Florida Senate - 2019                        COMMITTEE AMENDMENT
       Bill No. CS for CS for SB 122
       
       
       
       
       
       
                                Ì338298[Î338298                         
       
                              LEGISLATIVE ACTION                        
                    Senate             .             House              
                  Comm: RCS            .                                
                  04/18/2019           .                                
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       The Committee on Rules (Broxson) recommended the following:
       
    1         Senate Amendment (with title amendment)
    2  
    3         Delete everything after the enacting clause
    4  and insert:
    5         Section 1. Section 627.7152, Florida Statutes, is created
    6  to read:
    7         627.7152Assignment agreements.—
    8         (1)As used in this section, the term:
    9         (a)“Assignee” means a person who is assigned post-loss
   10  benefits through an assignment agreement.
   11         (b)“Assignment agreement” means any instrument by which
   12  post-loss benefits under a residential property insurance policy
   13  or commercial property insurance policy, as that term is defined
   14  in s. 627.0625(1), are assigned or transferred, or acquired in
   15  any manner, in whole or in part, to or from a person providing
   16  services to protect, repair, restore, or replace property or to
   17  mitigate against further damage to the property.
   18         (c)“Assignor” means a person who assigns post-loss
   19  benefits under a residential property insurance policy or
   20  commercial property insurance policy to another person through
   21  an assignment agreement.
   22         (d)“Disputed amount” means the difference between the
   23  assignee’s presuit settlement demand and the insurer’s presuit
   24  settlement offer.
   25         (e)“Judgment obtained” means damages recovered, if any,
   26  but does not include any amount awarded for attorney fees,
   27  costs, or interest.
   28         (f)“Presuit settlement demand” means the demand made by
   29  the assignee in the written notice of intent to initiate
   30  litigation as required by paragraph (9)(a).
   31         (g)“Presuit settlement offer” means the offer made by the
   32  insurer in its written response to the notice of intent to
   33  initiate litigation as required by paragraph (9)(b).
   34         (2)(a)An assignment agreement must:
   35         1.Be in writing and executed by and between the assignor
   36  and the assignee.
   37         2.Contain a provision that allows the assignor to rescind
   38  the assignment agreement without a penalty or fee by submitting
   39  a written notice of rescission signed by the assignor to the
   40  assignee within 14 days after the execution of the agreement, at
   41  least 30 days after the date work on the property is scheduled
   42  to commence if the assignee has not substantially performed, or
   43  at least 30 days after the execution of the agreement if the
   44  agreement does not contain a commencement date and the assignee
   45  has not begun substantial work on the property.
   46         3.Contain a provision requiring the assignee to provide a
   47  copy of the executed assignment agreement to the insurer within
   48  3 business days after the date on which the assignment agreement
   49  is executed or the date on which work begins, whichever is
   50  earlier. Delivery of the copy of the assignment agreement to the
   51  insurer may be made:
   52         a.By personal service, overnight delivery, or electronic
   53  transmission, with evidence of delivery in the form of a receipt
   54  or other paper or electronic acknowledgement by the insurer; or
   55         b.To the location designated for receipt of such
   56  agreements as specified in the policy.
   57         4.Contain a written, itemized, per-unit cost estimate of
   58  the services to be performed by the assignee.
   59         5.Relate only to work to be performed by the assignee for
   60  services to protect, repair, restore, or replace a dwelling or
   61  structure or to mitigate against further damage to such
   62  property.
   63         6.Contain the following notice in 18-point uppercase and
   64  boldfaced type:
