Recap of Week 6 & Preview of Week 7 of Session
Just three weeks of the Florida legislative session remain and most of the tort reform bills are either stalled or dead. The appetite for reform that legislative leaders said they had at the beginning of session has waned. It’s apparently been overshadowed by E-Verify on immigration labor, parental consent on abortion, and bills allowing advanced practice registered nurses to set-up their own practices independent from physicians. Lawmakers are also busy working out a final tax package.
Here is a master list of the legislative bills we’re following in this 60-day session (you can click the link to go directly to the bill). At this point, with just 3 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, our list is organized by those bills “In Play” and “Not In Play”. “Updated” bills are so noted. Updates within each bill are noted in red font:
Assignment of Benefits (Windshield AOB) NOT IN PLAY
Bad Faith Updated
Contingency Fee Multiplier/1st Party Insurance Lawsuits Updated
Contingency Fee Limitations Local Government NOT IN PLAY
Omnibus Insurance Bill Updated
Litigation Financing Consumer Protection Updated
Damages Updated
Legal Advertising NOT IN PLAY
Public Records/Records of Insurers/Department of Financial Services Updated
Property Insurance (surplus lines) NOT IN PLAY
Consumer Protection Updated
Insurance Claims Data Updated
Insurance Guaranty Associations Updated
Construction Defects NOT IN PLAY
Disposition of Insurance Proceeds Updated
Residential Property Disclosures (Flood) NOT IN PLAY
Sanitary Sewer Levels Updated
Florida Building Code NOT IN PLAY
Motor Vehicle Insurance (PIP) Updated
Motor Vehicle Rentals Updated
Motorist Fines and Fees Updated
Credit for Reinsurance Updated
Genetic Information for Insurance Purposes Updated
Pharmacy Benefit Managers (PBMs) Updated
Criminal Justice Reform NOT IN PLAY
Tobacco and Nicotine Products Updated
Cruelty to Dogs NOT IN PLAY
Bad Faith – The 2020 session may very well be a repeat of the 2019 session as it concerns bad faith reform and repeal of Florida’s No-Fault Auto Insurance law and with it, Personal Injury Protection (PIP) insurance. Senator Jeff Brandes (R-Pinellas) once again has drawn the line in the sand, saying any PIP repeal needs to address bad faith, otherwise, litigation will run rampant. As in the 2019 session stalemate, both bad faith and PIP repeal appear dead this session.
Senator Brandes’ SB 924 never received the support necessary to be heard by the Senate Banking and Insurance Committee, which we’re told is no longer meeting this session. Its amendment addressing bad faith in auto claims also spelled the demise of the Senate’s PIP repeal bill this session before the same committee. Details follow. While there is no House companion to the Senator’s bill, there is a House companion to the Senate PIP repeal bill – and it doesn’t have a bad faith provision attached as of this writing. (see the “Motor Vehicle Insurance –PIP” bill section of this report.)
Senator Brandes’ 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.
House leaders this session had been waiting on the Senate to make the first “move” on Bad Faith, especially as it pertained to the PIP auto repeal bill. That move happened on February 11, when Senator Brandes filed an amendment to his bill, 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 that same day. And essentially the same amendment that Senator Brandes filed onto his own Omnibus bill (see the “Omnibus” section of this report).
At the February 11 Senate Banking and Insurance Committee meeting, 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, all of the bills were either temporarily postponed or otherwise not considered. (Return to Top of Page)
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 the Senate Rules Committee, its last, but is not on the agenda for this Wednesday’s meeting.
The House version of the bill, HB 7071 was filed 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 on a `16-7 vote on February 13 and awaits a vote by the full House. There was lively debate in the Senate 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.” (Return to Top of Page)
Omnibus Insurance Bill – HB 359 by Rep. David Santiago (R-Deltona) covers several topics. A majority of the bill has a new regulatory framework for travel insurance and some other minor tweaks to the insurance code, but nothing in this bill will stem the litigation explosion in our state or do one thing to stop the tremendous rate increases that will be implemented in the next 18-24 months. The bill was amended last week, to include the travel insurance framework. It passed the House Commerce Committee unanimously, taking less than 5 minutes to be heard and passed, and now awaits scheduling for a vote by the full House. The first page of the latest bill analysis has a good summary of its current provisions.
Senator Jeff Brandes (R-Pinellas) has filed a comparable bill, SB 1334 in the Senate, which leans more toward litigation reform. He filed an amendment 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). This Senate bill is dead, due to repeated postponement as part of the greater litigation reform negotiations occurring behind the scenes. (Return to Top of Page)
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 still awaits scheduling before the House Commerce Committee, whose next scheduled meeting is this Thursday (27th) but no agenda was available at press time. The first page of the latest bill analysis has a good summary of its current provisions.
A similar companion bill, SB 1828 by Senate Banking and Insurance Chairman Doug Broxson, has failed to pass its first committee. It was held up in that very committee last week by several amendments as the clock ran out on the meeting. We’re told that committee is no longer meeting this session. This issue appears dead for this session. (Return to Top of Page)
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. The Senate bill has stalled but the House bill is still moving. Details follow.
SB 1668, sponsored by Senator David Simmons (R-Altamonte Springs) was temporarily postponed last week during the Senate Banking and Insurance Committee meeting, its third of four committee stops. It had passed the Senate Health Policy Committee on a 5-4 party line vote the prior week, but is essentially dead.
HB 9 is sponsored by the House Civil Justice Subcommittee and Reps. Leek, Sabatini, and Stone. It passed the House Commerce Committee last week on a 15-9 vote and now heads to the Judiciary Committee, its last stop before the full House. The committee’s next scheduled meeting is this Wednesday (26th) but no agenda was available at press time.
