has been in effect for more than 90 days, a claim filed
   67  by the insured cannot be denied based on credit information
   68  available in public records.
   69         Section 3. Paragraph (b) of subsection (2) of section
   70  627.4133, Florida Statutes, is amended to read:
   71         627.4133 Notice of cancellation, nonrenewal, or renewal
   72  premium.—
   73         (2) With respect to any personal lines or commercial
   74  residential property insurance policy, including, but not
   75  limited to, any homeowner’s, mobile home owner’s, farmowner’s,
   76  condominium association, condominium unit owner’s, apartment
   77  building, or other policy covering a residential structure or
   78  its contents:
   79         (b) The insurer shall give the first-named insured written
   80  notice of nonrenewal, cancellation, or termination at least 100
   81  days before the effective date of the nonrenewal, cancellation,
   82  or termination. However, the insurer shall give at least 100
   83  days’ written notice, or written notice by June 1, whichever is
   84  earlier, for any nonrenewal, cancellation, or termination that
   85  would be effective between June 1 and November 30. The notice
   86  must include the reason or reasons for the nonrenewal,
   87  cancellation, or termination, except that:
   88         1. The insurer shall give the first-named insured written
   89  notice of nonrenewal, cancellation, or termination at least 120
   90  days before prior to the effective date of the nonrenewal,
   91  cancellation, or termination for a first-named insured whose
   92  residential structure has been insured by that insurer or an
   93  affiliated insurer for at least 5 years before a 5-year period
   94  immediately prior to the date of the written notice.
   95         2. If cancellation is for nonpayment of premium, at least
   96  10 days’ written notice of cancellation accompanied by the
   97  reason therefor must be given. As used in this subparagraph, the
   98  term “nonpayment of premium” means failure of the named insured
   99  to discharge when due her or his obligations for paying the
  100  premium in connection with the payment of premiums on a policy
  101  or an any installment of such premium, whether the premium is
  102  payable directly to the insurer or its agent or indirectly under
  103  a any premium finance plan or extension of credit, or failure to
  104  maintain membership in an organization if such membership is a
  105  condition precedent to insurance coverage. The term also means
  106  the failure of a financial institution to honor an insurance
  107  applicant’s check after delivery to a licensed agent for payment
  108  of a premium, even if the agent has previously delivered or
  109  transferred the premium to the insurer. If a dishonored check
  110  represents the initial premium payment, the contract and all
  111  contractual obligations are void ab initio unless the nonpayment
  112  is cured within the earlier of 5 days after actual notice by
  113  certified mail is received by the applicant or 15 days after
  114  notice is sent to the applicant by certified mail or registered
  115  mail., and If the contract is void, any premium received by the
  116  insurer from a third party must be refunded to that party in
  117  full.
  118         3. If such cancellation or termination occurs during the
  119  first 90 days the insurance is in force and the insurance is
  120  canceled or terminated for reasons other than nonpayment of
  121  premium, at least 20 days’ written notice of cancellation or
  122  termination accompanied by the reason therefor must be given
  123  unless there has been a material misstatement or
  124  misrepresentation or a failure to comply with the underwriting
  125  requirements established by the insurer.
  126         4. After a policy or contract has been in effect for more
  127  than 90 days, the insurer may not cancel or terminate the policy
  128  or contract based on credit information available in public
  129  records.
  130         5.4. The requirement for providing written notice by June 1
  131  of any nonrenewal that would be effective between June 1 and
  132  November 30 does not apply to the following situations, but the
  133  insurer remains subject to the requirement to provide such
  134  notice at least 100 days before the effective date of
  135  nonrenewal:
  136         a. A policy that is nonrenewed due to a revision in the
  137  coverage for sinkhole losses and catastrophic ground cover
  138  collapse pursuant to s. 627.706.
  139         b. A policy that is nonrenewed by Citizens Property
  140  Insurance Corporation, pursuant to s. 627.351(6), for a policy
  141  that has been assumed by an authorized insurer offering
  142  replacement coverage to the policyholder is exempt from the
  143  notice requirements of paragraph (a) and this paragraph. In such
  144  cases, the corporation must give the named insured written
  145  notice of nonrenewal at least 45 days before the effective date
  146  of the nonrenewal.
