Bill Watch – Lisa Miller Associates

Recap of Week 5 & Preview of Week 6 of Session

We’re now past the midway point of the Florida Legislature’s 2020 session. Tort reform became very iffy in committee meetings last week. Will this new week bring greater collaboration and compromise? We’ll see. Three insurance bills – Bad Faith, PIP, and an Omnibus bill – are all stalled because of added litigation reform language regarding bad faith. While all three bills are still in play, the process forward is very uncertain.

Here is a master list of the legislative bills we’re following so far in this 60-day session (you can click the link to go directly to the bill). At this point, with just 4 weeks to go in the scheduled session, it’s clear that bills that have not had a first hearing or have been stalled for weeks, have no realistic chance of passing. Therefore, we have reorganized the list by those bills “In Play” and “Not In Play”. Updates within each bill are noted in red font:

Bad Faith – Reforming homeowner AOB abuse last year took care of part of the lawsuit abuse problem. Reforming Florida’s Bad Faith law will take care of the other part, in the view of many in the insurance industry. Senator Jeff Brandes (R-Pinellas) has filed SB 924 that aims to do just that. The barely four-page bill requires that policyholders and claimants in third-party bad faith actions against insurance companies must prove that the company acted with reckless disregard.

The bill also limits an insurance company’s liability to third-party claimants under certain circumstances, if it files an interpleader action within a certain time period. The bill is similar to one the Senator filed last session in response to a bill that would have repealed Florida’s Personal Injury Protection (PIP) no-fault auto insurance law, but didn’t address bad faith. A similar PIP bill has also been filed this session (see below in this Bill Watch).

As we’ve previously noted, House leaders have been waiting on the Senate to make the first “move” on Bad Faith, especially as it became clear that this bill and the PIP auto bill (below) were so interrelated. That move happened last week, when Senator Brandes filed an amendment laying out precise provisions on third-party bad faith against automobile insurers. It’s the same amendment that Senator Lee had filed, apparently under protest, onto his own PIP bill. And essentially the same amendment that Senator Brandes filed onto his own Omnibus bill (see below).

At the Senate Banking and Insurance Committee meeting last Tuesday, Senator Lee made it clear he didn’t support the amendment – on either of Brandes’ two bills or on his own PIP bill – and was later reported as saying the amendment was the product of “people above my pay grade.”

As a result, Senator Brandes had to ask for this Bad Faith bill to be temporarily postponed and later his Omnibus bill as well, given Senator Lee’s opposition. The committee meeting ended before Senator Lee’s PIP bill was considered. Had any of these three bills been voted on and died in committee, so too would the amendment and would be prevented from being used this session.

The Brandes amendment requires:

The auto insurer act in good faith toward the policyholder throughout the claim process
The insurer receive written notice that it has violated that good faith duty with specifics on facts and circumstances. The action may proceed if the insurer doesn’t cure the violation within 45 days
Any bad faith failure to settle allegation must look at the totality of circumstances with the claimant establishing through the greater weight of the evidence that specific conduct by the insurer is the cause or substantial cause of the alleged failure to settle
An insurer’s negligent actions alone are insufficient to establish a bad faith failure to settle, although are relevant in considering totality of circumstances
No duty by the insurer to offer policy limits or the amount of demand within the 45 days period. The absence of an offer may, however, be considered in the totality of circumstances;
Insurer is not liable beyond available policy limits for failure to make any payment in the case of competing claims by two or more third-party claimants from a single occurrence, so long as insurer has maintained its good faith duties to the policyholder.
Competing third-party claimants are entitled to a pro-rated share of the policy limits as determined by the trier of fact.

After the committee meeting ended in essentially a stalemate, Senator Lee was quoted by the News Service of Florida as saying, “If that’s the best we can do here in the Senate, then PIP is going to have to wait, you know, survive another year.”

Senator Brandes, as well, was discouraged. “This is why I’m saying we’re headed towards a special session on insurance,” he told the News Service of Florida. “It’s going to be all-hands-on-deck for Florida because we’re seeing rates rise. We’re seeing coverage is being limited. We’re seeing insurance companies not rewriting business of the people. Less people are putting new roofs on.”

So at best, Bad Faith reform is stalled; at worst, dead for this session.

Contingency Fee Multiplier/1st Party Insurance Lawsuits – SB 914 by Senator Jeff Brandes (R-Pinellas) is designed to do away with enhanced attorney fees that came into being under a 2017 Florida Supreme Court decision. Courts have used the traditional Lodestar method for calculating attorney fees, where the court multiplies a reasonable hourly rate by a reasonable number of hours expended. But the Supreme Court decision noted that insurance claims are especially complex cases and allowed the use of a contingency risk multiplier to double and sometimes triple plaintiff attorney fee awards. The bill awaits scheduling before its final committee (Senate Rules Committee and is not on the agenda as we go to press) before it can head to the full Senate floor.

