Another Busy Week

Week four of Florida’s 2015 Legislative Session brought an even greater surge of energy to our State Capitol.  Our legislators have gotten into their groove now and the busy work of the state is at full speed. Our elected officials are intensely concentrating on the bills they are expected to review, discuss and vote upon, not to mention the intense heavy lifting they must do for the bills they are personally sponsoring. Session is an amazing eight-week period of hard work and midnight oil burning by everyone involved; however, many of us sometimes forget that passing a state budget is the only constitutional duty the Legislature must complete each year when it convenes. We always learn a great deal from our  busy legislators this time of year and we truly appreciate their hard work and dedication on behalf of all Floridians. There’s so much to accomplish in such a short period of time.  We particularly admire the Chairs and Vice Chairs of Committees who have the challenging job of keeping everything moving in accordance with chamber and committee rules, time constraints, and importantly, allowing members of the public to speak and voice opinions. We salute them.

Legislative Activity Updates

                                                                 Property & Casualty Insurance                                                                 (AKA Omnibus Insurance Bill)

CS/SB 258 and CS/HB 165

CS/SB 258 by Sen. Jeff Brandes (R-Hillsborough/Pinellas), this year’s omnibus bill, adds or changes a handful of issues in the insurance code, not the least of which is that it increases the length of time during which an insurer can have to transition to a catastrophe model’s new release. Sen. Brandes’ bill, having passed favorably through two of its three committee stops, will be heard in its last committee, Senate Appropriations, on Monday, 3/23/15, before it hits the full Senate floor.

The companion to Sen. Brandes’ bill, CS/HB 165 by Rep. David Santiago (R-Volusia) also continues to move through the committee process. Rep. Santiago’s measure will be heard tomorrow (Tuesday, 3/31/2015) by the House Government Operations Appropriations Subcommittee at 9:00 a.m. This comes after the bill’s successful passage of its first stop in the House Banking and Insurance Subcommittee.

                                                             Florida Insurance Guaranty Association                                                           (FIGA) Reform Legislation

CS/SB 836 and CS/HB 557

Both of these bills are designed to change the way FIGA accumulates funding when an insurance company insolvency occurs.  The house bill by Rep. Jake Raburn (R-Hillsborough) will be heard be heard in its 3rd and final committee stop this week in Regulatory Affairs and the Senate version by Rep. Jack Latvala (R-Pinellas) will be heard in its 2nd stop in the General Government Appropriations Committee.  We expect (and are hopeful) these bills in to continue to move through the process favorably.

Transportation Network Companies (TNCs)

CS/HB 757; SB 1298; and, CS/HB 817

The TNC bills continue to generate debate in the committees where they are being heard.  TNCs, a relatively new industry in the U.S. and certainly in Florida, don’t currently have specific regulations within Florida Statutes. To date, only local level jurisdictions have had regulations in place to oversee this industry. This year’s TNC bills are attempting to create those state regulations, and if a bill is passed, those regulations will replace the local level regulations. As we have seen, there is a great deal public input from those local jurisdictions on how the regulatory change will impact them directly.  Notwithstanding the battle between local and state regulation, the TNC industry brings transportation services into the 21st century with digital services, price competition, and consumer choice.

CS/HB 817, SB 1298, HB 757 and SB 1326

All of these bills are designed to change the current TNC operations with the intent to provide consumer protections as well as instituting a regulatory framework around TNCs. The debates are fascinating to watch so please let us know how we can loop you in if you want to watch this emerging market in our state and the rest of the country.

CS/HB 817 by Rep. Matt Gaetz (R-Walton), was heard in the House Economic Affairs Committee on Thursday, 3/26 and passed as favorable with a vote of 13 yea’s and 4 nays.

SB 1298 by Sen. David Simmons (R-Orange) was favorably passed by the Senate Banking and Insurance Committee on Monday, 3/23 with a vote of 10 yea’s and 0 nays. It is now on the agenda for the Senate Judiciary Committee for Tuesday, 3/31.

The other two transportation network bills, HB 757 by Rep. Bill Hager (R-Palm Beach) and SB 1326 by Sen. Jeff Brandes (R-Pinellas/Hillsborough) haven’t moved forward since last week’s update.

Citizens Depopulation

SB 1006 and HB 1087

CS/SB 1006 by Sen. Anitere Flores (R-Dade) changes the current “opt out” process for Citizens Take-outs to an “opt in” process where Citizens policyholders must sign an acknowledgment that they want to accept the takeout offer vs. the process where they are acquired by an insurer without any affirmative action on the policyholder’s part. Sen. Flores’ bill was favorably passed by the Senate Banking and Insurance Committee on Monday, 3/23 with 10 yea’s and 0 nays and waits to be heard in the Senate Appropriations Subcommittee on General Government.

