Six Weeks down-Three Weeks to Sine Die
Another busy week in the Florida Legislature and we are seeing a number of insurance bills starting to move quickly forward or falling completely off the radar. You may notice in this newsletter edition that we’ve dropped a small number of bills off our tracking for the obvious reason that they aren’t going anywhere. We also will be watching for what is sometimes referred to as “trains.” Customarily, as the session clock ticks down, one or two “certain to pass” bills will get loaded up (often by floor amendments) with other bills needing a lift to the finish line. When this occurs it can become extremely difficult to keep track of which bills have been amended onto other bills. We have to stay very, very plugged in to movement of these bills, so we can maintain clarity on changes, and of course, keep you up-to-date. The challenges of the Legislative Session change from week to week, but with the vast experience of the LMA team, we do a pretty good job, if we do say so ourselves. So, with that, let’s check out what happened during the week of April 6-10.
Legislative Activity Updates
Property & Casualty Insurance
(AKA Omnibus Insurance Bill)
CS/SB 258 by Sen. Jeff Brandes (R-Pinellas) and CS/HB 165 by Rep. David Santiago (R-Volusia)
CS/SB 258 by Sen. Jeff Brandes (R-Hillsborough/Pinellas) didn’t make any moves this past week and still remains calendared for second reading on the Senate floor. As we previously reported, Sen. Brandes’ bill makes various changes to statutes relating to property and casualty insurance. Current law provides that the use of a single United States Postal Service zip code as a rating territory for auto insurance is unfairly discriminatory. This bill allows the use of a single zip code as a rating territory if the territory incorporates sufficient actual or expected loss and loss adjustment expenses experience so as to be actuarially measurable and credible. In addition, current law requires the Office of Insurance Regulation to consider projected hurricane losses using a model or method found reliable by the Florida Commission on Hurricane Loss Methodology when reviewing a rate filing. This bill increases from 60 days to 120 days the time an insurer is not required to use the newest version of an approved hurricane model.
CS/HB 165 by Rep. David Santiago (R-Volusia) also sat still last week. Rep. Santiago’s bill also addresses multiple property and casualty issues and at 7:00 p.m. Friday evening (4/10/15), a skinnier version of this bill was released. We will learn more at the Regulatory Affairs Committee meeting tomorrow (Tuesday, 4/14/15) at 1:00 p.m. when this bill is heard in its last committee stop before possibly being considered on the House floor.
We have seen property and casualty omnibus bills get bogged down in past legislative sessions and end up with so much baggage, they didn’t pass. We are watching these two bills closely for the “train effect” we mentioned in our newsletter opening. We’ll keep you posted.
Florida Insurance Guaranty Association
(FIGA) Reform Legislation
CS/SB 836 by Sen. Jack Latvala (R-Pinellas) and CS/HB 557 by Rep. Jake Raburn (R-Hillsborough)
Both bills are awaiting floor action and will be heard this week. SB 836 passed unanimously out of Senate Appropriations and is awaiting Senate Floor action. HB 557 will most likely be heard on the House Floor on Wednesday or Thursday of this week. These measures are a collaborative effort among all stakeholders to give FIGA an additional option for financing when an assessment is triggered. Please let us know if we can provide further detail. This will be the 3rd year FIGA reform has been attempted and as we all know, 3 times is the charm!
Transportation Network Companies (TNCs)
CS/HB 757 by Rep. Bill Hager (R-Palm Beach); SB 1298 by Sen. David Simmons (R-Seminole/Volusia); and, CS/HB 817 by Rep. Matt Gaetz (R-Walton)
The newspapers have been full of “Uber articles” for the last couple of weeks and for sure Florida’s elected policymakers have spent months now speaking to local organizations and groups about what Uber and others like them can bring to the transportation industry. Much of those conversations have been about friendlier environments for entrepreneurs, leading innovation, and new technologies. We have already seen how Uber’s high-tech transportation service is catching on all over the country and folks seem to love being able to sign up via the Internet and call a driver any time. The system is cashless, monitored, and seems to be providing good cars for transport. We have heard quite a few folks testify at committee hearings about how Uber allows them to work part-time, full-time and provides decent earnings. We don’t foresee a great deal of success for those opposing this hi-tech system in today’s hi-tech world. We’ll see how it all comes out here in Florida by the end of session.
CS/HB 817 by Rep. Matt Gaetz (R-Walton) didn’t move last week and still waits to be scheduled on the House calendar.
SB 1298 by Sen. David Simmons (R-Orange) passed the Senate Appropriations Committee on Thursday (4/9/15) with 14 yeas and 2 nays and was placed on the Senate’s Special Order Calendar for tomorrow (Tuesday, 4/14/15). Sen. Simmons explained to the committee that his bill fills the gap in insurance coverage needed for transportation network companies and their drivers. He went on to say that due to the work of the TNC and insurance industries, a consensus on that coverage is close to being reached. Also during the meeting, two amendments were adopted. One spoke to coming up with the proper definition of dwellings that will be subject to the bill, and the other explained where the bill is today regarding the gap coverage being addressed by the legislation. Mears Transportation, several Florida taxi cab associations, and Florida Bankers Association spoke in support of Sen. Simmons’ measure with Uber speaking against.
