Florida Senate - 2021 SENATOR AMENDMENT Bill No. CS for CS for SB 54 Ì130054tÎ130054 LEGISLATIVE ACTION Senate . House . . . Floor: WD . 04/13/2021 12:04 PM . ————————————————————————————————————————————————————————————————— ————————————————————————————————————————————————————————————————— Senator Burgess moved the following: 1 Senate Amendment (with title amendment) 2 3 Delete lines 1832 - 2094 4 and insert: 5 1. Except for a civil action for bad faith failure to 6 settle a third-party claim subject to s. 624.156, not attempting 7 in good faith to settle claims when, under all the 8 circumstances, it could and should have done so, had it acted 9 fairly and honestly toward its insured and with due regard for 10 her or his interests; 11 2. Making claims payments to insureds or beneficiaries not 12 accompanied by a statement setting forth the coverage under 13 which payments are being made;or14 3. Except as to liability coverages, failing to promptly 15 settle claims, when the obligation to settle a claim has become 16 reasonably clear, under one portion of the insurance policy 17 coverage in order to influence settlements under other portions 18 of the insurance policy coverage; or 19 4. When handling a first-party claim under a motor vehicle 20 insurance policy, not attempting in good faith to settle such 21 claim pursuant to subparagraph 1. when such failure is caused by 22 a failure to communicate to an insured: 23 a. The name, telephone number, e-mail address, and mailing 24 address of the person who is adjusting the claim; 25 b. Any issues that may impair the insured’s coverage; 26 c. Information that might resolve the issue in a prompt 27 manner; 28 d. Any basis for the insurer’s rejection or nonacceptance 29 of any settlement demand or offer; or 30 e. Any needed extensions to respond to a time-limited 31 settlement offer. 32 33 Notwithstanding the provisions of the above to the contrary, a 34 person pursuing a remedy under this section need not prove that 35 such act was committed or performed with such frequency as to 36 indicate a general business practice. 37 (8) The civil remedy specified in this section does not 38 preempt any other remedy or cause of action provided for 39 pursuant to any other statute or pursuant to the common law of 40 this state. AAnyperson ismay obtain a judgment under either41the common-law remedy of bad faith or this statutory remedy, but42shallnotbeentitled to a judgment under multiple bad faith 43bothremedies, whether under statute or common law. This section 44 shall not be construed to create a common-law cause of action. 45 The damages recoverable pursuant to this section shall include 46 those damages which are a reasonably foreseeable result of a 47 specified violation of this section by the authorized insurer 48 and may include an award or judgment in an amount that exceeds 49 the policy limits. 50 Section 35. Section 624.156, Florida Statutes, is created 51 to read: 52 624.156 Bad faith failure to settle actions against motor 53 vehicle insurers by third-party claimants.— 54 (1) SCOPE.—This section applies in all actions against any 55 insurer for bad faith failure to settle a third-party claim, 56 whether under statute or common law, for a loss arising out of 57 the ownership, maintenance, or use of a motor vehicle operated 58 or principally garaged in this state at the time of an accident, 59 regardless of whether the insurer is authorized to do business 60 in this state or issued a policy in this state. 61 (2) DUTY OF GOOD FAITH.—In handling claims, an insurer has 62 a duty to its insured to handle claims in good faith by 63 complying with the best practice standards of subsection (4). 64 (3) BAD FAITH FAILURE TO SETTLE.—“Bad faith failure to 65 settle” means an insurer’s failure to meet its duty of good 66 faith, which is the proximate cause of the insurer not settling 67 a third-party claim when, under all the circumstances, the 68 insurer could and should have done so, had it acted fairly and 69 honestly toward its insured and with due regard for the 70 insured’s interests. 71 (4) BEST PRACTICE STANDARDS.—Upon the earlier of receiving 72 notice of a claim or, under subsection (6), a demand for 73 settlement, an insurer must do all of the following: 74 (a) Assign a duly licensed and appointed insurance adjuster 75 to investigate the claim and resolve any questions concerning 76 the existence or extent of the insured’s coverage. 77 (b) Evaluate every claim fairly, honestly, and with due 78 regard for the interests of the insured, consider the extent of 79 the claimant’s recoverable damages, and consider the information 80 in a reasonable and prudent manner. 