   65  
   66  YOU ARE AGREEING TO GIVE UP CERTAIN RIGHTS YOU HAVE UNDER YOUR
   67  INSURANCE POLICY TO A THIRD PARTY, WHICH MAY RESULT IN
   68  LITIGATION AGAINST YOUR INSURER. PLEASE READ AND UNDERSTAND THIS
   69  DOCUMENT BEFORE SIGNING IT. YOU HAVE THE RIGHT TO CANCEL THIS
   70  AGREEMENT WITHOUT PENALTY WITHIN 14 DAYS AFTER THE DATE THIS
   71  AGREEMENT IS EXECUTED, AT LEAST 30 DAYS AFTER THE DATE WORK ON
   72  THE PROPERTY IS SCHEDULED TO COMMENCE IF THE ASSIGNEE HAS NOT
   73  SUBSTANTIALLY PERFORMED, OR AT LEAST 30 DAYS AFTER THE EXECUTION
   74  OF THE AGREEMENT IF THE AGREEMENT DOES NOT CONTAIN A
   75  COMMENCEMENT DATE AND THE ASSIGNEE HAS NOT BEGUN SUBSTANTIAL
   76  WORK ON THE PROPERTY. HOWEVER, YOU ARE OBLIGATED FOR PAYMENT OF
   77  ANY CONTRACTED WORK PERFORMED BEFORE THE AGREEMENT IS RESCINDED.
   78  THIS AGREEMENT DOES NOT CHANGE YOUR OBLIGATION TO PERFORM THE
   79  DUTIES REQUIRED UNDER YOUR PROPERTY INSURANCE POLICY.
   80  
   81         7.Contain a provision requiring the assignee to indemnify
   82  and hold harmless the assignor from all liabilities, damages,
   83  losses, and costs, including, but not limited to, attorney fees,
   84  should the policy subject to the assignment agreement prohibit,
   85  in whole or in part, the assignment of benefits.
   86         (b)An assignment agreement may not contain:
   87         1.A penalty or fee for rescission under subparagraph
   88  (a)2.;
   89         2.A check or mortgage processing fee;
   90         3.A penalty or fee for cancellation of the agreement; or
   91         4.An administrative fee.
   92         (c)If an assignor acts under an urgent or emergency
   93  circumstance to protect property from damage and executes an
   94  assignment agreement to protect, repair, restore, or replace
   95  property or to mitigate against further damage to the property,
   96  an assignee may not receive an assignment of post-loss benefits
   97  under a residential property insurance policy in excess of the
   98  greater of $3,000 or 1 percent of the Coverage A limit under
   99  such policy. For purposes of this paragraph, the term “urgent or
  100  emergency circumstance” means a situation in which a loss to
  101  property, if not addressed immediately, will result in
  102  additional damage until measures are completed to prevent such
  103  damage.
  104         (d)An assignment agreement that does not comply with this
  105  subsection is invalid and unenforceable.
  106         (3)In a claim arising under an assignment agreement, an
  107  assignee has the burden to demonstrate that the insurer is not
  108  prejudiced by the assignee’s failure to:
  109         (a)Maintain records of all services provided under the
  110  assignment agreement.
  111         (b)Cooperate with the insurer in the claim investigation.
  112         (c)Provide the insurer with requested records and
  113  documents related to the services provided, and permit the
  114  insurer to make copies of such records and documents.
  115         (d)Deliver a copy of the executed assignment agreement to
  116  the insurer within 3 business days after executing the
  117  assignment agreement or work has begun, whichever is earlier.
  118         (4)An assignee:
  119         (a)Must provide the assignor with accurate and up-to-date
  120  revised estimates of the scope of work to be performed as
  121  supplemental or additional repairs are required.
  122         (b)Must perform the work in accordance with accepted
  123  industry standards.
  124         (c)May not seek payment from the assignor exceeding the
  125  applicable deductible under the policy unless the assignor has
  126  chosen to have additional work performed at the assignor’s own
  127  expense.
  128         (d)Must, as a condition precedent to filing suit under the
  129  policy, and, if required by the insurer, submit to examinations
  130  under oath and recorded statements conducted by the insurer or
  131  the insurer’s representative that are reasonably necessary,
  132  based on the scope of the work and the complexity of the claim,
  133  which examinations and recorded statements must be limited to
  134  matters related to the services provided, the cost of the
  135  services, and the assignment agreement.
  136         (e)Must, as a condition precedent to filing suit under the
  137  policy, and, if required by the insurer, participate in
  138  appraisal or other alternative dispute resolution methods in
  139  accordance with the terms of the policy.
  140         (5)An assignment agreement and this section do not modify
  141  or eliminate any term, condition, or defense relating to any
  142  managed repair arrangement provided in the policy.