CS/HB 1087 by Rep. Michael Bileca (R-Miami/Dade) was voted as favorable by the House Insurance and Banking Subcommittee on Wednesday, 3/25.  The next stop for this bill is the House Regulatory Affairs Committee.

These bills have opposition from those who simply say that if state policymakers like what has happened in the past couple years with the reduction of Citizens market share, these bills will reverse that trend. Those who support the bills say that it’s time Citizens has a “kinder and gentler” approach to depopulation which the Citizens depopulation workgroup, established a few months ago, is currently working on by changing consumer communications and adding other features to attempt to alleviate any supposed scare tactics that Citizens has been accused of lately.

Assignment of Benefits (AOB)  

HB 669 by Rep. John Tobia (R-Brevard); Similar bills, SB 1064 by Sen. Dorothy Hukill (R-Volusia); SB 1210 by Sen. Alan Hays (R-Lake County)

The journey of the House and Senate versions of the Assignment of Benefits (AOB) legislation gets “curiouser and curiouser” (Remember Curious George from you kindergarten days)?  On Monday, 3/23/15, the Senate version of the bill (SB 1064 by Sen. Hukill) was changed and debated in the Banking and Insurance Committee so that it included an amendment narrowly defining how public adjuster apprentices are supervised. The concern among the industry has always been that apprentices were nothing more than neighborhood runners, canvassing door to door to solicit contracts for public adjusting services.  The state public adjuster association has had these same concerns and came to the table with certain insurance industry members to talk through the concept of public adjuster apprentice supervision. This new Senate version of the bill passed and can be viewed by clicking HERE.  Unfortunately, our industry was not unified in its support or opposition of this bill and that always causes a problem for our lack of a cohesive message.  The House version of the AOB bill (HB 669 by Rep. John Tobia) was changed significantly this week at a meeting of the House Civil Justice Subcommittee.  This new version deleted the changes from last week that included reductions in long standing statutory timeframes insurers have to pay claims or to send out the Homeowner’s Bill of Rights.  We know it’s confusing with the various versions of AOB legislation, the stakeholder groups pushing their own agenda, and testimony all over the map, so let us know if we can help in clarifying any of these details. One final note:  Many of the vendors that testified in the House and Senate hearings on the AOB topic this week will have very familiar names to many of our newsletter readers.  Take a peek at previous House and Senate committee meetings with AOB testimony at The Florida Channel video library HERE.

Flood Insurance 

SB 1094 by Sen. Jeff Brandes (R-Pinellas); HB 895 by Rep. Larry Ahern (R-Pinellas)

This past week the Senate’s flood insurance bill (SB 1094) unanimously passed its second committee stop (Community Affairs Committee) with the only discussion being about how to properly define flood mitigation efforts in statute.  One of the environmental groups asked that the bill include many of the provisions in the federal Community Rating System (CRS) benchmarks that qualify for National Flood Insurance Program insurance discounts.  SB 1094 is now in the Rules Committee and if successful there, will head to the Senate floor. The House version of this bill will be heard in its second of three committee stops on Tuesday 3/31/15 in the Appropriations Committee. There are differences between the House and Senate versions of the bill so will keep you posted on when/if those differences get resolved but for all intents and purposes, we believe there will be further flood insurance statute reform in Florida to continue to encourage a private, primary flood insurance market.

Quota Share Reinsurance-Citizens

SB 936 by Sen. Jeff Brandes (R-Pinellas); HB 1307 by Rep. Dan Raulerson

These bills establish a program for private market insurers to remove risk from Citizens with Citizens serving as a reinsurer. Neither bill has been heard in a committee of reference, which may signal that this issue won’t be a topic for discussion this session.

Civil Remedies against Insurers  

SB 1088 by Sen. Jeff Brandes (R-Pinellas)

This measure requires an insured, a claimant, or a person acting on behalf of an insured’s or a claimant’s behalf, to provide an insurer with written notice of loss as a condition precedent to bringing a statutory or common law action for a third-party bad faith action for failure to settle an insurance claim; providing that an insurer is not liable for such claim if certain conditions are met. Sen. Brandes’ measure was on the March 23 (last Monday) agenda for the Senate Banking and Insurance Committee, however, the bill did not get a vote. The measure is again on the committee’s agenda for its meeting tomorrow (3/31/15) and we’ll be present to observe the action.

HB 1197 co-sponsored by Rep. Mike Hill (R-Escambia/Santa Rosa) and Kathleen Passidomo (R-Collier)

This is a very similar House measure to Sen. Brandes’ SB 1088. Just like during the two previous sessions, efforts to amend the laws concerning alleged bad faith by insurers will become highly controversial and fought against hard by the plaintiffs trial bar. With that said, HB 1197 was heard this past Tuesday (3/24/15) by the House Civil Justice Subcommittee where it won committee approval.