81 (c) Request from the insured or claimant additional 82 relevant information the insurer reasonably deems necessary. 83 (d) Conduct all verbal and written communications with the 84 utmost honesty and complete candor. 85 (e) Make reasonable efforts to explain to persons not 86 represented by counsel matters requiring expertise beyond the 87 level normally expected of a layperson with no training in 88 insurance or claims-handling issues. 89 (f) Retain all written communications and note and retain 90 all verbal communications in a reasonable manner for a period of 91 not less than 5 years after completion of the claim adjustment. 92 (g) Provide the insured, upon request, with all 93 nonprivileged communications related to the insurer’s handling 94 of the claim. 95 (h) Provide, at the insurer’s expense, reasonable 96 accommodations necessary to communicate effectively with an 97 insured covered under the Americans with Disabilities Act. 98 (i) In handling third-party claims, communicate to an 99 insured: 100 1. The identity of any other person or entity the insurer 101 has reason to believe may be liable; 102 2. The insurer’s evaluation of the claim; 103 3. The likelihood and possible extent of an excess 104 judgment; 105 4. Steps the insured can take to avoid exposure to an 106 excess judgment; 107 5. Requests for financial affidavits and an explanation of 108 the consequences of an insured’s failure to submit a financial 109 affidavit; and 110 6. Any demands for settlement under subsection (6) or 111 settlement offers. 112 (j)1. When a single claim arises out of a single 113 occurrence, the insurer must give fair consideration to a 114 settlement offer that is not unreasonable under the facts and 115 settle, if possible, when a reasonably prudent person, faced 116 with the prospect of paying the total recovery, would do so. 117 When liability is clear, and the claimant’s injuries are so 118 serious that a judgment in excess of the policy limits is 119 likely, the insurer must continue settlement negotiations after 120 a claimant withdraws a settlement demand under subparagraph 121 (6)(c)1. 122 2. When multiple claims arise out of a single occurrence, 123 the combined value of all claims exceeds the total of all 124 applicable policy limits, and the claimants are all unwilling to 125 settle cumulatively within the policy limits, the insurer must 126 attempt to minimize the magnitude of possible excess judgments 127 against the insured. In such circumstances, the insurer is 128 entitled to great discretion to decide how much to offer each 129 respective claimant in its attempt to protect the insured. The 130 insurer may, in its effort to minimize the excess liability of 131 the insured, use its discretion to offer the full available 132 policy limits to one or more claimants to the exclusion of 133 others and may leave the insured exposed to some liability after 134 all the policy limits are paid. 135 (5) CONDITIONS PRECEDENT.—It is a condition precedent to 136 filing an action against an insurer for bad faith failure to 137 settle a third-party claim that the claimant must: 138 (a) Serve a written demand for settlement, as provided in 139 subsection (6), within the full available policy limits of 140 liability in exchange for a release of further liability against 141 the insured; and 142 (b) Unless expressly waived by the insurer, obtain a final 143 judgment in excess of the policy limits against the insured or 144 the insured’s estate, bankruptcy trustee, or successor in 145 interest. 146 (6) DEMAND FOR SETTLEMENT.— 147 (a) A claimant may not place any conditions on acceptance 148 of a demand for settlement other than electing the right to 149 receive a financial affidavit that complies with the 150 requirements of subsection (7). If the claimant exercises such 151 right, the claimant may withdraw the demand for settlement 152 pursuant to paragraph (c). A demand for settlement must be 153 served upon the insurer by certified mail at the address 154 designated by the insurer with the Department of Financial 155 Services under s. 624.422(2). 156 (b) A demand for settlement must do all of the following: 157 1. Identify the: 158 a. Date and location of loss; 159 b. Name, address, and date of birth of the claimant; 160 c. Name of each insured to whom the demand for settlement 161 is directed; and 162 d. Legal and factual basis of the claim. 163 2. Provide a reasonably detailed description of the 164 claimant’s: 165 a. Known injuries caused or aggravated by the incident on 166 which the claim is based; 167 b. Medical treatment causally related to the incident on 168 which the claim is based; and 169 c. Type and amount of known damages incurred and, if any, 170 the damages the claimant reasonably anticipates incurring in the 171 future. 