  143         (6)An assignment agreement does not transfer or create any
  144  authority to adjust, negotiate, or settle any portion of a claim
  145  to a person or entity not authorized to adjust, negotiate, or
  146  settle a claim on behalf of an assignor or a claimant under part
  147  VI of chapter 626.
  148         (7)(a)Notwithstanding any other provision of law, and
  149  except as provided in paragraph (b), acceptance by an assignee
  150  of an assignment agreement is a waiver by the assignee and its
  151  subcontractors of claims against a named insured for payments
  152  arising from the assignment agreement. The assignee and its
  153  subcontractors may not collect or attempt to collect money from
  154  an insured, maintain any action at law against an insured, claim
  155  a lien on the real property of an insured, or report an insured
  156  to a credit agency for payments arising from the assignment
  157  agreement. Such waiver remains in effect after the assignment
  158  agreement is rescinded by the assignor or after a determination
  159  that the assignment agreement is invalid.
  160         (b)A named insured is responsible for the payment of all
  161  of the following:
  162         1.Any deductible amount due under the policy.
  163         2.Any betterment ordered and performed that is approved by
  164  the named insured.
  165         3.Any contracted work performed before the assignment
  166  agreement is rescinded.
  167         (8)The assignee shall indemnify and hold harmless the
  168  assignor from all liabilities, damages, losses, and costs,
  169  including, but not limited to, attorney fees, should the policy
  170  subject to the assignment agreement prohibit, in whole or in
  171  part, the assignment of benefits.
  172         (9)(a)An assignee must provide the named insured, insurer,
  173  and the assignor, if not the named insured, with a written
  174  notice of intent to initiate litigation before filing suit under
  175  the policy. Such notice must be served by certified mail, return
  176  receipt requested, or electronic delivery at least 10 business
  177  days before filing suit, but may not be served before the
  178  insurer has made a determination of coverage under s. 627.70131.
  179  The notice must specify the damages in dispute, the amount
  180  claimed, and a presuit settlement demand. Concurrent with the
  181  notice, and as a precondition to filing suit, the assignee must
  182  provide the named insured, insurer, and the assignor, if not the
  183  named insured, a detailed written invoice or estimate of
  184  services, including itemized information on equipment,
  185  materials, and supplies; the number of labor hours; and, in the
  186  case of work performed, proof that the work has been performed
  187  in accordance with accepted industry standards.
  188         (b)An insurer must respond in writing to the notice within
  189  10 business days after receiving the notice specified in
  190  paragraph (a) by making a presuit settlement offer or requiring
  191  the assignee to participate in appraisal or other method of
  192  alternative dispute resolution under the policy. An insurer must
  193  have a procedure for the prompt investigation, review, and
  194  evaluation of the dispute stated in the notice and must
  195  investigate each claim contained in the notice in accordance
  196  with the Florida Insurance Code.
  197         (10)Notwithstanding any other provision of law, in a suit
  198  related to an assignment agreement for post-loss claims arising
  199  under a residential or commercial property insurance policy,
  200  attorney fees and costs may be recovered by an assignee only
  201  under s. 57.105 and this subsection.
  202         (a)If the difference between the judgment obtained by the
  203  assignee and the presuit settlement offer is:
  204         1.Less than 25 percent of the disputed amount, the insurer
  205  is entitled to an award of reasonable attorney fees.
  206         2.At least 25 percent but less than 50 percent of the
  207  disputed amount, no party is entitled to an award of attorney
  208  fees.
  209         3.At least 50 percent of the disputed amount, the assignee
  210  is entitled to an award of reasonable attorney fees.
  211         (b)If the insurer fails to inspect the property or provide
  212  written or oral authorization for repairs within 7 calendar days
  213  after the first notice of loss, the insurer waives its right to
  214  an award of attorney fees under this subsection. If the failure
  215  to inspect the property or provide written or oral authorization
  216  for repairs is the result of an event for which the Governor had
  217  declared a state of emergency under s. 252.36, factors beyond
  218  the control of the insurer which reasonably prevented an
  219  inspection or written or oral authorization for repairs, or the
  220  named insured’s failure or inability to allow an inspection of
  221  the property after a request by the insurer, the insurer does
  222  not waive its right to an award of attorney fees under this
  223  subsection.