The House version of the bill, HB 7071 was formally filed on February 3 by the Judiciary Committee and Rep. Mike Beltran (R-Lithia) and Rep. Anthony Sabatini (R-Howey-in-the-Hills). It was amended to mirror the Senate bill. It passed the House Commerce Committee last week on a 16-7 vote and now goes to the full House. There was lively debate in the Judiciary Committee, with both insurance defense and plaintiff lawyers having polar opposite views, both using the same fact – that very few cases are awarded a multiplier. The plaintiff’s asked “if so few, why change”? The insurance defense urged, “with every claim demand, the multiplier ‘hammer’ has insurance companies writing claim checks that in many cases are for more than necessary, costing millions and raising rates, so we need to put in statute the federal attorney fee multiplier standard that it only be used in ‘rare and exceptional’ cases.”

Omnibus Insurance Bill – HB 359 by Rep. David Santiago (R-Deltona) has a variety of issues including an audit of the Cat Fund’s premium formula, requiring proper notice of a lawsuit including requiring the notice be mailed to the insurer’s address on file with DFS’ service of process unit versus a random address a plaintiff lawyer may find on the internet, and a host of other changes to insurance laws. Omnibus bills are aimed to be consensus bills with the aim to provide greater consumer protection including ways to drive down rate increases.

The bill passed the House Insurance and Banking subcommittee in mid-January unanimously, with very little debate, except with respect to the Statute of Limitations language to move all claims filing deadlines to 3 years across the board for “daily” claims in line with catastrophe claims. Rep. Santiago agreed to work with those who expressed concerns on the Statute of Limitations language and most likely we will see changes at the next committee stop, the Commerce Committee, as yet unscheduled.

Senator Jeff Brandes (R-Pinellas) has filed a comparable bill, SB 1334 in the Senate, which leans more toward litigation reform. This bill has faced repeated postponement as part of greater litigation reform negotiations occurring behind the scenes.

It was scheduled again for consideration last week before the Senate Banking and Insurance Committee. Senator Brandes filed an amendment before the meeting with precise provisions on third-party bad faith against automobile insurers. It’s very similar to an amendment he filed onto his Bad Faith bill (see above) and that Senator Lee had filed onto his own Motor Vehicle Insurance (PIP) bill (below). Senator Lee made it clear at the committee meeting that he didn’t support the amendment and so the bill was temporarily postponed, yet again. (See the above Bad Faith bill section for further details.)

Litigation Financing Consumer Protection – The House Civil Justice Committee explored creating a regulatory framework for litigation financiers who provide capital to firms who take cases on contingency, similar to a “factoring” company that buys receivables and pays an upfront, discounted fee for the right to assume the receivable at full value. A workshop led to the release of HB 7041 by Rep. Tom Leek (R-Ormond Beach) which awaits scheduling before the House Commerce Committee, whose next scheduled meeting is this Thursday (20^th) but no agenda was available at press time. A similar companion bill, SB 1828 by Senate Banking and Insurance Chairman Doug Broxson, was postponed last week and will have its first hearing before that committee this Wednesday (19^th).

HB 7041 creates the Litigation Financing Consumer Protection Act (“Act”). Specifically, the bill:

Requires a litigation financier to register with the Department of State and file a bond, provides registration and bond requirements, and allows revocation of a registration for non-compliance.
Requires all litigation financing contracts be in writing, completely filled in, and contain mandatory terms and disclosures, including a rescission right.
Prohibits a litigation financier from engaging in specified conduct, including making settlement decisions.
Sets the maximum interest rate at 30 percent, requires simple interest, and specifies how long interest can accrue.
Caps fees and charges at $500 for any civil action or claim, regardless of the number of contracts a litigation financier enters into with the consumer with respect to that civil action or claim.
Specifies litigation financier lien priority.
Requires disclosure of litigation financing contracts in a civil action and protects communications between a consumer’s attorney and a litigation financier about a litigation financing contract.
Provides that a violation of the Act is a violation of the Florida Deceptive and Unfair Trade Practices Act.

Damages – SB 1668 / HB 9 requires that in personal injury and wrongful death actions to recover medical damages, the jury must only hear evidence of medical expenses based on the usual and customary amounts actually received by medical providers. This ensures the jury does not incorrectly rely on the amount billed by the medical provider to calculate damages. The American Tort Reform Foundation’s annual report places Florida on its “Watch List,” indicating that it considers Florida to have a history of “abusive litigation or troubling developments.” The report’s summary acknowledges, however, that “Florida took great strides toward improving its legal climate in 2019.” These bills appear to continue Florida’s effort in litigation reform. SB 1668, sponsored by Senator David Simmons (R-Altamonte Springs) passed the Senate Health Policy Committee on a 5-4 party line vote last week, its second of four stops.

An amendment was added to the bill that would require jurors in liability cases and awards against physicians to hear/see data from Fair Health (https://www.fairhealthconsumer.org/) which allows for the public and others to enter a CPT code (which is the standard for all medical services) with the first 3 digits of a zip code to learn about the true cost of a procedure. The amendment is worded in general terms to describe this database with committee testimony describing how the database will work. At one point, Senate Health Policy Chair Gayle Harrell asked “So the jury considers this evidence let’s say from the Fair Health database. Do they consider that along with other evidence and then the jury makes the final decision, right?” The answer was yes. Opponents of the use of this database, including a physician that treats indigent personal injury victims, said that using this database does not take into account the months and years to treat these patients and the time and administrative burden that dealing with these cases place on physician staff.