  148  After the policy has been in effect for 90 days, the policy may
  149  not be canceled by the insurer unless there has been a material
  150  misstatement, a nonpayment of premium, a failure to comply with
  151  underwriting requirements established by the insurer within 90
  152  days after the date of effectuation of coverage, or a
  153  substantial change in the risk covered by the policy, or if the
  154  cancellation is for all insureds under such policies for a given
  155  class of insureds. This paragraph does not apply to individually
  156  rated risks that have having a policy term of less than 90 days.
  157         6.5. Notwithstanding any other provision of law, an insurer
  158  may cancel or nonrenew a property insurance policy after at
  159  least 45 days’ notice if the office finds that the early
  160  cancellation of some or all of the insurer’s policies is
  161  necessary to protect the best interests of the public or
  162  policyholders and the office approves the insurer’s plan for
  163  early cancellation or nonrenewal of some or all of its policies.
  164  The office may base such finding upon the financial condition of
  165  the insurer, lack of adequate reinsurance coverage for hurricane
  166  risk, or other relevant factors. The office may condition its
  167  finding on the consent of the insurer to be placed under
  168  administrative supervision pursuant to s. 624.81 or to the
  169  appointment of a receiver under chapter 631.
  170         7.6. A policy covering both a home and a motor vehicle may
  171  be nonrenewed for any reason applicable to either the property
  172  or motor vehicle insurance after providing 90 days’ notice.
  173         Section 4. Paragraph (b) of subsection (4) of section
  174  627.7015, Florida Statutes, is amended to read:
  175         627.7015 Alternative procedure for resolution of disputed
  176  property insurance claims.—
  177         (4) The department shall adopt by rule a property insurance
  178  mediation program to be administered by the department or its
  179  designee. The department may also adopt special rules which are
  180  applicable in cases of an emergency within the state. The rules
  181  shall be modeled after practices and procedures set forth in
  182  mediation rules of procedure adopted by the Supreme Court. The
  183  rules shall provide for:
  184         (b) Qualifications, denial of application, suspension,
  185  revocation, and other penalties for of mediators as provided in
  186  s. 627.745 and in the Florida Rules for of Certified and Court
  187  Appointed Court Appointed Mediators, and for such other
  188  individuals as are qualified by education, training, or
  189  experience as the department determines to be appropriate.
  190         Section 5. Section 627.70151, Florida Statutes, is created
  191  to read:
  192         627.70151 Appraisal; conflicts of interest.—An insurer that
  193  offers residential coverage as defined in s. 627.4025, or a
  194  policyholder that uses an appraisal clause in a property
  195  insurance contract to establish a process for estimating or
  196  evaluating the amount of loss through the use of an impartial
  197  umpire, may challenge an umpire’s impartiality and disqualify
  198  the proposed umpire only if:
  199         (1) A familial relationship within the third degree exists
  200  between the umpire and a party or a representative of a party;
  201         (2) The umpire has previously represented a party in a
  202  professional capacity in the same claim or matter involving the
  203  same property;
  204         (3) The umpire has represented another person in a
  205  professional capacity on the same or a substantially related
  206  matter that includes the claim, the same property or an adjacent
  207  property, and the other person’s interests are materially
  208  adverse to the interests of a party; or
  209         (4) The umpire has worked as an employer or employee of a
  210  party within the preceding 5 years.
  211         Section 6. Paragraphs (c) and (f) of subsection (2) of
  212  section 627.706, Florida Statutes, are amended to read:
  213         627.706 Sinkhole insurance; catastrophic ground cover
  214  collapse; definitions.—
  215         (2) As used in ss. 627.706-627.7074, and as used in
  216  connection with any policy providing coverage for a catastrophic
  217  ground cover collapse or for sinkhole losses, the term:
  218         (c) “Neutral evaluator” means an a professional engineer
  219  licensed under chapter 471 who has experience and expertise in
  220  the identification of sinkhole activity as well as other
  221  potential causes of structural damage or a professional
  222  geologist. The licensed engineer or professional geologist must
  223  have who has completed a course of study in alternative dispute
  224  resolution designed or approved by the department for use in the
  225  neutral evaluation process, must be and who is determined by the
  226  department to be fair and impartial, and may not otherwise be
  227  ineligible for certification as provided under s. 627.7074.