  224         (c)If an assignee commences an action in any court of this
  225  state based upon or including the same claim against the same
  226  adverse party that such assignee has previously voluntarily
  227  dismissed in a court of this state, the court may order the
  228  assignee to pay the attorney fees and costs of the adverse party
  229  resulting from the action previously voluntarily dismissed. The
  230  court shall stay the proceedings in the subsequent action until
  231  the assignee has complied with the order.
  232         (11)This section does not apply to:
  233         (a)An assignment, transfer, or conveyance granted to a
  234  subsequent purchaser of the property with an insurable interest
  235  in the property following a loss;
  236         (b)A power of attorney under chapter 709 that grants to a
  237  management company, family member, guardian, or similarly
  238  situated person of an insured the authority to act on behalf of
  239  an insured as it relates to a property insurance claim; or
  240         (c)Liability coverage under a property insurance policy.
  241         (12)The office shall require each insurer to report by
  242  January 30, 2022, and each year thereafter data on each
  243  residential and commercial property insurance claim paid in the
  244  prior calendar year under an assignment agreement. The Financial
  245  Services Commission shall adopt by rule a list of the data
  246  required, which must include specific data about claims
  247  adjustment and settlement timeframes and trends, grouped by
  248  whether litigated or not litigated and by loss adjustment
  249  expenses.
  250         (13)This section applies to an assignment agreement
  251  executed on or after July 1, 2019.
  252         Section 2. Section 627.7153, Florida Statutes, is created
  253  to read:
  254         627.7153Policies restricting assignment of post-loss
  255  benefits under a property insurance policy.—
  256         (1)As used in this section, the term “assignment
  257  agreement” has the same meaning as provided in s. 627.7152.
  258         (2)An insurer may make available a policy that restricts
  259  in whole or in part an insured’s right to execute an assignment
  260  agreement only if all of the following conditions are met:
  261         (a)The insurer makes available to the insured or potential
  262  insured at the same time the same coverage under a policy that
  263  does not restrict the right to execute an assignment agreement.
  264         (b)Each restricted policy is available at a lower cost
  265  than the unrestricted policy.
  266         (c)The policy prohibiting assignment in whole is available
  267  at a lower cost than any policy prohibiting assignment in part.
  268         (d)Each restricted policy include on its face the
  269  following notice in 18-point uppercase and boldfaced type:
  270  
  271  THIS POLICY DOES NOT ALLOW THE UNRESTRICTED ASSIGNMENT OF POST
  272  LOSS INSURANCE BENEFITS. BY SELECTING THIS POLICY, YOU WAIVE
  273  YOUR RIGHT TO FREELY ASSIGN OR TRANSFER THE POST-LOSS PROPERTY
  274  INSURANCE BENEFITS AVAILABLE UNDER THIS POLICY TO A THIRD PARTY
  275  OR TO OTHERWISE FREELY ENTER INTO AN ASSIGNMENT AGREEMENT AS THE
  276  TERM IS DEFINED IN SECTION 627.7152 OF THE FLORIDA STATUTES.
  277  
  278         (3)The insurer shall notify the insured at least annually
  279  of the coverage options the insurer makes available under this
  280  section. Such notice must be part of and attached to the notice
  281  of premium.
  282         (4)A named insured must reject a fully assignable policy
  283  in writing or electronically. The rejection of a fully
  284  assignable policy shall be made on a form approved by the
  285  office. The form must state that the policy restricts the
  286  assignment of benefits. The heading of the form shall be in 18
  287  point uppercase and boldfaced type and state:
  288  
  289  YOU ARE ELECTING TO PURCHASE AN INSURANCE POLICY THAT RESTRICTS
  290  THE ASSIGNMENT OF BENEFITS UNDER THE POLICY IN WHOLE OR IN PART.
  291  PLEASE READ CAREFULLY.
  292  
  293         (5)This section applies to a policy issued or renewed on
  294  or after July 1, 2019.
  295         Section 3. Section 627.422, Florida Statutes, is amended to
  296  read:
  297         627.422 Assignment of policies or post-loss benefits.—A
  298  policy may be assignable, or not assignable, as provided by its
  299  terms. Any such assignment shall entitle the insurer to deal
  300  with the assignee as the owner or pledgee of the policy in
  301  accordance with the terms of the assignment, until the insurer
  302  has received at its home office written notice of termination of
  303  the assignment or pledge or written notice by or on behalf of
  304  some other person claiming some interest in the policy in
  305  conflict with the assignment.
