Florida Senate - 2019                              CS for SB 714
       By the Committee on Banking and Insurance; and Senator Brandes
       597-02929-19                                           2019714c1
    1                        A bill to be entitled                      
    2         An act relating to insurance; providing a short title;
    3         amending s. 215.555, F.S.; revising the reimbursement
    4         of loss adjustment expenses by the Florida Hurricane
    5         Catastrophe Fund; creating s. 215.55953, F.S.;
    6         requiring the Financial Services Commission, by a
    7         specified date, to establish a certain uniform loss
    8         adjustment expense percentage by rule; specifying
    9         information the commission must consider in
   10         determining certain incurred expenses; requiring the
   11         Office of Insurance Regulation, under certain
   12         circumstances, to advise the commission on adopting a
   13         new uniform loss adjustment expense percentage;
   14         requiring the commission to adopt certain rules under
   15         certain circumstances; providing that adopted rules
   16         are not subject to requirements for a statement of
   17         estimated regulatory costs; amending s. 440.381, F.S.;
   18         providing that certain sworn statements in employer
   19         applications for workers’ compensation insurance
   20         coverage are not required to be notarized; amending s.
   21         624.155, F.S.; deleting a provision that tolls, under
   22         certain circumstances, a period before a civil action
   23         against an insurer may be brought; deleting a
   24         provision authorizing the Department of Financial
   25         Services to return a civil remedy notice for lack of
   26         specificity; prohibiting the filing of the notice
   27         within a certain timeframe under certain
   28         circumstances; amending s. 626.9541, F.S.; providing
   29         that provisions relating to unfair methods of
   30         competition and unfair or deceptive insurance acts or
   31         practices do not prohibit insurers or agents from
   32         offering or giving to insureds certain free or
   33         discounted services or offerings relating to loss
   34         control or loss mitigation; amending s. 627.0655,
   35         F.S.; revising circumstances under which insurers or
   36         certain authorized persons may provide certain premium
   37         discounts to insureds; amending s. 627.4555, F.S.;
   38         requiring life insurers that are required to provide a
   39         specified notice to policyowners of an impending lapse
   40         in coverage to also notify the policyowner’s agent of
   41         record within a certain timeframe; providing that the
   42         agent is not responsible for any lapse in coverage;
   43         exempting the insurer from the requirement under
   44         certain circumstances; amending s. 627.7015, F.S.;
   45         adding circumstances under which certain property
   46         insurers may provide required notice to policyholders
   47         of their right to participate in a certain mediation
   48         program; providing effective dates.
   50  Be It Enacted by the Legislature of the State of Florida:
   52         Section 1. This act may be cited as “Omnibus Prime.”
   53         Section 2. Effective January 1, 2020, paragraph (b) of
   54  subsection (4) of section 215.555, Florida Statutes, is amended
   55  to read:
   56         215.555 Florida Hurricane Catastrophe Fund.—
   58         (b)1. The contract shall contain a promise by the board to
   59  reimburse the insurer for 45 percent, 75 percent, or 90 percent
   60  of its losses from each covered event in excess of the insurer’s
   61  retention, plus, for the purpose of covering loss adjustment
   62  expenses, the lesser of 15 percent of the reimbursed losses or
   63  the uniform loss adjustment expense percentage adopted pursuant
   64  to s. 215.55953 5 percent of the reimbursed losses to cover loss
   65  adjustment expenses.
   66         2. The insurer must elect one of the percentage coverage
   67  levels specified in this paragraph and may, upon renewal of a
   68  reimbursement contract, elect a lower percentage coverage level
   69  if no revenue bonds issued under subsection (6) after a covered
   70  event are outstanding, or elect a higher percentage coverage
   71  level, regardless of whether or not revenue bonds are
   72  outstanding. All members of an insurer group must elect the same
   73  percentage coverage level. Any joint underwriting association,
   74  risk apportionment plan, or other entity created under s.
   75  627.351 must elect the 90-percent coverage level.
   76         3. The contract shall provide that reimbursement amounts
   77  shall not be reduced by reinsurance paid or payable to the
   78  insurer from other sources.
   79         Section 3. Section 215.55953, Florida Statutes, is created
   80  to read:
   81         215.55953 Uniform loss adjustment expense percentage.—
   82         (1)No later than December 1, 2019, the Financial Services
   83  Commission shall establish by rule a uniform loss adjustment
   84  expense percentage for the reasonable reimbursement by the
   85  Florida Hurricane Catastrophe Fund of loss adjustment expenses
   86  incurred in adjusting losses for covered policies under s.
