Legislative committee meetings of Feb. 4-7 & Feb. 11-15
It’s been a busy two weeks of House and Senate Committee meetings. During a “committee week” the full House and Senate do not meet as a body in their respective chambers (often called “floor session”) but rather individual substantive committees meet to hear proposed legislation as bills make their way through the process. To see a list of the various committees click here for the House and here for the Senate. The formal 60-day legislative session starts on March 5 with more committee meetings and eventually “floor” action by the full House and Senate in April and early May.
Governor DeSantis continues his frenzy of energy with press conferences and events on everything from school safety, as he respectfully remembered all those who perished in the Parkland High School shootings last year, to his visit with the Israel Defense Forces organization.
The Governor’s budget on topics from the environment to transportation to education and beyond were presented in the applicable committees as his “Bold Vision for a Brighter Future” theme resonated throughout the Capitol. The Florida House of Representatives and the Senate will release their budgets in the coming weeks and all three have to agree by session’s end. Remember, the budget is about public policy, not about the money!
Assignment of Benefits (AOB) reform and the broader issue of excessive litigation was debated in several house and senate committees with those representing the trial lawyers insisting that assignments provide consumer protections, and insurance company representatives, defense lawyers, consumers who have been harmed by AOBs, and actual vendors who don’t use AOBs saying otherwise. Senate Banking and Insurance Chairman Doug Broxson said at one point “I’m disappointed. I think this is a bipartisan issue. The people that are represented by the Democrats in southeast Florida have major issues: their constituents. I would not want to deliver the message that to protect five law firms, they’re willing to let everyone else pay for their fees.”
Said another way, CaseGlide CEO Wesley Todd presented a similar view in a Demotech-sponsored June 2018 webinar and said, “How would you feel if each insurance company were paying $50 million a year to deal with these unscrupulous contractors? What about if the legislature was giving a small set of trial lawyers $1 billion a year? And what if you had to write a $400 check each year to contractors and their lawyers? That’s a different way of looking at this issue. Because that’s what is happening.”
Here’s this week’s update on AOB and other bills of interest, among the over 2,000 bills filed, with about half of those being bills related to a specific appropriations request. Updates are in red or begin in red in the case of AOB.
Assignment of Benefits (AOB) – At the 3rd and 4th meetings (February 4 and February 11) of the Senate Banking & Insurance Committee, Chairman Doug Broxson (R-Pensacola) guided the committee through discussions with Insurance Commissioner David Altmaier, Citizens CEO Barry Gilway, and other stakeholders who heeded Senator Jeff Brandes’ warning that this problem is a pandemic, spreading from South Florida north to Tampa, Orlando and beyond. The 2019 session marks the seventh legislative session that AOB reform has been considered.
The committee meeting provided the baseline discussion and testimony that’s been heard many times in the previous six sessions, in what’s become a “habitual battle between insurance companies and attorneys,” to quote former Justice Ken Bell, representing an insurance industry group. Unfortunately, at the February 11, 2019 meeting, Senator Tom Lee filed an amendment that would take away the simple fix of Sen. Broxson’s SB 122 (the bill would simply remove 3rd parties from standing in the shoes of policyholders for lawsuit purposes by removing the incentive of one-way attorney fees for anyone other than the insured) and Senator Lee’s idea was to provide some limited requirements for 3rd parties to comply with the “Duties After a Loss” property insurance policy provisions.
The back and forth between Senator Lee and Broxson went like this:
“My experience over the past few years is that you can’t trust this process,” Senator Lee said. “Much like the insurance business is all about leverage, so, too, is this Legislature.”
Senator Broxson responded “This is the 18th bill filed since 2013 (on AOBs). Fifteen different Banking and Insurance Committee chairs. What have we passed? Zero.”