172 3. State the amount of the demand for settlement. 173 4. Place no conditions on acceptance of the demand for 174 settlement other than electing the right to receive a financial 175 affidavit that complies with the requirements of subsection (7). 176 5. State whether the demand for settlement is conditioned 177 on the receipt of a financial affidavit meeting the requirements 178 of subsection (7), and if so, must include a request for such 179 financial affidavit. 180 6. Provide that the claimant and the claimant’s attorney 181 will use the financial affidavit only for the purpose of 182 determining the insured’s assets and liabilities and will not 183 publicly disseminate any information in the financial affidavit. 184 7. Provide a physical address, an e-mail address, and a 185 facsimile number for further communications, including, but not 186 limited to, responses to the demand for settlement. 187 8. Release the insured from any further liability upon the 188 insurer’s acceptance of a demand for settlement which is not 189 withdrawn pursuant to paragraph (c) or accepted pursuant to 190 paragraph (d). 191 (c) A claimant may withdraw a demand for settlement made 192 pursuant to this subsection within 7 days after receiving from 193 the insurer: 194 1. The insured’s financial affidavit; or 195 2. Notice pursuant to subparagraph (7)(b)2. of the 196 insured’s failure to complete the financial affidavit. 197 (d) If an insured refuses to provide to the insurer a 198 financial affidavit that complies with subsection (7), the 199 insurer may accept the demand for settlement without requiring a 200 release of the insured. An insurer that accepts the demand for 201 settlement pursuant to this paragraph does not have any further 202 duty to defend the insured and may not be held liable for 203 damages to the insured if the claimant thereafter obtains an 204 excess judgment against the insured. 205 (7) FINANCIAL AFFIDAVIT.— 206 (a) If a financial affidavit is requested pursuant to 207 subsection (6), the insured has 30 days after the insurer’s 208 acceptance of the claimant’s demand for settlement to provide 209 the completed affidavit to the insurer. If the insured is 210 incapacitated or deceased, a financial affidavit may be 211 completed by the insured’s estate, bankruptcy trustee, successor 212 in interest, or an agent of the insured granted a power of 213 attorney. The affidavit shall be on a form adopted by rule by 214 the department unless such form is not adopted by the 215 department. 216 (b) No later than 35 days after an insurer accepts a demand 217 for settlement which requests a financial affidavit, the insurer 218 shall provide to the claimant or, when the claimant is 219 represented by counsel, to the claimant’s attorney: 220 1. The completed financial affidavit; or 221 2. Notice of the insured’s failure to provide the requested 222 financial affidavit. 223 (c) A financial affidavit must include all of the 224 following: 225 1. The insured’s assets at the time of the loss, including: 226 a. Cash, stocks, bonds, and nonretirement-based mutual 227 funds; 228 b. Nonhomestead real property; 229 c. All registered vehicles; 230 d. All bank accounts; 231 e. An estimated net accounting of all other assets; and 232 f. Any additional information included by the department. 233 2. The insured’s liabilities, including: 234 a. Mortgage debt; 235 b. Credit card debt; 236 c. Child support and alimony payments; 237 d. Other liabilities; and 238 e. Any additional information included by the department. 239 3. For a corporate entity, information on its balance 240 sheet, including the corporate entity’s: 241 a. Cash, property, equipment, and inventory; 242 b. Liabilities, including obligations, rent, money owed to 243 vendors, payroll, and taxes; 244 c. Other information relevant to understanding the entity’s 245 capital and net worth; and 246 d. Any additional information included by the department. 247 4. A list of all insurance policies, stating the name of 248 the insurer and policy number of each policy, which could 249 provide coverage for the claim stated in the demand for 250 settlement served pursuant to subsection (6). 251 5. For natural persons, a statement of whether the insured 252 was acting in the course and scope of employment at the time of 253 the incident giving rise to the claim set forth in the demand 254 for settlement served pursuant to subsection (6) and, if so, 255 providing the name and contact information for that employer. 256 (d) The department shall adopt by rule a form for the 257 affidavit as provided in this section. The form must include all 258 information specified in paragraph (c) and any additional 259 information that the department finds necessary for a claimant 260 to determine an insured’s assets and liabilities. 