Sinkhole Activity Damage Improvement

SB 404 by Sen. Wilton Simpson(R-Hernando)

This measure declares that there is a compelling state interest in enabling property owners to voluntarily finance certain improvements to property damaged by sinkhole activity with local government assistance; ads as a qualifying improvement the repair of sinkhole activity damage under Section 163.08, FS, Property Assessed Clean Energy financing mechanisms; and expands the definition of “blighted area” to include a substantial number or percentage of properties damaged by sinkhole activity which are not adequately repaired or stabilized. Sen. Simpson’s measure is on the agenda to be heard this afternoon at 4:00 p.m. during a meeting of the Senate Finance and Tax Committee.

Property Insurance Appraisal Umpires

HB 491 by Rep. Frank Artilies (R-Miami/Dade); Similar Bill:  SB 744 by Sen. Garrett Richter (R-Lee/Collier)

Rep. Artiles’ bill creates the property insurance appraisal umpire licensing program including continuing education and disciplinary processes under the auspices of the Department of Business & Professional Regulation. This past Wednesday (3/25/15) during a meeting of the House Insurance and Banking Subcommittee an amendment was adopted removing bill text that established a mandatory appraisal process. The removed language was of considerable concern to the industry because many believed it pre-empted the appraisal clause in insurance policies. The problematic language was also removed in the Senate companion bill by the senate Regulated Industries Committee last week. The measure now relates exclusively to licensing and regulation of appraisers and appraisal umpires by DBPR.

Insurance Fraud Reform

SB 1306 and HB 1127

SB 1306 by Sen. Rob Bradley (R-Clay) is on the agenda for the Senate Banking and Insurance Committee for Tuesday, 3/31, the first of its three committee stops.

CS/HB 1127 by Rep. Jennifer Sullivan (R-Lake) was voted as favorable by the House Insurance and Banking Subcommittee on Wednesday, 3/25 and now waits to be heard in the House Appropriations Committee.  This version of the fraud bill removes all the changes to fraud reporting and insurer SIUs. The bill now focuses primarily on PIP fraud. It sunsets the direct support organization for PIP and changes language for healthcare clinic unlicensed activity and un-compensable/unlawful charges. The insurance fraud bills as originally drafted by Sen. Bradley and Rep. Sullivan were crafted to frame the insurance problem in Florida with the collection of fraud statistics on a regular basis.  These concepts will be put on the shelf this year and we expect to see both legislative sponsors re-filing these bills in 2016.

Workers’ Compensation

SB 1060 and HB 1013

CS/SB 1060 by Sen. David Simmons (R-Seminole/Volusia) was heard by the Senate Fiscal Policy Committee on Thursday, 3/26 and voted as favorable with 8 yea’s and 0 nays.  Sen. Simmons’ bill is now on the Senate Special Order Calendar for 4/1. This bill removes the need for legislative ratification for maximum reimbursement allowances and manuals which are approved by a three-member panel for purposes of the Workers’ Compensation Law.

The similar bill, CS/HB 1013 by Rep. Bill Hager (R-Palm Beach) waits to be heard by the House Regulatory Affairs Committee as of 3/20.

Insurer Solvency Reform

SB 1190 and HB 1085

SB 1190by former Senate President Tom Lee (R-Hillsborough) moved forward last week.  It passed through the Senate Banking and Insurance Committee by a 10-0 vote on Tuesday, (3/17/15)  and now waits to be heard in the Senate Appropriations Subcommittee on General Government.  The companion bill, HB 1085 by Rep. David Santiago (R-Volusia) still waits to be heard in the House Insurance and Banking Subcommittee. No movement occurred on either bill this past week.

We’re There So You Don’t Have to Be

It was a great 4th week of session and over the weekend we delightfully participated in the Capital City’s Springtime Tallahassee Festival, along with about 100,000 other festival goers!  The weather had cooled after some rain showers on Thursday and Friday, so it was extra nice watching the parade and visiting with the folks downtown in a near pollen-free environment. For those of you unfamiliar with springtime in Tallahassee, our city literally lives under a blanket of yellow pine pollen for about three weeks. We here at LMA are all about working hard and having fun.  Isn’t that what life is meant for?  With next week’s legislative schedule shortened on Friday to allow legislators and their assistants to return home early for the Easter weekend, we too will pause and say thank you for the blessing of freedom that allows our great nation to celebrate our many religious traditions without fear of threat or reprisal. We hope those of you who celebrate Easter will join us in this quiet moment of thanks.

Lisa and the LMA Team