Both the House and Senate proposals would require the transportation network companies to provide at least $1 million in liability coverage for death, bodily injury and property damage while passengers are in the vehicles. For the “on-call” time, the Senate wants the driver or company to have coverage of at least $100,000 for death and bodily injury, and at least $50,000 for property damage. The House is offering minimums of $50,000 for death and bodily injury and $25,000 for property damage.
SB 1006 by Sen. Anitere Flores (R-Miami/Dade) and HB 1087 by Rep. Michael Bileca (R-Miami/Dade)
CS/SB 1006 and HB 1087 are very similar, as we’ve mentioned before. Both bills restrict takeout offers to once every six months per policy; however, Sen. Flores’ bill (CS/SB 1006) restricts the offers only if the policyholder declines a takeout offer first and does not have language that allows the policyholder to return to Citizens as a renewal if the initial premium from the takeout insurer is more than 10% of the premium estimated when the takeout offer is made. There are other differences as well and we expect these two bills, if they continue to proceed, to become a part of negotiations between the Senate and the House as we progress to the end of session.
SB 1006 by Sen. Anitere Flores was heard by the Senate Appropriations Subcommittee on General Government on Wednesday (4/8/15) and she explained the bill as “hopefully making the depopulation program a lot more consumer friendly.” Two amendments were offered during the meeting. One made sure a policyholder’s information is kept confidential and only used for depopulation purposes and the other clarified that an agent with Citizens must maintain, at all times, an appointment with at least one Florida admitted market carrier. The bill passed favorably with 7 yeas, 0 nays, and the outspoken support of several members of the committee, as well as, Citizens, the FAIA and the PIA. The next and last stop for this measure before it hits the Senate Floor is the Senate Appropriations Committee.
CS/HB 1087 by Rep. Michael Bileca (R-Miami/Dade) made a bit of progress last week when it was placed on the House Calendar.
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)
Sadly, this past week there was no forward movement on these mission critical bills. LMA and associated stakeholders who have been working diligently throughout session to move legislation designed to curb the extreme abuses occurring through the use of AOBs continue to push the above measures as hard as possible. We will keep you posted on progress and developments.
SB 1094 by Sen. Jeff Brandes (R-Pinellas); HB 895 by Rep. Larry Ahern (R-Pinellas)
As we noted in last week’s newsletter, Sen. Brandes’ measure (SB 1094) has successfully passed all committees of reference and is close to winning passage by the full Senate. This past Thursday (4/9/15) the Brandes bill was placed on the Senate’s Special Order Calendar for possible floor action tomorrow (Tuesday, 4/14/15). Rep. Ahern’s House version of the flood insurance bill (HB 895) is scheduled to be heard tomorrow (4/14/15) during a meeting of the House Regulatory Affairs Committee. Once Rep. Ahern’s bill clears this last committee it will be ready for consideration on the House floor at leadership’s discretion. Should this flood legislation pass and become law, it will help complete the endeavor stated early last session to create in Florida a private-market primary flood insurance alternative to the flood policies sold through the NFIP.
Quota Share Reinsurance-Citizens
SB 936 by Sen. Jeff Brandes (R-Pinellas); HB 1307 by Rep. Dan Raulerson
These measures establish a program for private market insurers to remove risks from Citizens Property Insurance Corporation with the state-run insurer serving as a reinsurer. As we reported last week, neither bill has been able to gain traction in their committees of reference and for the most part, committee and subcommittee meetings have all but come to an end. It appears doubtful these measures will be considered further this session.
Civil Remedies against Insurers
HB 1197 co-sponsored by Rep. Kathleen Passidomo (R-Collier) and Mike Hill (R-Escambia/Santa Rosa); SB 1088 by Sen. Jeff Brandes (R-Pinellas)
These measures require an insured, a claimant, or a person acting on behalf of an insured or a claimant, 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 suit for failure to settle an insurance claim; providing that an insurer is not liable for such claim if certain conditions are met. This scenario is often referred to as a “safe harbor” for insurers should they meet the requirements that the proposed legislation would establish. Both the House and Senate versions of this legislation have found it very difficult to gain traction during this session’s committee process with strong opposition coming from the trial bar and other interests. As we noted in an earlier newsletter, on March 24 Rep. Passidomo’s measure passed the subcommittee she presides over, the House Civil Justice Subcommittee. More recently, however, the Representative has acknowledged that her measure is likely dead for this session but has openly stated that she intends to file the proposal again during the 2016 Legislative Session. Sen. Jeff Brandes’ highly similar bill (SB 1088) is most likely finished this session as well because after two attempts the measure was unable to secure approval from the Senate’s Banking & Insurance Committee. We will keep you posted on developments but don’t expect any positive movement on either bill this week.