261 (8) SAFE HARBORS.— 262 (a) When one claim arises out of a single occurrence, an 263 insurer is not liable in a bad faith failure to settle action if 264 the insurer complies with the best practices standards in 265 paragraphs (4)(b) and (i) and subparagraph (4)(j)1. and tenders 266 its policy limits within 60 days after receiving a demand for 267 settlement under subsection (6). In a claim where the insured’s 268 liability is clear and the claimant’s injuries are so serious 269 that a judgment in excess of the policy limits is likely, this 270 safe harbor applies only if the insurer continues, until the 271 trier of fact renders an excess judgment against the insured, to 272 tender policy limits in exchange for a release of the insured. 273 An insurer that meets the requirements of this paragraph is not 274 liable in a bad faith failure to settle action. 275 (b) When multiple claims arise out of a single occurrence 276 and the combined value of all claims exceeds the total of all 277 applicable policy limits, if the insurer globally tenders all 278 applicable policy limits to one or more of the known claimants 279 within 60 days after it receives notice of the loss and complies 280 with the best practices standards in paragraphs (4)(b) and (i) 281 and subparagraph (4)(j)2., such insurer is not liable in a bad 282 faith failure to settle action. This paragraph does not require 283 that an insurer automatically tender policy limits within 60 284 days in every multiclaimant case. 285 (9) RELEASE.—An insurer that accepts a demand for 286 settlement under subsection (6) is entitled to a release of the 287 insured, except as provided in paragraph (6)(d). 288 (10) BURDEN OF PROOF.—In any action for bad faith failure 289 to settle: 290 (a) The claimant must prove by the preponderance of the 291 evidence that the insurer failed to comply with one or more of 292 the best practice standards of subsection (4) and thereby 293 violated its duty of good faith to the insured. 294 (b) If the claimant meets its burden of proof established 295 in paragraph (a), a rebuttable presumption is created that the 296 insurer’s failure to comply with the best practice standards is 297 the proximate cause of the insurer’s bad faith failure to settle 298 a third-party claim. To rebut this presumption, the insurer must 299 prove by the preponderance of the evidence that: 300 1. The insurer’s violation of one or more best practice 301 standards was not the proximate cause of the excess judgment; or 302 2. The insurer availed itself of a safe harbor under 303 subsection (8). 304 (c) In determining whether an insurer in bad faith failed 305 to settle, the trier of fact shall consider all of the 306 following: 307 1. Whether the insurer failed to settle a claim when, under 308 all the circumstances, it could and should have done so, had it 309 acted fairly and honestly toward the insured and with due regard 310 for the insured’s interests. 311 2. Whether the insurer complied with the best practice 312 standards of subsection (4) using the same degree of care and 313 diligence as a person of ordinary care and prudence would 314 exercise in the management of his or her own business. 315 3. Whether the claimant or insured misrepresented material 316 facts to the insurer or made material omissions of fact to the 317 insurer. 318 4. Whether the insured denied liability or requested that 319 the case be defended after the insurer fully advised the insured 320 as to the facts and risks. 321 5. Whether the claimant or insured failed to provide 322 relevant information to the insurer on a timely basis. 323 6. Whether the insurer timely informed the insured of a 324 demand to settle within the limits of coverage, the right to 325 retain personal counsel, and the risk of litigation. 326 7. The insurer’s willingness to negotiate with the claimant 327 in anticipation of settlement. 328 8. The amount of damages the claimant incurred or was 329 likely to incur in the future under the facts known or 330 reasonably available at the time of the insurer’s response. 