This bill is aimed at changing the scope of “Letters of Protection” (LOP) that are generated from trial lawyers. They’re essentially a promise to pay a physician for services rendered.

William Large, of the Florida Justice Reform Institute, testified that LOP’s are problematic. He said they inflate past medical expenses. A typical tort case may take 2 or 3 years to come to trial. In that time, a jury for example may hear that the past medical expense was $100,000. The defendant will estimate future medical expense, for example, $20,000 including medical inflation. The plaintiff may say future medical expense will be $100,000 and Large argued the jury is likely to believe the $100,000 number because they have seen an inflated past medical charge. Past and future, the bigger they are, the more the entire value of the case will be inflated, he argued.

HB 9 is sponsored by the House Civil Justice Subcommittee and Reps. Leek, Sabatini, and Stone. It still awaits a hearing before the House Commerce Committee, its second of three committee stops. The committee’s next scheduled meeting is this Thursday (20^th) but no agenda was available at press time.

Legal Advertising – HB 7083 ups the definitions of deceptive and unfair practices, which are second degree felonies. Among other things, the bill requires that when recovery money is mentioned in an advertisement, it must clearly disclose the amount the client received after paying legal fees and costs. It also seeks to clear up confusion some ads create on whether a product has truly been recalled by the government. And not ironically, the bill includes the right to recover court costs and attorney fees from violations of it! We’ll be watching and will likely add it to the list below.

On February 4, the House Civil Justice subcommittee, which is sponsoring the bill with Rep. Tom Leek (R-Ormond Beach), heard public testimony on needed consumer protections. Lively debate discussed deceptive legal ads relating to what an actual consumer is awarded versus what the law firms receive from litigation. The speakers also addressed drug advertisements and whether consumers benefit from warnings of a drug’s negative side effects. Those that supported free speech and legal advertisements, opposing this bill, referenced first amendment issues relating to the idea of placing governmental limitations on legal advertising in the state. The bill ultimately passed on a 10-4 vote and awaits scheduling before the House Human Services Committee, one of two final stops.

A comparable bill in the Senate, SB 1288 by Senator Tom Wright (R-Port Orange), is awaiting its first hearing before the Criminal Justice Committee, which meets tomorrow but has not put the bill on the agenda at press time.

Public Records/Records of Insurers/Department of Financial Services – Consumers’ personal financial and health information, certain underwriting files, insurer personnel and payroll records, and consumer claim files that are made or received by the Department of Financial Services would be exempt from public records law under SB 1188, by Senator Ben Albritton (R-Bartow). The bill is a necessary consumer protection and would keep consumers’ confidential information away from over-zealous attorneys seeking prospective clients.

The bill would also exempt from public records law certain reports and documents held by the department relating to insurer own-risk and solvency assessments, corporate governance annual disclosures, and certain information received from the National Association of Insurance Commissioners or governments. The bill is scheduled to be heard this Wednesday (19^th) before the Rules Committee, its final stop. An identical House bill, HB 1409 by Rep. Michael Grant (R-Port Charlotte) passed the House Commerce Committee last week and now heads to the House floor.

Property Insurance (surplus lines) – SB 1760 by Senator George Gainer (R-Panama City) addresses Surplus Lines regulation. This bill is directed at ensuring consumers have access to Florida based courts and dispute resolution processes based in Florida versus what many surplus lines policies include which requires disputes to be heard in states or countries outside Florida. But the bill affects the admitted market, raising concerns about overreaching regulation. An identical House bill, HB 1357 by Rep. Jay Trumbull (R-Panama City) passed unanimously in early February without debate in the House Insurance and Banking Subcommittee. It has two more committee stops. The Senate bill still awaits its first hearing.

Consumer Protection – HB 1137 / SB 1492 prohibits certain charges for removal of security freeze; prohibits unlicensed activity by adjusting firms & bail bond agents; provides administrative & criminal penalties; revises actions against certain license, appointment, & application of insurance representatives; revises status, notice, & payment requirements for claims; revises classes of insurance subject to disclosure requirement before eligible for export under Surplus Lines Law; prohibits certain writing of industrial life insurance policies; revises Homeowner Claims Bill of Rights; removes certain deductible obligation of the Florida Insurance Guaranty Association; and revises unclaimed property recovery agreements & purchase agreements. Specifics below and further discussion and work is necessary on these bills to prevent unintended consequences.

HB 1137 is sponsored by Rep. Chuck Clemons (R-Newberry) and unanimously passed the House Commerce Committee last week and now heads to the full House.

SB 1492, by Senator Tom Wright (R-Port Orange), had its second hearing in early February before the Banking and Insurance Committee. The committee debated for almost an hour the provisions of this bill which was created and pushed by CFO Jimmy Patronis. Senator Wright presented a strikeall amendment which basically is a new version of the bill, to better align it with the House version. The strikeall has several differences from the original version:

It clarifies that an insurer is not required to file documents with DFS that it considers subject to attorney privilege.
It revises the policyholder’s right of recision or cancellation of their contract with a public adjuster to 21 days after initial contact execution – the original bill allowed 30 days.
It allows insurers to email, rather than mail, an outline of coverage prior to hurricane season, as required in the original bill.
Rather than include all surplus lines policies to be subject to 70131 F.S. which says claims must be adjusted in 90 days with the undisputed amount paid in that time frame, the strikeall narrows that to residential property under $700,000.