   87  215.555. In determining the reasonable loss adjustment expenses
   88  incurred in adjusting such losses, the commission shall
   89  consider:
   90         (a)The total losses and loss adjustment expenses that have
   91  been incurred by authorized insurers related to losses caused by
   92  covered events as defined in s. 215.555(2)(b).
   93         (b)The actual claims paying capacity of the Florida
   94  Hurricane Catastrophe Fund.
   95         (c)Other information the commission finds is relevant to
   96  determining the reasonable loss expenses incurred in adjusting
   97  losses reimbursable under s. 215.555.
   98         (2)No later than March 1 of the calendar year following a
   99  covered event under s. 215.555, the Office of Insurance
  100  Regulation shall advise the commission as to the necessity of
  101  adopting a new uniform loss adjustment expense percentage. Upon
  102  a recommendation from the Office of Insurance Regulation that
  103  the commission adopt a new uniform loss adjustment percentage,
  104  the commission shall do so by rule no later than December 1 of
  105  the year such recommendation is made.
  106         (3)Rules adopted pursuant to this section are not subject
  107  to the requirements of s. 120.541.
  108         Section 4. Subsection (2) of section 440.381, Florida
  109  Statutes, is amended to read:
  110         440.381 Application for coverage; reporting payroll;
  111  payroll audit procedures; penalties.—
  112         (2) Submission of an application that contains false,
  113  misleading, or incomplete information provided with the purpose
  114  of avoiding or reducing the amount of premiums for workers’
  115  compensation coverage is a felony of the second degree,
  116  punishable as provided in s. 775.082, s. 775.083, or s. 775.084.
  117  The application must contain a statement that the filing of an
  118  application containing false, misleading, or incomplete
  119  information provided with the purpose of avoiding or reducing
  120  the amount of premiums for workers’ compensation coverage is a
  121  felony of the third degree, punishable as provided in s.
  122  775.082, s. 775.083, or s. 775.084. The application must contain
  123  a sworn statement by the employer attesting to the accuracy of
  124  the information submitted and acknowledging the provisions of
  125  former s. 440.37(4). The application must contain a sworn
  126  statement by the agent attesting that the agent explained to the
  127  employer or officer the classification codes that are used for
  128  premium calculations. The sworn statements by the employer and
  129  the agent are not required to be notarized.
  130         Section 5. Subsection (3) of section 624.155, Florida
  131  Statutes, is amended to read:
  132         624.155 Civil remedy.—
  133         (3)(a) As a condition precedent to bringing an action under
  134  this section, the department and the authorized insurer must
  135  have been given 60 days’ written notice of the violation. If the
  136  department returns a notice for lack of specificity, the 60-day
  137  time period shall not begin until a proper notice is filed.
  138         (b) The notice shall be on a form provided by the
  139  department and shall state with specificity the following
  140  information, and such other information as the department may
  141  require:
  142         1. The statutory provision, including the specific language
  143  of the statute, which the authorized insurer allegedly violated.
  144         2. The facts and circumstances giving rise to the
  145  violation.
  146         3. The name of any individual involved in the violation.
  147         4. Reference to specific policy language that is relevant
  148  to the violation, if any. If the person bringing the civil
  149  action is a third party claimant, she or he shall not be
  150  required to reference the specific policy language if the
  151  authorized insurer has not provided a copy of the policy to the
  152  third party claimant pursuant to written request.
  153         5. A statement that the notice is given in order to perfect
  154  the right to pursue the civil remedy authorized by this section.
  155         (c) Within 20 days of receipt of the notice, the department
  156  may return any notice that does not provide the specific
  157  information required by this section, and the department shall
  158  indicate the specific deficiencies contained in the notice. A
  159  determination by the department to return a notice for lack of
  160  specificity shall be exempt from the requirements of chapter
  161  120.
  162         (c)(d) No action shall lie if, within 60 days after filing
  163  notice, the damages are paid or the circumstances giving rise to
  164  the violation are corrected.
  165         (d)(e) The authorized insurer that is the recipient of a
  166  notice filed pursuant to this section shall report to the
  167  department on the disposition of the alleged violation.
  168         (e)(f) The applicable statute of limitations for an action
  169  under this section shall be tolled for a period of 65 days by
  170  the mailing of the notice required by this subsection or the
  171  mailing of a subsequent notice required by this subsection.
