Love is a Many Splendid Thing….
…Or it sure seemed so the last week of Session. Many tributes and teary goodbyes were presented by departing legislators who have served their term limit and accolades abounded among their fellow lawmakers. Welcomes and thanks started first thing in both the House and the Senate on last Monday morning and filled quite a few moments of the last week. We expected this…we ARE human and it is a special time in the session, so we watched and listened and waited for the bills to hit the House and Senate chamber floors. We learned a few more things about some of our leaders…it was all good. So, we had our list of bills, with high hopes that the good bills we have been supporting would come to a GOOD end. Some did, some didn’t. This newsletter tells you how it rolled and what we saw…
Lightened Citizens Reform Package Passed by Florida Legislature
Senate Bill 1672 Now Heads to Governor’s Desk
Thursday 5/1/14- The Florida Senate gave final legislative authorization for a bill (SB 1672) sponsored by the Senate Banking & Insurance Committee and Chairman David Simmons (R-Seminole/Volusia) that will revise certain aspects of Citizens Property Insurance Corporation and also contains provisions to aid Citizens and private market insurers in the war against property insurance fraud. The final passage of a bill addressing Citizens comes as a surprise to many observers considering this is an election year and just last session the Legislature passed a series of comprehensive reforms to the state-run insurer. This year’s measure is, however, a much reduced version of the bill originally filed by the Senate’s insurance committee after the House this past Tuesday amended out of the bill a number of significant provisions, including allowing surplus lines carriers to participate in the Citizens Clearinghouse, the creation of a commercial clearinghouse and a proposed revision to Citizens’ policyholder assessment caps. This past Thursday the Senate concurred with the House’s amendments and granted final passage to the bill. The much reduced version of the measure now headed to the Governor’s office contains the following substantive provisions:
•Prohibits insurance agents from directly or indirectly accepting compensation, inducement or other rewards from a windstorm mitigation inspector for referral business.
•Prohibits a public adjuster or apprentice from entering into a contract, or accepting a power of attorney that vests in the PA the authority to choose entities that will perform the repair work.
•Requires Citizens procurement protests be transferred to the Division of Administrative Hearings (DOAH). Specifies that Citizens Board of Governors is “agency head” for the purposes of issuing a final order. This provision emanated from the recent independent adjuster claims bid that was released in late 2013 and when the successful bidders were announced in February 2014, over 15 firms sent in letters of protest about the decision, the largest number of complainants in a government bid process in recent history. Many felt it necessary to revise how Citizens bid protests should be handled.
•Requires Citizens to stop offering new commercial-residential policies providing multi-peril coverage and, instead, allows it to continue issuing commercial-residential policies X-wind. Allows Citizens to continue renewing commercial residential multi-peril policies on buildings insured by Citizens on June 30, 2014 under multi-peril policies.
•Requires Citizens to produce an annual report of borrowing capacity, claims-paying capacity, and bonding/debt financing ability.
•Prohibits windstorm mitigation inspectors from offering/delivering compensation to insurance agents for referrals; prohibits insurance agents/customer reps and employees of insurance agencies from accepting referral fees.
•Allows insurers to exempt from independent verification forms completed by an authorized mitigation inspector that possesses a quality assurance program approved by the insurer. Provides that a mitigation verification form provided to Citizens is not subject to independent verification/re-inspection, absent material changes to the structure, if the form was signed by an authorized mitigation inspector and submitted to a quality assurance program approved by Citizens.
•Prohibits contractors from paying, waiving, or rebating all or part of an insurance deductible applicable to covered property for which the payment of repairs will be made from proceeds of a property insurance policy; imposes a 3rd degree felony penalty for violations.