For a complete review of the new bill version, please see the amendment.

Senator Tom Lee expressed concern with the strikeall amendment on many fronts, but the greatest was the fact that commercial policies in surplus lines would not receive the same benefits as residential policies. The bill requires that claims litigation or other claims dispute processes for residential policies be held in Florida versus out of state or out of the country, which appears to be common in surplus lines policies. Senator Lee asked “shouldn’t Florida’s small businesses have the opportunity, for example, to litigate claims disputes in Florida?” Another provision exempts surplus lines policies for residential propertyies

The bill with the strikeall amendment passed and Senator Lee afterward made a procedural move that the amendment “travel” with the original version of the bill. His commentary seemed to indicate he liked the original version of the bill, in some cases, better than the strikeall amendment. By having the strikeall “travel” versus substituting for the original version, he would have the opportunity to continue the debate at the bill’s next stop – the Rules Committee – highlighting the differences between the two versions. The committee agreed to the travel provision and it now awaits scheduling before the Rules Committee. The bill is not on the Rules Committee agenda for this Wednesday (19^th) as of press time.

Insurance Claims Data – SB 292 by Senator Doug Broxson (R-Pensacola), who chairs the Banking and Insurance Committee, addresses disclosure of, and defines a “loss run statement” as a report relating to risks maintained by an insurer which contains the history of claims occurring during a policy term. The bill requires surplus and admitted carriers to provide a statement to a policyholder at no charge upon request. The bill, which previously passed all its committees, was scheduled for a vote on the Senate floor last week but was temporarily postponed. A similar bill in the House, HB 269 by Rep. Daniel Perez (R-Miami) passed its committees and is still awaiting scheduling before the full House. “The overall effect of the bill is to establish a statutory framework for an insurance practice that routinely occurs,” states the bill analysis. As such, we find it odd that a routine practice needs to put into law.

Insurance Guaranty Associations – Essentially a “Condo Parity Bill”, HB 529 by Rep. Jennifer Webb (D-St. Petersburg) would provide an increase from $100,000 to $200,000 per unit as the payout to condominium and homeowners associations. The bill unanimously passed the Ways and Means Committee last week, and awaits scheduling before the House Commerce Committee, its last stop. An identical bill, SB 898 by Senator Joe Gruters (R-Sarasota), is schedule to be heard today (Monday) before the Senate Innovation, Industry, and Technology Committee.

The Guaranty Association protects a traditional single-family dwelling for an up to $300,000 loss for the dwelling should the insurance company go bankrupt. The associations in favor of this year’s legislation argue that a total loss where a condo building is leveled would cost substantially more than $100,000 “per door” to rebuild and that the payout hasn’t been increased in over 30 years. This has been a point of conversation for many years and we look forward to the debate.

Another bill making its way through the process is HB 329 (also titled “Insurance Guaranty Associations) by Rep. David Smith (R-Winter Springs). This bill tweaks the major FIGA reform of several years ago, changing assessment calculations for both homeowners and workers compensation guaranty funds.

The bill has been on a fast-track, passing all of its committees, and is still awaiting scheduling before the full House. Rep. Smith said the bill had the support of CFO Patronis and Insurance Commissioner Altmaier. He said the bill clarifies the method that FIGA assessments are collected and remitted. Remittance would be quarterly, instead of the monthly remittance passed in the 2016 changes to the law. The bill also allows out of state adjusters operating under a licensed FIGA adjuster to adjust claims. An identical bill in the Senate, SB 540 has passed all of its committees and awaits a vote by the full Senate.

Disposition of Insurance Proceeds – When the work is completed, contractors like to get paid as soon as possible and HB 999 by Rep. Chip LaMarca (R-Lighthouse Point) is designed to do just that. The bill establishes requirements for disposition of specified insurance proceeds held by mortgagees, assignees, financial institutions, and subsidiaries, as well as notification to policyholders. Contractors need banks and mortgage companies to release those funds more quickly so they, in turn, can pay subcontractors. Banks are very careful though in protecting their financial interest in a property and like to send their own inspectors out to the site to confirm the job was done. The bill also codifies existing Fannie Mae and Freddie Mac rules requiring these funds be in interest bearing accounts. The bill is awaiting its first hearing. A similar bill, SB 1408 by Senator Bill Montford (D-Tallahassee) was filed in early January.

There are two comparable bills, HB 895 and SB 1606 also filed in early January. HB 895 provides another option for force placed policies cat fund limit to allow for coverage for the amount of the mortgage, which is advantageous in conserving the cat fund’s capacity. HB 895 is scheduled before the House Appropriations Committee tomorrow (Tuesday) and will have one more stop after that in the Commerce Committee. SB 1606 is scheduled today (Monday) before the Senate Infrastructure and Security Committee. None of the other bills have been scheduled to be heard yet.