  172         (f)A notice required under this subsection may not be
  173  filed within 60 days after appraisal is invoked by any party in
  174  a residential property insurance claim.
  175         Section 6. Subsection (5) is added to section 626.9541,
  176  Florida Statutes, to read:
  177         626.9541 Unfair methods of competition and unfair or
  178  deceptive acts or practices defined.—
  180  CONSTRUCTION.—This section does not prohibit an insurer or agent
  181  from offering or giving to an insured, for free or at a
  182  discounted price, services or other offerings relating to loss
  183  control or loss mitigation with respect to the risks covered
  184  under the policy.
  185         Section 7. Section 627.0655, Florida Statutes, is amended
  186  to read:
  187         627.0655 Policyholder loss or expense-related premium
  188  discounts.—An insurer or person authorized to engage in the
  189  business of insurance in this state may include, in the premium
  190  charged an insured for any policy, contract, or certificate of
  191  insurance, a discount based on the fact that another policy,
  192  contract, or certificate of any type has been purchased by the
  193  insured from:
  194         (1) The same insurer or insurer group, or another insurer
  195  under a joint marketing agreement;
  196         (2) The Citizens Property Insurance Corporation created
  197  under s. 627.351(6), if the same insurance agent is servicing
  198  both policies;, or
  199         (3) An insurer that has removed the policy from the
  200  Citizens Property Insurance Corporation or issued a policy
  201  pursuant to the clearinghouse program under s. 627.3518, if the
  202  same insurance agent is servicing both policies.
  203         Section 8. Section 627.4555, Florida Statutes, is amended
  204  to read:
  205         627.4555 Secondary notice.—
  206         (1) Except as provided in this section, a contract for life
  207  insurance issued or issued for delivery in this state on or
  208  after October 1, 1997, covering a natural person 64 years of age
  209  or older, which has been in force for at least 1 year, may not
  210  be lapsed for nonpayment of premium unless, after expiration of
  211  the grace period, and at least 21 days before the effective date
  212  of any such lapse, the insurer has mailed a notification of the
  213  impending lapse in coverage to the policyowner and to a
  214  specified secondary addressee if such addressee has been
  215  designated in writing by name and address by the policyowner. An
  216  insurer issuing a life insurance contract on or after October 1,
  217  1997, shall notify the applicant of the right to designate a
  218  secondary addressee at the time of application for the policy,
  219  on a form provided by the insurer, and at any time the policy is
  220  in force, by submitting a written notice to the insurer
  221  containing the name and address of the secondary addressee. For
  222  purposes of any life insurance policy that provides a grace
  223  period of more than 51 days for nonpayment of premiums, the
  224  notice of impending lapse in coverage required by this section
  225  must be mailed to the policyowner and the secondary addressee at
  226  least 21 days before the expiration of the grace period provided
  227  in the policy. This section does not apply to any life insurance
  228  contract under which premiums are payable monthly or more
  229  frequently and are regularly collected by a licensed agent or
  230  are paid by credit card or any preauthorized check processing or
  231  automatic debit service of a financial institution.
  232         (2) If the policyowner has a life agent of record or any
  233  agent of record, the insurer must also notify the agent of the
  234  impending lapse in coverage or mail or send electronically a
  235  copy of the notification of the impending lapse in coverage
  236  under subsection (1) to the agent at least 21 days before the
  237  effective date of such lapse. Receipt of such notice does not
  238  make the agent responsible for any lapse in coverage. An insurer
  239  is not required to notify the agent under this subsection if any
  240  of the following applies:
  241         (a) The insurer maintains an online system that allows an
  242  agent to independently determine if a policy has lapsed.
  243         (b) The insurer has no record of the current agent of
  244  record.
  245         (c) The agent is employed by the insurer or an affiliate of
  246  the insurer.
  247         Section 9. Subsection (2) of section 627.7015, Florida
  248  Statutes, is amended to read:
  249         627.7015 Alternative procedure for resolution of disputed
  250  property insurance claims.—
  251         (2) Either at the time a first-party claim within the scope
  252  of this section is filed by the policyholder or at the time
  253  coverage is applied and payment is determined, the insurer shall
  254  notify the policyholder of its right to participate in the
  255  mediation program under this section. The department shall
  256  prepare a consumer information pamphlet for distribution to
  257  persons participating in mediation.
  258         Section 10. Except as otherwise expressly provided in this
  259  act, this act shall take effect July 1, 2019.