Stopping the Flood of Concern with a Balanced Flood Insurance Bill
So many of you have followed the flood insurance journey that started with the federal 2012 Biggert-Waters Flood Insurance Reform Act (BW-12) which raised rates on certain coastal properties, with shocking premium renewal notices hitting mailboxes last summer. We often heard that Pinellas County, Florida was “ground zero” for these rate increases and as such, its district legislators went into high gear to attempt a state solution to this federal problem. For most of this session the situation was exacerbated by daily news about Florida having been an NFIP donor state for many years, paying in to the feds much more in premium than we received in claims payments. Sen. Jeff Brandes (R-Hillsborough/Pinellas) took the lead and held press conferences, town hall meetings and legislative events to raise the awareness on ways Florida could take “the matter into its own hands.” Despite recent reforms at the federal level to slow these often overwhelming flood insurance rate increases resulting from BW-12, Florida Realtors and other business groups sought an alternative to the NFIP at the state level and heavily supported Sen. Brandes’ SB 542 that encourages private insurers to enter the Florida market. Early on, the House and Senate disagreed on how much flexibility to give insurance consumers on the amount of coverage required and a sticking point involved whether consumers would be able to choose coverage insuring only the value of one’s mortgage versus mandating replacement cost coverage. In the end, SB 542 specifies four types of flood insurance policies: one that mirrors NFIP coverages; one called “preferred” which requires replacement costs for contents, not the structure; one labeled as “customized,” (to be defined by the Office of Insurance Regulation), and a fourth policy that would wrap around NFIP coverage, i.e., “supplemental” coverage.
Nowhere in the bill does it require the purchasing of replacement cost for structures, but our team is conferring with the OIR and our FEMA/NFIP contacts to clarify the coverage requirements on structures/contents to understand what this new Florida law really means. “Floridians deserve to have choices when it comes to flood insurance,” said bill sponsor Senator Brandes. “Senate Bill 542 opens the private flood insurance market and frees Floridians from Washington uncertainty and irregularity. I am grateful for the support of my fellow Senators and Representatives and look forward to ensuring this innovative legislation becomes law.” To review the version of the bill which reached final passages please go to the following link:
http://flsenate.gov/Session/Bill/2014/0542 and select the version titled, “SB 0542 er dated 5/1/2014 5:48 pm.”
LMA was on the front lines since day one working with realtors, insurance agents, insurers, reinsurers and other stakeholders ensuring that we (and you) were a part of this vital conversation. Many of our readers provided invaluable input throughout session and helped guide those of us fighting to create a state-based workable alternative to purchasing flood insurance from the NFIP. Florida’s consumers and our recovering economy deserved nothing less. We’ll keep you posted and let you know when the Governor takes action on this critical piece of legislation.
Workers’ Compensation Bills…What Made it and What Didn’t
Going into Session this year, there was a myriad workers’ compensation bills under consideration.
Here’s what didn’t make it:
•HB 1351, which would have revised maximum reimbursement allowances for inpatient hospital care. This bill died in committee on 3/25.
•SB 1580, which would have created a workers ‘ compensation cost task force to analyze hospital inpatient and outpatient reimbursements in workers’ compensation cases. This bill died on 4/11 in committee.
•SB 1214, which included issues relating to medical bills, factors determining whether an injury is compensable under contributing causes. This one died on March 4 in committee.
•HB1007, basically the companion to SB1214, didn’t make it past 3/11 committee.
•SB 952, the Senate companion to HB 785 (see below).
Here’s what did make it:
HB 271 – As we reported in last week’s newsletter, the two workers’ compensation bills addressing stop-work orders appeared to be moving toward a successful final bill during the last week of session. As we predicted, SB 444 was laid on the table on Tuesday, 4/29 and “the surviving bill” was CS/CS/HB 271. We are pleased to see this bill move forward to the Governor’s desk for signature and believe that revising the requirements for the release of stop-work orders is good for all concerned. Both the regulatory bodies and the industry will benefit from the improvement in the stop work order process. Some of the positive flexibility (or friendly regulation) in the bill allows for the Department of Financial Services to “issue an order of conditional release from a stop-work order to an employer upon a finding that the employer has complied with the coverage requirements of this chapter, paid a penalty of $1,000 as a down payment, and has agreed to remit periodic payments of the remaining penalty amount pursuant to a payment agreement schedule with the department or pay the remaining penalty amount in full.” This new language in Chapter 440, Florida Statutes, once signed by the Governor, will provide employers an opportunity to keep their businesses open and running while they comply with the requirements of a stop work order. For the full text of HB 271, see the following link: HB 271 and bill summary.