Sanitary Sewer Levels – SB 150 by Senator Jeff Brandes (R-Pinellas) would require a seller of real property to disclose any known defects in the property’s sanitary sewer lateral. The bill has unanimously passed two committees and awaits a hearing in the Rules Committee, its last stop before heading to the full Senate for consideration. As of yet, it has no House companion.

Motor Vehicle Insurance (PIP) – This is a perennial effort to do away with Personal Injury Protection (PIP) coverage under Florida’s No-Fault insurance law and replace it with bodily injury (BI) liability coverage. Similar bills failed last session. Senator Tom Lee (R-Brandon) is back with SB 378 which on January 21 passed out of the Senate Infrastructure and Security Committee, which he chairs. It passed with no changes, including no revisions to Bad Faith laws which concern many. The prevailing opinion is that should PIP go away and be replaced with mandatory Bodily Injury Liability coverage, every auto accident will have a resulting lawsuit which would increase bad faith suits, often with little justification. There is a great staff analysis of this bill that is worth the read should our audience want to learn more. You can read it here.

Repeal of No-Fault has stalled over disagreement with adding a Bad Faith provision to the bill. The Senate Banking and Insurance Committee meeting last week ended before this bill was considered. The Senator objected to an amendment filed on his own bill, apparently under protest, laying out precise provisions on third-party bad faith against automobile insurers. It’s the same amendment that Senator Brandes filed on his own Bad Faith bill (see above) and similar to one he filed on his Omnibus bill (see above).

As a result, this PIP bill essentially, along with Senator Brandes’ two bills were all temporarily postponed for lack of consensus. Had any of these three bills been voted on and died in committee, so too would the amendment and would be prevented from being used this session.

The Brandes amendment requires:

The auto insurer act in good faith toward the policyholder throughout the claim process
The insurer receive written notice that it has violated that good faith duty with specifics on facts and circumstances. The action may proceed if the insurer doesn’t cure the violation within 45 days
Any bad faith failure to settle allegation must look at the totality of circumstances with the claimant establishing through the greater weight of the evidence that specific conduct by the insurer is the cause or substantial cause of the alleged failure to settle
An insurer’s negligent actions alone are insufficient to establish a bad faith failure to settle, although are relevant in considering totality of circumstances
No duty by the insurer to offer policy limits or the amount of demand within the 45 days period. The absence of an offer may, however, be considered in the totality of circumstances;
Insurer is not liable beyond available policy limits for failure to make any payment in the case of competing claims by two or more third-party claimants from a single occurrence, so long as insurer has maintained its good faith duties to the policyholder.
Competing third-party claimants are entitled to a pro-rated share of the policy limits as determined by the trier of fact.

The story was different last week in the House. A similar bill, HB 771 by Rep. Erin Grall (R-Vero Beach) passed the House Government Operations and Technology Appropriations Subcommittee on a 13-4 vote. The bill does not contain a Bad Faith provision.

The bill would replace PIP with mandatory Bodily Injury coverage. It would also require insurance companies offer MedPay (medical payments coverage) that would help motorists pay medical bills from accident injuries. It got its initial hearing in early February before the Insurance and Banking Subcommittee. There, Rep. Grall called the current PIP system “broken” and an added expense on consumers’ auto insurance bills. She said eliminating PIP would result in 8%-9% savings. Rep. Byron Donalds (R-Naples) noted a problem with the current auto insurance system in Florida, where some motorists just carry PIP as bare bones coverage, but that doesn’t pay for actual accident damages.

Insurance lobbyists at that hearing had several objections. One said premiums would actually go up by several hundred dollars in switching from PIP to Bodily Injury coverage. Others objected to the lack of Bad Faith changes in the current bill, arguing there will surely be an increase in lawsuits without those changes.

Rep. Grall has said that any bad faith changes would make the proposal “more complicated than it needs to be.” She was quoted in news reports after last week’s hearing as saying she remains open to adding bad faith language but questioned if there is a “landing spot” for such a provision. The bill awaits a final hearing before the House Commerce Committee, which meets Thursday but has now agenda as of press time.

A comparable HB 731 by Rep. Daniel Perez (R-Miami) goes before the House Appropriations Committee tomorrow (Tuesday), its second of three committee stops.

(See LMA Backgrounder: Personal Injury Protection for more details on the history of PIP reform and the failed 2018 bills, data, and past committee and stakeholder discussions.)

Motor Vehicle Rentals – Just as you can rent out your home when you go away on vacation, likewise your car, with online services such as Turo (https://turo.com/). HB 377 by Rep. Chris Latvala (R-Clearwater) would insert government intervention to regulate another sharing economy company advance.

In a nutshell, if a car owner parks their car at an airport for any length of time, a Turo user could “rent” that car and drive it until the owner returns from their trip. The bill provides financial responsibility & insurance requirements and a host of other regulations on this emerging idea/market. Of course, the traditional rental car companies are in favor of the legislation and Turo opposes, calling the regulations unnecessary.

The bill has been re-referenced and is awaiting a hearing before the Commerce Committee, so it appears it may be on the fast track. A report last week by the state’s Revenue Estimating Committee examined the bill’s financial impact. It adopted a positive indeterminate impact for new cash and recurring revenue, noting “It is unclear the extent to which the provisions of this bill are enforceable given the out-of-state nature of the current marketplace providers.”