Senator Brandes, who has tremendous legislative instincts, sensed the bill was in trouble so made a motion that was granted so the bill would be “temporarily postponed.” This maneuver was to prevent the bill from being defeated in case of a 4 to 4 vote…a tie vote for purposes of the legislature kills a bill. The Committee then adjourned with no forward movement. Senator Brandes later said that all sides needed to regroup and continue to work on this.
The one-way attorney fee law requires insurance companies to pay the attorney fees of policyholders who sue their company and prevail – even if the award or settlement is just one-dollar more than a previous payment or offer. It was meant to protect policyholders’ legal rights but has been used and abused by third-party contractors and attorneys to sue carriers with or without a policyholder’s permission.
This bill could change significantly throughout the session depending on stakeholder input/feedback, testimony during committee hearings, and other negotiations. We will keep you posted.
Another AOB bill, HB 357 by Rep. Brett Hage (R-The Villages) reduces the time period from 90 to 30 days within which a contractor must begin to perform certain work on residential real property after receiving initial payment; it also reduces from 60 to 30 days the time period for the contractor to perform substantial work on such property – work equal or greater to the amount already paid. It also removes an exemption from permitting requirements for certain solicitors, salespersons, and agents using sample catalogs or brochures. It has a similar bill in the Senate (SB 420) by Senator Dennis Baxley (R-Lady Lake).
Also filed is HB 359 by Rep. Javier Fernández (D-Coral Gables) which has a lot in common with some of the AOB consumer safeguard bills of the 2018 session. The bill requires the third-party who was assigned the AOB to send a copy of the AOB to the insurance company within 3 days after being executed “by all named insureds”; maintain records of services provided; cooperate with the insurance company in its investigation of the claim, including providing copies of records within 7 days; and provide a written, itemized, per-unit cost statement of services actually performed. Prior to filing a lawsuit, the third-party must participate in an appraisal or other alternative dispute resolution method in the policy and submit to carrier examinations under oath. They must also agree to hold all named insureds harmless for payment beyond the policy deductible, regardless of whether the AOB is later deemed invalid. The bill also shifts the burden onto the party seeking relief to demonstrate the insurer wasn’t prejudiced in handling the claim.
We are following all of these bills and will report on developments as they occur.
Many believe a solution to AOB abuse must also involve reform of Florida’s Bad Faith law. We’ve covered this on The Florida Insurance Roundup podcast episode on Bad Faith (and listening to former OIR General Counsel Belinda Miller’s comment beginning at 11:42 into the program is instructive about the market being “out of balance.”)
(For a recap of last year’s failed reform efforts, read LMA Backgrounder: Assignment of Benefits (AOB) 2018. For the complete picture of AOB Abuse in Florida and what we’re doing about it, visit our AOB webpage.)
Omnibus Insurance Bill – This session’s “catch-all” bill for everything else insurance is HB 301 filed by Rep. David Santiago (R-Deltona) and includes some of the elements of Senator Broxson’s SB 122 one-way attorney fee bill. Some items in the bill have major policy implications, like lowering the threshold for surplus lines insurers to continue their push into admitted markets, capping Citizens Property Insurance rates in Monroe County to 5% versus the current 10%, and provisions on Personal Injury Protection (PIP) deductibles. The bill passed its first committee stop in the House Insurance and Banking subcommittee and it moves onto the Civil Justice Subcommittee. There was much discussion among the trial lawyer groups about their disagreement with the bill’s provision providing for the appraisal process to serve as an alternative dispute resolution platform, triggered when a civil remedy notice is filed. The insurance industry discussed that the Civil Remedy process has become an indicator of litigation, not of consumer dissatisfaction, pointing to Insurance Commissioner Altmaier’s discussion of the low complaint ratios post Hurricanes Irma and Michael. A similar bill in the Senate SB 714, by Senator Jeff Brandes, has not been heard.