HB 785 – Continuing the trend for “sophisticated” insurance purchasers, this bill contains the language that allows revisions to s. 627.062, F. S., governing the way retrospective rating options (used in large work comp premium scenarios) are utilized when calculating workers’ compensation policy premium. Retrospective rating in workers’ compensation is nothing new; however this bill will change some of the criteria that must be used. Retrospective rating plans allow for negotiations between an insurer and employer on various factors, e.g., negotiations on what maximum and minimum premium factors to use. These plans permit the negotiation of a workers’ compensation premium between an employer and insurer if the employer has: (1) exposure in more than one state; (2) an estimated annual standard workers’ compensation premium in Florida of $175,000 or more; and (3) an estimated annual countrywide standard workers’ compensation premium of $1 million or more. For the full text of the bill, see the following link: HB 785 and bill summary.
Amendment Will Allow OIR to Approve Premium Discounts for Anti-Crash Equipped Vehicles
Friday 5/2/14- On the last day of session Senator Darren Soto (D-Orange/Osceola/Polk) filed an insurance-related amendment to House Bill 7005 dealing with numerous issues at the Department of Highway Safety & Motor Vehicles. Soto’s amendment added new language to section 627.0653 of the Florida Insurance Code addressing insurance discounts for specified motor vehicle equipment. The amendment states that the Office of Insurance Regulation may approve a premium discount to any rates, rating schedules, or rating manuals for the liability, personal injury protection, and collision coverages of a motor vehicle insurance policy filed with the office if the insured vehicle is equipped with autonomous driving technology or electronic vehicle collision avoidance technology that is factory installed or a retrofitted system and that complies with National Highway Traffic Safety Administration standards. The Senate amendment was adopted and the bill (HB 7005) returned to the House in messages where it reached final passage on the House floor later in the day. The bill now heads to the Governor and we’ll let you know whether it’s signed in to law.
State Speed Limits Could Increase Unless Governor Vetoes Bill
Senate Bill 392 co-sponsored by Senators Jeff Brandes (R-Hillsborough/Pinellas) and Jeff Clemens (D-Palm Beach) that could increase the posted speed limit to 75 mph on Department of Transportation (DOT) designated stretches of state roads and highways began this session rather quietly but ended the session awash in safety concerns. The bill reached final legislative passage on Wednesday (4/30/14) of last week but not without a failed attempt by several Representatives on a motion to recall the bill from the Senate after the House approved the measure on 3rd reading by a 58-56 vote. During debate on the House floor Rep. Irving Slosberg (D-Palm Beach) who lost a daughter in an automobile accident, along with several other House members gave impassioned pleas for their fellow representatives to vote against the bill. However, like bill sponsors Brandes and Clemens, Rep. Matt Caldwell (R-Lee) who sponsored the House companion bill (HB 761) relied heavily on DOT data and National Highway Safety Foundation research to demonstrate that the safest speed limits are those set at speeds at which 85 percent of motorists are actually traveling. Further, that speed differential is more to blame for crashes and severe injuries than speed itself. The razor thin margin at which the bill won approval in the House may signal trouble for the measure once it reaches the Governor’s desk. LMA will continuing monitoring and keep you updated regarding the bill’s future.
Post DUI Auto Insurance Underwriting Period to be extended
Wednesday 4/30/14- The House of Representatives brought to final conclusion legislative approval for Senate Bill 490 sponsored by Sen. Rene Garcia (R-Miami-Dade). The measure extends the underwriting period to 90 days for non-cancellable auto coverage required to reinstate driving privileges that are revoked or suspended for failure to maintain required security or for driving under the influence (DUI). During the extended underwriting period, the policy is effective but the insurance company may cancel the policy. The bill also allows the insured to alter the coverage amounts without requiring the policy to be cancelled, so long as the minimum required coverage amounts are maintained. This is a positive piece of legislation allowing insurers the time needed to thoroughly vet troubled motorists’ backgrounds and better protect those using Florida’s roads and highways.