Its Senate companion, SB 478 by Rep. Keith Perry (R-Gainesville) was supposed to be heard last week by the Senate Banking and Insurance Committee but was temporarily postponed and will be heard before the Committee this Wednesday (19^th) instead. It has one more committee stop afterward.

A comparable “peer-to-peer car sharing” bill in the House, HB 723, by Rep. Jason Fischer (R-Duval) passed the State Affairs Committee last week, its second of three stops, and awaits scheduling before the House Commerce Committee which meets Thursday but has no agenda at press time. Discussion has centered around how the peer-to-peer car sharing companies have partnered with used car lots so that those cars are part of peer-to-peer platforms. The car rental corporations are calling foul since there is no oversight, taxes or other government intervention that the car rental corporations must comply with. It does not appear however that the rental car corporations will be successful in moving the bills they support that put in place regulations over these peer-to-peer car sharing platforms.

The National Council of Insurance Legislators (NCOIL) in December adopted the Peer-to-Peer Car Sharing Program Model Act for states to consider adopting as law.

Motorist Fines and Fees – Noting that there are almost 2 million people in the state of Florida driving daily on suspended licenses “because they don’t have the ability to pay the fines and fees in one lump sum,” Senator Tom Wright, (R-Volusia) is sponsoring SB 1328. The bill would require a uniform payment system in all 67 counties and allow those motorists to pay fines and fees by making partial payments or by through community service. The bill will be heard tomorrow (Tuesday) by the Appropriations Subcommittee on Criminal and Civil Justice, its second stop.

A comparable House bill, HB 903 by Rep. Byron Donalds (R-Naples) and Rep. Rene Plasencia (R-Orlando) still awaits a hearing before the House Appropriations Committee and is not scheduled for this week’s meeting. Another comparable House bill, HB 6083 by Rep. Anthony Rodriguez (R-Miami) and Rep. Blaise Ingoglia (R-Spring Hill) awaits its second committee stop.

Credit for Reinsurance – The Florida Legislature has begun the process to remove or reduce existing collateral restrictions on European Union and United Kingdom based reinsurers, to comply with the 2017 U.S. Covered Agreements.

HB 1211 / SB 1376 would amend section 624.610 Florida Statutes, to comply with the changes required by the Covered Agreements and provide the Financial Services Commission sufficient time to amend Rule 69O-144, Credit for Reinsurance.

The House bill is sponsored by Rep. Shevrin Jones (D-West Park), the House Deputy Democratic Leader, and the similar Senate bill is sponsored by Senator Doug Broxson (R-Pensacola). The Senate bill awaits a hearing before the Rules Committee, its third stop. The House bill awaits a final hearing before the Commerce Committee, which had not published this week’s agenda at press time.

Genetic Information for Insurance Purposes – Did anyone get a “23andMe” or “Acestory.com” gift certificate for Christmas? When we listened to testimony last year about the issue of life insurers using genetic information in underwriting, many of us in The Capitol pondered the future of life insurance. We recalled that in 2008, a federal law called the Genetic Information Nondiscrimination Act (GINA) made it illegal for health insurance providers in the United States to use genetic information in decisions about a person’s health insurance eligibility or coverage, with certain exceptions. The movement is now in the life insurance arena. Legislators’ attempts last year to stop life insurers from using genetic information failed.

This year’s effort, HB 1189 / SB 1564, prohibits life insurers & long-term care insurers from canceling, limiting, or denying coverage, or establishing differentials in premium rates based on genetic information. It also prohibits such insurers from taking certain actions relating to genetic information for any insurance purpose. Florida would become the first state to enact such a law.

HB 1189 passed the full House in late January and SB 1564 unanimously passed the Senate Judiciary Committee last week and will be heard by the Rules Committee this Wednesday (19^th), its last committee stop before heading to the full Senate. There has been discussion and one objection by Senator Jeff Brandes in a past meeting that consumers should have the choice to allow insurers to use their DNA, especially consumers who have the good fortune of a healthy family history.

The House bill is co-sponsored by incoming House Speaker Rep. Chris Sprowls (R-Clearwater) and Rep. Jayer Williamson (R-Pace). Senator Kelli Stargel (R-Lakeland) is sponsoring the Senate’s identical version.

Tobacco and Nicotine Products – SB 810 / HB 151 would raise the age to 21 for all tobacco products – smoking, chewing, and electronic/vaping. The bill reflects changes on the federal level and the penalty for states that don’t comply is withholding of FEMA disaster and non-disaster grants. Congress last year passed and the President signed legislation raising the national age for tobacco products to 21, which takes effect this summer.

The Senate bill sponsor, Senator David Simmons (R-Altamonte Springs) told the Senate Health Policy in January that evidence points to the harm created by tobacco and that “we know that if we don’t solve this problem, we are going to be in a health crisis and a financial crisis in the future.”

The bill would also ban cigarette vending machines from anywhere people under the age of 21 could access. The Senate bill is awaiting scheduling before the Senate Appropriations Committee, its last stop. The House bill, sponsored by Reps. Jackie Toledo (R-Tampa) and Nicholas Duran (D-Miami), is still awaiting its first hearing.