  228         (f) “Professional engineer” means a person, as defined in
  229  s. 471.005, who has a bachelor’s degree or higher in
  230  engineering. A professional engineer must also have experience
  231  and expertise in the identification of sinkhole activity or as
  232  well as other potential causes of structural damage.
  233         Section 7. Subsections (7) and (18) of section 627.7074,
  234  Florida Statutes, are amended to read:
  235         627.7074 Alternative procedure for resolution of disputed
  236  sinkhole insurance claims.—
  237         (7) Upon receipt of a request for neutral evaluation, the
  238  department shall provide the parties a list of certified neutral
  239  evaluators. The department shall allow the parties to submit
  240  requests to disqualify evaluators on the list for cause.
  241         (a) The department shall disqualify neutral evaluators for
  242  cause based only on any of the following grounds:
  243         1. A familial relationship within the third degree exists
  244  between the neutral evaluator and either party or a
  245  representative of either party within the third degree.
  246         2. The proposed neutral evaluator has, in a professional
  247  capacity, previously represented either party or a
  248  representative of either party, in the same or a substantially
  249  related matter.
  250         3. The proposed neutral evaluator has, in a professional
  251  capacity, represented another person in the same or a
  252  substantially related matter and that person’s interests are
  253  materially adverse to the interests of the parties. The term
  254  “substantially related matter” means participation by the
  255  neutral evaluator on the same claim, property, or adjacent
  256  property.
  257         4. The proposed neutral evaluator has, within the preceding
  258  5 years, worked as an employer or employee of any party to the
  259  case.
  260         (b) The department shall deny an application for, or
  261  suspend or revoke its certification of, a neutral evaluator if
  262  the department finds that any of the following grounds exist:
  263         1. Lack of one or more of the qualifications specified in
  264  this section for approval or certification.
  265         2. Material misstatement, misrepresentation, or fraud in
  266  obtaining or attempting to obtain approval or certification.
  267         3. Demonstrated lack of fitness or trustworthiness to act
  268  as a neutral evaluator.
  269         4. Fraudulent or dishonest practices in the conduct of an
  270  evaluation or in the conduct of financial services business.
  271         5. Violation of any provision of this code or of a lawful
  272  order or rule of the department, or aiding, instructing, or
  273  encouraging another party in committing such a violation.
  274         (c)(b) The parties shall appoint a neutral evaluator from
  275  the department list and promptly inform the department. If the
  276  parties cannot agree to a neutral evaluator within 14 business
  277  days, the department shall appoint a neutral evaluator from the
  278  list of certified neutral evaluators. The department shall allow
  279  each party to disqualify two neutral evaluators without cause.
  280  Upon selection or appointment, the department shall promptly
  281  refer the request to the neutral evaluator.
  282         (d)(c) Within 14 business days after the referral, the
  283  neutral evaluator shall notify the policyholder and the insurer
  284  of the date, time, and place of the neutral evaluation
  285  conference. The conference may be held by telephone, if feasible
  286  and desirable. The neutral evaluator shall make reasonable
  287  efforts to hold the conference within 90 days after the receipt
  288  of the request by the department. Failure of the neutral
  289  evaluator to hold the conference within 90 days does not
  290  invalidate either party’s right to neutral evaluation or to a
  291  neutral evaluation conference held outside this timeframe.
  292         (18) The department shall adopt rules of procedure for the
  293  neutral evaluation process and for certifying, denying
  294  certification, suspending certification, and revoking the
  295  certification of a neutral evaluator.
  296         Section 8. Effective October 1, 2014, section 627.7142,
  297  Florida Statutes, is created to read:
  298         627.7142 Homeowner Claims Bill of Rights.—An insurer
  299  issuing a personal lines residential property insurance policy
  300  in this state must provide a Homeowner Claims Bill of Rights to
  301  a policyholder within 14 days after receiving an initial
  302  communication with respect to a claim, unless the claim follows
  303  an event that is the subject of a declaration of a state of
  304  emergency by the Governor. The purpose of the bill of rights is
  305  to summarize, in simple, nontechnical terms, existing Florida
  306  law regarding the rights of a personal lines residential
  307  property insurance policyholder who files a claim of loss. The
  308  Homeowner Claims Bill of Rights is specific to the claims
  309  process and does not represent all of a policyholder’s rights
  310  under Florida law regarding the insurance policy. The Homeowner
  311  Claims Bill of Rights does not create a civil cause of action by
  312  any individual policyholder or class of policyholders against an
  313  insurer or insurers. The failure of an insurer to properly
  314  deliver the Homeowner Claims Bill of Rights is subject to
  315  administrative enforcement by the office, but is not admissible
  316  as evidence in a civil action against an insurer. The Homeowner
  317  Claims Bill of Rights does not enlarge, modify, or contravene
  318  statutory requirements, including, but not limited to, ss.