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. Ultimately, the bill allows local governments to redevelop sinkhole damaged land using funding generated through tax increment financing.
This past Friday (4/10/15) Sen. Simpson’s bill was placed on the Senate’s Second Reading Calendar for this week so it is possible the measure could see floor action by the end of this week.
Property Insurance Appraisal Umpires
HB 491 by Rep. Frank Artiles (R-Miami/Dade); Similar Bill: SB 744 by Sen. Garrett Richter (R-Lee/Collier)
These bills create the property insurance appraisal umpire licensing program including continuing education and disciplinary processes under the auspices of the Department of Business & Professional Regulation. The differences we discussed in last week’s newsletter between the House and Senate versions in the areas of exemptions from licensure, qualifications for licensure and prior experience requirements remain. Sen. Richter’s bill also has a much more expansive definition of the terms “appraiser” and “appraisal” than Rep. Artiles’ House bill. The Senate bill describes “appraisal” as the process defined in the property insurance contract for determining the amount of the loss once coverage is established. Rep. Artiles’ measure (HB 491) is scheduled to be heard tomorrow (Tuesday, 4/14/15) during the House Regulatory Affairs Committee meeting, the bill’s last committee stop. If it passes, the measure could then be heard on the House floor at leadership’s discretion. Sen. Richter’s measure (SB 744) must now be approved by the Senate Appropriations Committee, its last committee stop as well. However, as of the release of this newsletter, we have yet to see a Senate Appropriations meeting agenda for this week. We will keep you posted.
Insurance Fraud Reform
SB 1306 by Sen. Rob Bradley (R-Alachua/Bradford) and HB 1127 by Rep. Jennifer Sullivan (R-Lake/Orange)
SB 1306 by Sen. Rob Bradley (R-Clay), which was amended to remove all additional fraud reporting and SIU changes, deals with PIP fraud only, cleans up language for healthcare clinic unlicensed activity and un-compensable and unlawful charges, and sunsets the direct support organization for PIP, unanimously passed the Senate Criminal Justice Committee on Tuesday, 4/7 with the support of DFS and no debate. Sen. Bradley defined the bill as one that “reduces unnecessary government”. The next and last committee stop for this bill is Senate Appropriations.
CS/CS/HB 1127 by Rep. Jennifer Sullivan (R-Lake), which is identical to SB 1306, passed the House Appropriations Committee last week as Rep. Sullivan categorized her bill as one that “gives the CFO’s office more tools to fight insurance fraud”. As expected the CFO’s office supports the bill. The bill was slated for the Health & Human Services Committee next but was removed from that Committee’s schedule and now must clear the House Judiciary Committee. This committee will hear the bill tomorrow (Tuesday, 4/14/15) when it meets at 9:00 a.m. Both of these bills maintain current law on fraud reporting, special investigative units and focuses mostly on PIP fraud.
SB 1060 by Sen. David Simmons (R-Seminole/Volusia) and HB 1013 by Rep. Bill Hager (R-Palm Beach)
CS/SB 1060 by Sen. David Simmons (R-Seminole/Volusia), which removes the need for legislative ratification for maximum reimbursement allowances and manuals that are approved by a three-member panel for purposes of the Workers’ Compensation Law, was heard on the Senate floor last week and passed unanimously with 40 yeas.
CS/HB 1013 by Rep. Bill Hager (R-Palm Beach), the house companion to SB 1060, has not moved since 3/20 and still waits to be heard the House Regulatory Affairs Committee.
We are watching these two bills with much interest as they will delegate authority to the DFS Division of Workers’ Compensation, in lieu of the State Legislature. As we mentioned last week, we are very sensitive to the transfer of authority away from the Legislature. We’ll keep you posted.
Insurer Solvency Reform
SB 1190 by former Senate President Tom Lee (R-Hillsborough) and HB 1085 by Rep. David Santiago (R-Volusia)
As we noted in last Monday’s (4/6/15) newsletter, SB 1190 by former Senate President Tom Lee (R-Hillsborough) was scheduled to be heard by the Senate Appropriations Subcommittee on General Government on Wednesday (4/8/15). The bill, however, was Temporarily Postponed by the subcommittee and it is highly doubtful the bill will have another opportunity this session for such a hearing. The companion bill, HB 1085 by Rep. David Santiago (R-Volusia) has been unable to successfully move through its committees of reference and is most likely finished for this session.
We’re There So You Don’t Have to Be
Whew….what a week. It’s that time in session where we step back, look at where we are, take a deep breath, and push on toward the finish line. As you know, this is also the time when bills are heard, debated, and voted upon on the Senate and House floors. Compromise becomes the word of the day as our legislators pull together the best language possible from the bills they’ve been pouring over for the past several weeks to create laws that hopefully make our state so great. So, stay tuned as we do our best to win the day for Florida’s citizens. And we never forget all that you do to help us! Our very best,
Lisa and the LMA Team