Assignment of Benefits (Windshield AOB) – Unfortunately, the House version of the AOB windshield reform bill (HB 169) was withdrawn from further consideration. And as you read in our previous editions, the Senate Banking and Insurance Committee showed no appetite to pass its proposed bill (SB 312), although the Senate sponsor vowed to keep an eye out on ways to get something passed.

While we never quit, it remains apparent that any reform of this insane practice of the flood of lawsuits against auto insurance companies will not occur this session. We will work with our colleagues who are working every day to bring some sense to this litigation insanity and will keep you posted. On my desk is a case where a lawsuit was filed for a $4 difference in what was paid by the insurer and what the glass shop charged. You decide if that makes sense or not!

You will recall that these bills are part of the ongoing effort to reform growing AOB abuse in automobile windshield repair and replacements. It was initially part of the 2019 session’s broader AOB reform, but was dropped during negotiations on final passage of HB 7065 which became law last year.

The House and Senate versions were drafted to put consumers back in charge…not windshield replacement companies and their favorite trial lawyers who are gaming the system, laughing all the way to the bank at our expense.

The Florida Justice Reform Institute released its latest Auto Glass AOB Data Update in November. Using Department of Financial Services’ data, it shows growth from about 400 auto glass AOB lawsuits in 2006 to 24,000 in 2017, with a leveling off last year to about 17,000 suits and holding steady for 2019. Orange (Orlando) and Hillsborough (Tampa) Counties are the most popular spots for such litigation, with 15 firms accounting for 90% of the litigation. One firm (Malik Law) is responsible for filing nearly 30% of all lawsuits.

Contingency Fee Limitations Local Government – There’s an effort underway as well to make sure that local governments aren’t contributing to exorbitant attorney fees or adding unnecessarily to state court caseloads, especially cases of statewide interest better pursued through the Attorney General’s Office. HB 7043 / SB 1574 would prohibit local or regional governments from a contingency fee arrangement in excess of $20 million with a private firm. The bills originate, in part, out of concern of the myriad local city and county lawsuits against Big Pharma for our statewide opioid addiction crisis. The House bill was supposed to have its first of only two committee hearings on February 4 before the House Oversight, Transparency and Public Management Subcommittee but was temporarily postponed and has not been rescheduled. This, too may be part of the greater negotiations on litigation reform. The Senate bill still awaits its first of three committee hearings.

Construction Defects – SB 1488 / HB 295 specify that certain disclosures and documents must be provided before a claimant may file an action; revising the timeframes within which certain persons are required to serve a written response to a notice of claim; providing requirements for the repair of alleged construction defects; prohibiting certain persons from requiring advance payments for certain repairs; and requiring parties to a construction defect claim to participate in certain mandatory nonbinding arbitration within a specified time.

The Senate bill is sponsored by Senator Joe Gruters (R-Sarasota) and is awaiting its first hearing. A similar House version by Rep. David Santiago (R-Deltona) had its committees of reference changed in early February and awaits a hearing in the House Commerce Committee, its second stop. There’s also a comparable Senate version, SB 948, by Senator Dennis Baxley (R-Lady Lake) that still awaits its first hearing.

Residential Property Disclosures (Flood) – Sellers of residential property would have to specifically disclose any past flooding, present flood insurance coverage, and a host of other prescriptive conditions under SB 1842 by Senator Bobby Powell (D-West Palm Beach). The disclosure summary, whether separate or included in the contract for sale, would also require disclosure of any past insurance claim filings for flood damage, past FEMA or other federal assistance, and any flooding due to reservoir release. The disclosure also requires notice that the buyer should not rely on the seller’s current property taxes, as a change in ownership triggers reassessments. There is still no hearing scheduled nor House companion bill filed yet.

The Miami Herald and others have reported that although current Florida law requires sellers and their real estate agents disclose known defects or anything that “materially affects” a property’s value, there are cases where someone bought not knowing they were in a flood plain or had suffered previous flooding. The idea has the support of the Federal Association for Insurance Reform (FAIR) and others in recent editorials.

While Realtors® are being targeted, can’t we get insurance agents to step-up? The piece that’s missing is the fact that insurance agents are not required to talk about flood insurance with their customers. Regardless of a home’s past experience or future flood propensity, insurance agents have a responsibility to TALK about flood insurance with customers at the time of initial property insurance policy issuance and on every renewal. A handful of agents do, but for those that don’t? The results are disastrous yet Florida’s law is silent when it comes to mandatory insurance agent documentation of a conversation with its customers. We hope the Federal Association for Insurance Reform can get behind this as well.

Florida Building Code – SB 710 is in reaction to the destructive damage created by last year’s Hurricane Michael and other recent hurricanes. Sponsored by Senator Ben Albritton (R-Bartow), the bill mandates the Florida Building Code require that the entire envelope of certain buildings being constructed or rebuilt be impact resistant and constructed with high wind-resistant construction materials; requiring that all parts or systems of a building or structure envelope meet impact test criteria or be protected with an external protection device that meets such criteria; and provides certain exceptions. The bill is still awaiting its first hearing and as yet, has no House companion.