  319  626.854, 626.9541, 627.70131, 627.7015, and 627.7074, and does
  320  not prohibit an insurer from exercising its right to repair
  321  damaged property in compliance with the terms of an applicable
  322  policy or ss. 627.7011(5)(e) and 627.702(7). The Homeowner
  323  Claims Bill of Rights must state:
  325                          HOMEOWNER CLAIMS                         
  326                           BILL OF RIGHTS                          
  327         This Bill of Rights is specific to the claims process
  328         and does not represent all of your rights under
  329         Florida law regarding your policy. There are also
  330         exceptions to the stated timelines when conditions are
  331         beyond your insurance company’s control. This document
  332         does not create a civil cause of action by an
  333         individual policyholder, or a class of policyholders,
  334         against an insurer or insurers and does not prohibit
  335         an insurer from exercising its right to repair damaged
  336         property in compliance with the terms of an applicable
  337         policy.
  339         YOU HAVE THE RIGHT TO:
  340         1. Receive from your insurance company an
  341         acknowledgment of your reported claim within 14 days
  342         after the time you communicated the claim.
  343         2. Upon written request, receive from your
  344         insurance company within 30 days after you have
  345         submitted a complete proof-of-loss statement to your
  346         insurance company, confirmation that your claim is
  347         covered in full, partially covered, or denied, or
  348         receive a written statement that your claim is being
  349         investigated.
  350         3. Within 90 days, subject to any dual interest
  351         noted in the policy, receive full settlement payment
  352         for your claim or payment of the undisputed portion of
  353         your claim, or your insurance company’s denial of your
  354         claim.
  355         4. Free mediation of your disputed claim by the
  356         Florida Department of Financial Services Division of
  357         Consumer Services, under most circumstances and
  358         subject to certain restrictions.
  359         5. Neutral evaluation of your disputed claim, if
  360         your claim is for damage caused by a sinkhole and is
  361         covered by your policy.
  362         6. Contact the Florida Department of Financial
  363         Services Division of Consumer Services’ toll-free
  364         helpline for assistance with any insurance claim or
  365         questions pertaining to the handling of your claim.
  366         You can reach the Helpline by phone at...toll free
  367         phone number..., or you can seek assistance online at
  368         the Florida Department of Financial Services Division
  369         of Consumer Services’ website at...website address....
  371         YOU ARE ADVISED TO:
  372         1. Contact your insurance company before entering
  373         into any contract for repairs to confirm any managed
  374         repair policy provisions or optional preferred
  375         vendors.
  376         2. Make and document emergency repairs that are
  377         necessary to prevent further damage. Keep the damaged
  378         property, if feasible, keep all receipts, and take
  379         photographs of damage before and after any repairs.
  380         3. Carefully read any contract that requires you
  381         to pay out-of-pocket expenses or a fee that is based
  382         on a percentage of the insurance proceeds that you
  383         will receive for repairing or replacing your property.
  384         4. Confirm that the contractor you choose is
  385         licensed to do business in Florida. You can verify a
  386         contractor’s license and check to see if there are any
  387         complaints against him or her by calling the Florida
  388         Department of Business and Professional Regulation.
  389         You should also ask the contractor for references from
  390         previous work.
  391         5. Require all contractors to provide proof of
  392         insurance before beginning repairs.
  393         6. Take precautions if the damage requires you to
  394         leave your home, including securing your property and
  395         turning off your gas, water, and electricity, and
  396         contacting your insurance company and provide a phone
  397         number where you can be reached.
  399         Section 9. Except as otherwise expressly provided in this
  400  act, this act shall take effect July 1, 2014.