Bodily Injury Liability – SB 896 by Senator Jeff Brandes is titled, “Responsible Roadways Act,” and was filed on February 8 and eliminates Personal Injury Protection coverage after a certain date. Bills to repeal PIP passed the Florida House over the past two years only to die in the Senate. A recent study shows Florida drivers pay the third-highest auto insurance premiums in the country. Repealing PIP would save Florida drivers about $81 annually. Florida remains one of two states that do not require bodily injury coverage, under our current nearly 50 year-old “no-fault” auto insurance system. (See LMA Backgrounder: Personal Injury Protection for more details on the history of PIP reform and the failed 2018 bills, the latest data, and past committee and stakeholder discussions.)
Hurricane Michael Reimbursement – Senator Bill Montford (D-Tallahassee) whose district includes some of the worst hit areas of the storm, filed SB 376 that would allot up to $50 million a year from the state Land Acquisition Trust Fund for the 14 counties that suffered damage. The trust is funded by doc stamp taxes for land and water conservation and last year brought in $870 million.
In the House, Rep. Brad Drake (R-DeFuniak Springs) has filed HB 191, to create the Northwest Florida Rural Inland Affected Counties Recovery Fund. The fund would provide grants in the inland counties of Calhoun, Gadsden, Holmes, Jackson, Jefferson, Liberty and Washington counties using 5% of the $2 billion BP Oil Spill Deep Horizon settlement, which is $100 million. The bill got a boost recently from Senate Appropriations Chairman Rob Bradley, who expressed willingness to consider a broader use of oil spill funding.
Courts – SB 328 by Senator Jeff Brandes (R-Pinellas) seeks to shift court cases that are now heard in county court to be heard in the circuit court. Reactions are mixed with some saying that circuit court dockets are more jammed than county court dockets so it will take longer to get cases resolved; others say it will force more settlements because of the delay. The bill was unanimously passed by the Judiciary Committee and heads to the Infrastructure and Security Committee. HB 337 by Rep. Tom Leek (R-Daytona Beach) is similar, with both bills looking to shift the docket makeup of county and circuit courts with the aim to redistribute caseload to purportedly make the court system more efficient. This bill has not been heard in committee to date.
Autonomous Vehicles – HB 311 represents the on-going quest to balance proper regulation with encouraging Florida’s developing autonomous vehicle (AV) market. The bill, sponsored by Rep. Jason Fischer (R-Jacksonville), himself an engineer, covers a lot of ground. It allows fully AVs to operate regardless of the presence of a human operator; provides that the automated driving system is deemed the operator when the system is engaged; authorizes the Florida Turnpike Enterprise to fund & operate test facilities; provides requirements for on-demand AV networks to operate; and revises registration requirements for AVs. SB 660 in the Senate by Senator Jeff Brandes (R-Pinellas) is comparable. Neither bill has been heard in a committee.
Communications While Driving – Where efforts failed last year to make texting while driving a primary offense (from the current secondary offense, where you can be ticketed during a traffic stop made for another reason), this year’s efforts so far are concentrated on the much broader distracted driving created by any wireless communications device.
SB 76 by Senator Wilton Simpson (R-Trilby) and HB 107 by Rep. Jackie Toledo (R-Tampa), essentially bar any hand-held devices while driving. SB 76, scheduled to be heard in the Infrastructure and Security Committee on 2/19/19, creates the “Florida Ban on Wireless Communications Devices While Driving Law”; prohibiting a person from operating a motor vehicle while listening or talking on a wireless communications device for the purpose of voice interpersonal communication. It also makes it a primary offense. So instead of just prohibiting texting, it would include listening or talking on such a device for voice as well as non-voice communication. Physically touching and holding the phone would be against the law, Rep. Toledo explained. Exceptions are radio broadcasts, navigation assistance, and safety-related alerts.
Concealed Weapons Licenses – SB 108 by Senator Lauren Book (R-Plantation) transfers the concealed weapons licensing program of the Department of Agriculture and Consumer Services to the Department of Law Enforcement (FDLE).