  306         (1)LIFE OR HEALTH INSURANCE POLICIES.—Subject to its terms
  307  relating to assignability, any life or health insurance policy
  308  under the terms of which the beneficiary may be changed upon the
  309  sole request of the policyowner may be assigned either by pledge
  310  or transfer of title, by an assignment executed by the
  311  policyowner alone and delivered to the insurer, whether or not
  312  the pledgee or assignee is the insurer. Any such assignment
  313  shall entitle the insurer to deal with the assignee as the owner
  314  or pledgee of the policy in accordance with the terms of the
  315  assignment, until the insurer has received at its home office
  316  written notice of termination of the assignment or pledge or
  317  written notice by or on behalf of some other person claiming
  318  some interest in the policy in conflict with the assignment.
  319         (2)POST-LOSS BENEFITS UNDER CERTAIN PROPERTY INSURANCE
  320  POLICIES.—A residential or commercial property insurance policy
  321  may not prohibit the assignment of post-loss benefits unless it
  322  complies with s. 627.7153.
  323         Section 4. Citizens Property Insurance Corporation may not
  324  implement rate changes in 2019 for DP-3 and HO-3 policies unless
  325  the rate filing reflects projected rate savings from this act.
  326  Such rate filing must include an exhibit demonstrating the
  327  impact of this act on indicated rates for DP-3 and HO-3
  328  policies. Citizens Property Insurance Corporation shall provide
  329  policyholders with details on the projected rate savings from
  330  this act.
  331         Section 5. If any provision of this act or its application
  332  to any person or circumstance is held invalid, the invalidity
  333  does not affect the remaining provisions or applications of the
  334  act which can be given effect without the invalid provision or
  335  application, and to this end the provisions of this act are
  336  severable.
  337         Section 6. This act shall take effect July 1, 2019.
  338  
  339  ================= T I T L E  A M E N D M E N T ================
  340  And the title is amended as follows:
  341         Delete everything before the enacting clause
  342  and insert:
  343                        A bill to be entitled                      
  344         An act relating to insurance assignment agreements;
  345         creating s. 627.7152, F.S.; providing definitions;
  346         providing requirements and limitations for property
  347         insurance assignment agreements; providing a burden of
  348         proof; providing that an assignment agreement does not
  349         affect managed repair arrangements under a property
  350         insurance policy; providing that an assignment
  351         agreement does not confer or create authority to
  352         adjust, negotiate, or settle a claim without
  353         authorization under part VI of chapter 626; providing
  354         that an acceptance by an assignee of an assignment
  355         agreement is a waiver by the assignee and its
  356         subcontractors of certain claims against an insured;
  357         specifying an insured’s payment obligations under an
  358         assignment agreement; requiring notice of intent to
  359         initiate litigation; specifying requirements for such
  360         notice; requiring a written response to the notice of
  361         intent to initiate litigation; specifying requirements
  362         for such response; providing for an award of
  363         reasonable attorney fees for certain claims arising
  364         under an assignment agreement; providing for an award
  365         of reasonable attorney fees following a voluntary
  366         dismissal under certain circumstances; requiring the
  367         court to stay proceedings under certain circumstances;
  368         directing the Office of Insurance Regulation to
  369         require insurers to report specified data; requiring
  370         the Financial Services Commission to adopt rules;
  371         providing applicability; creating s. 627.7153, F.S.;
  372         defining the term “assignment agreement”; authorizing
  373         insurers to make available property insurance policies
  374         restricting the assignment of post-loss benefits under
  375         certain conditions; requiring annual notice of
  376         coverage options; requiring a written or electronic
  377         waiver under certain circumstances; requiring the
  378         office to approve a waiver form; providing
  379         applicability; amending s. 627.422, F.S.; providing
  380         that residential or commercial property insurance
  381         policies may not prohibit the assignment of post-lost
  382         benefits; providing an exception; prohibiting Citizens
  383         Property Insurance Corporation from implementing rate
  384         changes for certain policies; providing an exception;
  385         requiring certain rate filings to include specified
  386         information; requiring the corporation to inform
  387         policyholders of certain information; providing
  388         severability; providing an effective date.