(See Is Florida’s Building Code Protecting All of Us? and Why the Panhandle Wasn’t Hurricane Strong for Michael episodes for more details, from The Florida Insurance Roundup podcast.)

Pharmacy Benefit Managers (PBMs) – While the federal government pursues tougher restrictions on PBMs in an ongoing effort to lower the cost of prescription drugs for consumers, there’s an effort underway in the Florida legislature to do the same. Rep. Jackie Toledo (R-Tampa) has filed HB 961 that would regulate PBMs, targeting “predatory practices”. It’s inspired in part by a University of Southern California study that found that 23% of pharmacy prescriptions involved a patient copayment that exceeded the average reimbursement paid by the insurer by more than $2.00. The average overpayment was $7.69. Small pharmacies claim the system also creates an unfair competitive disadvantage with larger pharmacy chains.

There are mixed feelings about PBMs with some insurance companies seeking to manage their prescription drug costs owning a PBM vs. other insurers who believe PBMs are part of the drug pricing problem. This is another marketplace issue, where PBMs utilize sometimes monopolistic methods in their pricing and lawmakers and regulators have now decided they want more oversight.

The bill awaits its first hearing, as does a similar bill, SB 1444 by Senator Gayle Harrell (R-Stuart) and a comparable bill, SB 1682 by Senator Javier Rodriguez (D-Miami).

Meanwhile, Senator Tom Wright (R-Port Orange) is sponsoring SB 1338, which would increase regulation of PBMs but appears to be more oriented toward data collection by insurance regulators for building future recommendations. It passed unanimously in the Senate Banking and Insurance Committee in January and awaits scheduling before its second committee.

There does not appear to be any appetite to provide regulatory oversight of PBM’s. Independent pharmacists say that PBM’s are price fixing and raising prices and others say they function as the economy of scale/price aggregation solution to high drug prices. If any of our readers want to learn more about this fascinating debate between one of the last bastions of “the middle man” and main street America independent pharmacies, let us know!

Criminal Justice Reform – Led by Senator Jeff Brandes as chair of the Senate Criminal Justice Appropriations Committee, his bill SB 1308 authorizes resentencing and release of certain persons who are eligible for sentence review under specific conditions, including subsequent sentencing guidelines. The bill unanimously passed the Senate Criminal Justice Committee in early February and has two more committee stops.

Senator Brandes’ guiding principal is that offenders should come out (of prison/incarceration) better than they went in. His passionate advocacy includes a more formal education system in correctional facilities, ready to work programs, updating the cleanliness and conditions of facilities and sentencing reform. Reform will come down to a matter of resources. The Tallahassee Democrat newspaper ran this op-ed: My son was sentenced to life in prison at age 19 for a crime in which no one was physically harmed that references his bill, which is awaiting its first hearing. A comparable bill, HB 1131 by Rep. Michael Gottlieb (D-Plantation) and Rep. Fentrice Driskell (D-Tampa) awaits its first committee hearing.

In the meantime, the Senate is fast-tracking actual changes in mandatory minimum sentence laws. SB 346 by Senator Rob Bradley (R-Fleming Island) would give judges discretion in sentencing certain drug offenses if the defendant meets certain criteria. Not surprisingly, the bill has passed unanimously thru three committees and is awaiting a full Senate vote. Its companion, HB 339 by Rep. Alex Andrade (R-Pensacola) and Rep. Mike Grieco (D-Miami Beach) has bipartisan support among a dozen or so bill co-sponsors but is still awaiting its first committee meeting.

The Senate under Jeff Brandes leadership is “leaning in” with the movement of SB 346 and its recognition that times change and locking ’em up and throwing away the keys may not necessarily be the best way to rehabilitate an offender. The Florida Sheriff’s Association doesn’t agree in many instances holding a press conference in January and releasing Truth in Sentencing report stating many of the criminal justice reforms Senator Brandes and others are calling for are based on “myths.” Our firm watches this debate closely for a lot of reasons, not the least of which is we need talent in many professions and perhaps there are individuals who can contribute to many of our employment openings.

Cruelty to Dogs – People who leave their dogs outside and unattended on a restraint during a natural disaster would face a misdemeanor charge of animal cruelty under SB 522 by Senator Joe Gruters (R-Sarasota). The punishment would carry a potential $5,000 fine and be triggered any time there’s a hurricane, tropical storm, or tornado warning, or in the case of mandatory or voluntary evacuation orders. It passed the Criminal Justice committee unanimously in December and still awaits a hearing in the Judiciary committee. It has no House companion.

Meanwhile SB 1044 by Senator Jason Pizzo (D-Miami), referenced as “Allie’s Law” would require veterinarians to report suspected animal cruelty in certain circumstances and provide immunity from criminal and civil liability for certain persons and entities. It unanimously passed the Senate Judiciary Committee in early February and has one more stop before the Rules Committee before going to the full Senate. A similar House bill, HB 621 by Reps. Dan Daley (D-Coral Springs) and Scott Plakon (R-Longwood) is awaiting its first hearing.

LMA Newsletter of 2-17-20