Property-Assessed Clean Environment – HB 63 by Rep. Ray Rodrigues (R-Fort Myers), would allow the use of Property-Assessed Clean Environment (PACE) funds to get folks off septic tanks and connected to municipal sanitary sewer systems or to retrofit to an advanced onsite treatment system. An identical bill, SB 282, has been sponsored in the Senate by Senators Ben Albritton (R-Bartow) and Joe Gruters (R-Sarasota).
Smoking on Beaches – Smoking on public beaches would be prohibited under SB 218 by Senator Joe Gruters (R-Sarasota) who hails from an area consistently on the Top 10 list of beaches in the country. Doing so would be a civil infraction with a maximum penalty of $25 or 10 hours of community service.
Attorney Fees in Injunctions – HB 297 by Rep. Chuck Brannan III (R-Lake City) would prohibit attorney fee awards in certain protective injunction proceedings, including domestic violence cases.
Homeowners Insurance Policies – SB 380, by Senator Brandes is a “glitch bill” that fixes an oversight in last year’s HB 1011 which said that property insurance policies must prominently display that they don’t provide flood or other coverages. HB 1011, however, didn’t contemplate “endorsement” of coverages onto property insurance policies, so SB 380 fixes this, as will a pending House companion bill. The bill is scheduled for hearing on Tuesday, 2/19/19 in the Senate Banking and Insurance Committee. The House companion, HB 617 has not been heard in a House Committee.
Disclosure of Sinkhole Activity – Landlords would have to disclose sinkhole activity to renters under SB 392 by Senator Gary Farmer (D-Ft. Lauderdale). This includes suspected, known, or reported activity.
Red Light Cameras – Efforts resume in the Florida legislature this year to ban the use of red-light cameras by local law enforcement in Florida’s 67 counties and 435 municipalities. The state Supreme Court ruled unanimously last year, clarifying the right of municipalities to use third-party contractors to assist in the traffic infraction process. The Court found that local governments have the right “to contract with a private third-party vendor to review and sort information from red light cameras… before sending that information to a trained traffic enforcement officer, who determines whether probable cause exists and a citation should be issued.”
HB 6003 by Rep. Anthony Sabatini (R-Clermont) would do away with the equipment and the trained officers currently allowed under the Mark Wandall Traffic Safety Program. The bill was passed on January 23 by the Transportation & Infrastructure Subcommittee and has its next stop in the Appropriations Committee. There’s a similar bill (SB 622) in the Senate, sponsored by Senator Brandes. Last July, a federal judge sided with more than 70 cities and counties in dismissing a class action seeking refunds for motorists who had been ticketed after the cameras photographed those running red lights.
Possession of Firearms on School Property – People, presumably including students, would be allowed to carry a gun in a vehicle on school property under HB 6005 by Rep. Cord Byrd (R-Jacksonville Beach) and Rep. Anthony Sabatini (R-Clermont). This includes any preschool, elementary, middle, junior high, secondary school, career center, or postsecondary school, whether public or nonpublic.
Rep. Sabatini is also sponsoring HB 6007 which would remove the current prohibition against those with concealed carry permits from taking their gun to school. The bill would allow such licensed college and university students to carry guns into the classroom. Sabatini has been quoted as saying “it’s a natural corollary to begin allowing good people to arm themselves on college campuses to prevent the next mass shooter,” following the state’s effort to allow trained teachers to carry guns in the classroom in the aftermath of the Valentine’s Day 2018 mass shooting at Marjorie Stoneman Douglas High School in Parkland, Florida.
Pet Leasing – Calling it a predatory and deceptive practice, Senator Annette Taddeo (D-Miami) last week filed SB 316 which would regulate the contracts for the sale or lease of pets. Just as with expensive cars, a lease-to-own practice allows people to make payments on pets, usually expensive pure breeds, until they own them. The ASPCA says all but six of the roughly 65 puppy-selling stores in Florida offering leasing options.
LMA Newsletter of 2-18-19