Measures Protecting Gun & Ammunition Owners: Intense Debate
A bill amending Florida’s Insurance Unfair Trade Practices Act making it unlawful for insurers to discriminate against firearm and ammunition owners in the purchase and renewal of personal lines homeowners and automobile policies reached final approval this past Wednesday (4/30/14). CS/CS/SB 424 sponsored by former Senate President Tom Lee was heavily supported throughout session by the National Rifle Association (NRA) and Unified Sportsman of Florida. Many said this bill was one in search of a problem and when LMA dug into the matter, only one insurance company among the many Florida-based property insurers referenced gun ownership on their insurance application. Political pundits, when discussing this bill said, “It’s OBVIOUS this year is an election year”! The bill is one of several measures filed this session dealing with firearms and is on its way to the Governor for his action.
Another NRA-backed bill (SB 296 by Sen. Jeff Brandes (R-Pinellas) and HB 209 by Rep. Heather Fitzenhagen (R-Lee) left others scratching their head because it would have allowed Floridians to “conceal carry” a firearm without a “concealed weapons” permit during a mandatory evacuation order. Securing a permit is more than meeting a bureaucratic burden. The permit entails firearms proficiency training and understandings of Florida law on locations where one can conceal carry a firearm. This bill faced stiff opposition primarily from the Florida Sheriffs Association using a powerful grassroots effort to say to lawmakers that the law allows for carry options within certain parameters, not concealing a firearm and would have created confusion among law enforcement and Floridians about when they would be in compliance with conceal carry laws. These bills died in the final hours of session.
Insurance Consumer Advocate Gets Policyholder Claims Bill of Rights
Wednesday 4/30/14- After a long and tedious battle beginning practically the first day of the 2014 Legislative Session Insurance Consumer Advocate Steve Burgess gained the establishment of a Homeowners Insurance Policyholders’ Claim Bill of Rights. Senate Bill 708 sponsored by Sen. Aaron Bean (R-Nassau/Duval) secured final legislative approval last Wednesday (4/30/14) on the House floor. What was removed from the final bill and had become highly controversial were new restrictions and/or a partial ban on post-claim assignments of benefits and new requirements for agreements between insureds and emergency mitigation service providers such as water extraction firms. In its final form the bill revises several statutes relating to property insurance claims. It also provides the Department of Financial Services (DFS) with the authority to investigate mediators and neutral evaluators in the same manner as it investigates insurance agents and agencies. The measure authorizes DFS and the Office of Insurance Regulation (OIR) to share information with other regulatory bodies while an investigation is underway. The bill grants DFS increased authority to take disciplinary action against mediators and neutral evaluators. The measure also prohibits insurers from denying claims or cancelling an insurance contract based on credit information available in the public record if the insurance policy or contract has been in effect for more than 90 days. For those contracts containing the appraisal clause, the bill allows parties to disqualify an umpire for specified conflicts of interest such as in claims where the umpire is related to one of the parties or has been previously employed by one of the parties. The bill creates a Homeowner Claim Bill of Rights describing most of the rights held by policyholders and requires the insurer to provide a copy to the policyholder within 14 days of a claim. The bill does not create a new civil cause of action against insurers when the bill of rights is disseminated. It is expected that the Governor will sign this bill into law; however, LMA will keep you apprised of developments.
Watch For a FULL Recap
Now that the handkerchief has hit the floor and the sine die (Latin for “without day”) has been called, we are going to take a deep breath and start working on a full and complete recap of all things 2014 Legislative Session. The recap will be published on May 19, 2014, and chocked full of everything we think you want to know. If, during this week, you have a special request for that publication, shoot us an email and we’ll address your request.
Wow, here we are again. Another full year has passed since the end of the 2013 session and we again, gave it our all. We love that you depend on us for those things you just don’t have time to do as you keep your businesses open and running during this important time of the year. We plan to be around a long, long time and hope you’ll continue to support us as we support you.
Sine die for now!….Lisa and the Team