331 9. If applicable, whether there were multiple third-party 332 claimants seeking, in the aggregate, compensation in excess of 333 the policy limits from the insured; and, if so, whether the 334 insurer breached its duty to attempt to minimize the magnitude 335 of possible excess judgments against the insured and to attempt 336 to settle as many claims as possible within the policy limits in 337 exchange for a release of the insured from further liability. In 338 such circumstances, the insurer is entitled to great discretion 339 to decide how much to offer each respective claimant in its 340 attempt to protect the insured. In its effort to minimize the 341 excess liability of the insured, the insurer may use its 342 discretion to offer the full available policy limits to one or 343 more claimants to the exclusion of others and may leave the 344 insured exposed to some liability after all the policy limits 345 are paid. An insurer does not act in bad faith simply because it 346 is unable to settle all claims in a multiple claimant case. It 347 is a defense to any such claim if the insurer establishes that 348 it used its discretion for the benefit of its insureds and 349 complied with the other best practice standards of this section. 350 10. Additional factors that the court determines to be 351 relevant. 352 (d) The trier of fact, in determining whether an insurer in 353 bad faith failed to settle, must be informed that an excess 354 judgment occurred but may not be informed of the amount of the 355 excess judgment. 356 (11) DAMAGES.—If the trier of fact finds that a claimant 357 has met its burden of proof, an insurer is liable for the amount 358 of any excess judgment. No other damages, including, but not 359 limited to, punitive damages, may be awarded. 360 361 362 ================= T I T L E A M E N D M E N T ================ 363 And the title is amended as follows: 364 Delete lines 110 - 174 365 and insert: 366 settle third-party claim actions against any insurer 367 for a loss arising out of the ownership, maintenance, 368 or use of a motor vehicle under specified 369 circumstances; providing that insurers have a duty of 370 good faith; defining the term “bad faith failure to 371 settle”; specifying best practice standards for 372 insurers upon receiving notice of a claim or a demand 373 for settlement; specifying certain requirements for 374 insurer communications to an insured in handling 375 third-party claims; specifying requirements for the 376 insurer when single and multiple claims arise out of a 377 single occurrence under certain conditions; specifying 378 conditions precedent for claimants filing bad faith 379 failure to settle third-party claim actions; 380 prohibiting claimants from placing conditions on 381 acceptance of a demand for settlement other than 382 electing the right to receive a financial affidavit; 383 specifying requirements for and information that must 384 be included in a demand for settlement; requiring a 385 demand for settlement to release the insured from 386 liability under certain conditions; authorizing a 387 claimant to withdraw a demand for settlement after 388 receiving certain information from an insurer within a 389 certain timeframe; providing that an insurer does not 390 have a further duty to defend if it accepts a demand 391 for settlement under certain conditions; specifying 392 requirements for insureds providing financial 393 affidavits requested by insurers; requiring insurers 394 that accept demands for settlement which request 395 financial affidavits to provide certain information to 396 claimants; specifying requirements for information 397 that must be included in a financial affidavit; 398 requiring the department to adopt a form for financial 399 affidavits by rule; providing that insurers may not be 400 held liable in certain third-party bad faith failure 401 to settle actions if they comply with best practice 402 standards and tender policy limits within a certain 403 timeframe; specifying conditions for applicability of 404 such safe harbor; providing construction; providing 405 that insurers may not be held liable in certain third 406 party bad faith failure to settle actions involving 407 multiple claims if such insurers globally tender 408 policy limits within a certain timeframe; specifying 409 that insurers that accept demands for settlement are 410 entitled to releases of their insureds; providing an 411 exception; requiring claimants to prove in any bad 412 faith failure to settle action by a preponderance of 413 the evidence that the insurer violated its duty of 414 good faith by failing to comply with best practice 415 standards; providing for a rebuttable presumption; 416 specifying factors for the trier of fact to consider 417 in determining whether an insurer in bad faith failed 418 to settle; providing that an insurer has discretion in 419 offers to claimants; providing construction; providing 420 for a defense to claims of bad faith under certain 421 circumstances; requiring the trier of fact to be 422 informed of an excess judgment; prohibiting disclosure 423 of certain judgment information to the trier of fact; 424 limiting damages under certain circumstances; 425 providing that judgment creditors must