As in past meetings, William Large of the Florida Justice Reform Institute, delivered a powerful presentation about this bill, discussing in intimate detail before the Commerce Committee about how lawyers and their favorite physicians game the system. You can find his testimony here and forwarding to the 39-minute mark in the video. (Return to Top of Page)
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 unanimously passed the Senate Rules Committee and awaits a floor vote in the full Senate. An identical House bill, HB 1409 by Rep. Michael Grant (R-Port Charlotte) awaits a floor vote in the full House. (Return to Top of Page)
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) is awaiting a vote before the full House. SB 1492, by Senator Tom Wright (R-Port Orange), is moving along and has its final committee hearing this Wednesday (26th) before the Senate Rules Committee.
Expect debate at this hearing over a strikeall amendment added by Senator Wright at the bill’s last hearing before the Senate Banking and Insurance Committee. Details follow. The strikeall amendment is basically 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 properties.
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, which was approved. 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, this Wednesday – highlighting the differences between the two versions. (Return to Top of Page)
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 was scheduled for a vote on the Senate floor in mid-February 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. (Return to Top of Page)
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 House Commerce Committee last week and awaits scheduling for a full vote in the House. An identical bill, SB 898 by Senator Joe Gruters (R-Sarasota), unanimously passed the Senate Innovation, Industry, and Technology Committee last week. It now heads to the Rules Committee but is not on the crowded agenda for this week’s Wednesday meeting.
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.
The bill also increases the funding available to FIGA through emergency assessments levied against insurance companies. The bill authorizes assessments up to 4% of a carrier’s net written premiums in this state in any single calendar year, an increase from the current 2% cap.
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 final vote by the full Senate. (Return to Top of Page)
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. This bill and a similar bill, SB 1408 by Senator Bill Montford (D-Tallahassee), never had their first hearings and are dead.
There are two comparable bills, HB 895 and SB 1606. Most are now calling these bills a “minibus,” which is a play on words for omnibus! Quite appropo! HB 895 has been amended/watered down to the point that it took less than 10 minutes to be heard and passed in the House Appropriations Committee last week, its second to last committee stop, with no debate or intense questioning. You can watch here at the 33:20 mark on the video.
Many of you recall that most insurance bills invite debate from both sides of the aisle, arguments about the consumer friendliness of proposed legislation and skepticism by many who believe that there are hidden agendas being promoted. Unfortunately, the lack of controversy as the bill was heard last week underscores the scant positive effect this bill will have on the looming property insurance crisis. The bill’s sponsor, Rep. Santiago, understands the process and has done his best to attempt litigation reform but there are few supporters of the concept in the Capitol. The first page of the latest bill analysis has a good summary of its current provisions.
The bill awaits scheduling before the House Commerce Committee, whose next scheduled meeting is this Thursday (27th) but no agenda was available at press time.
SB 1606 has a provision that would require the Department of Highway Safety and Motor Vehicles to develop an online verification system, to help identify uninsured motorists. It unanimously passed the Senate Infrastructure and Security Committee last week and now heads to the Appropriations Committee, its last stop. That committee is meeting this Thursday (27th) but no agenda was available at press time. (Return to Top of Page)
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. That committee meets this Wednesday (26th) but this bill is not on the agenda. Without a House companion, this effort appears dead. (Return to Top of Page)
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 previously passed out of the Senate Infrastructure and Security Committee, which he chairs, but without Bad Faith provisions, 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.
While the Senate version of PIP repeal appears dead because of the Bad Faith amendment that was attached to it (see the Bad Faith section above), the House version of PIP repeal is still moving. HB 771 by Rep. Erin Grall (R-Vero Beach) does not contain a bad faith provision. It passed the House Government Operations and Technology Appropriations Subcommittee on a 13-4 vote two weeks ago and awaits a hearing before the House Commerce Committee, its final stop. (That committee meets this Thursday, the 27th, but no agenda was available as of this writing.) We are told the bill won’t get another hearing without Bad Faith provisions being amended to it. But we were told the same thing going into its last successful committee meeting.
Rep. Grall – who is an attorney by occupation – has said that any bad faith changes would make the proposal “more complicated than it needs to be.” She’s been quoted in news reports as saying she remains open to adding bad faith language but questioned if there is a “landing spot” for such a provision.
A comparable HB 731 by Rep. Daniel Perez (R-Miami) passed the House Appropriations Committee on a 24-3 vote last week and now goes to the Health and Human Services Committee, which meets this Wednesday (26th) but there is no agenda as of this writing.
Rep. Grall’s 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 it 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.
The Bad Faith auto insurance amendment placed on Senator Lee’s PIP repeal bill that prompted him to pull it from further consideration on February 11 is the same one that Senator Jeff Brandes added to his own general Bad Faith Bill.
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.
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.”
(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.) (Return to Top of Page)
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 effort is still alive in the House, but is dead in the Senate.
The bill was re-referenced and is awaiting a hearing before the Commerce Committee, its final stop before the full House. That committee meets this Thursday, the 27th, but no agenda was available as of this writing. A recent report 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 yet again and is now dead for this session.
Another comparable “peer-to-peer car sharing” bill in the House, HB 723, by Rep. Jason Fischer (R-Duval) also 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. (Return to Top of Page)
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 unanimously passed the Appropriations Subcommittee on Criminal and Civil Justice last week, its second to last stop. It now goes to the Senate Appropriations Committee which meets this Thursday (27th) but has no agenda as of press time.
A comparable House bill, HB 903 by Rep. Byron Donalds (R-Naples) and Rep. Rene Plasencia (R-Orlando) will be heard tomorrow (25th) before the House Appropriations Committee, it’s second to last committee stop. Another comparable House bill, HB 6083 by Rep. Anthony Rodriguez (R-Miami) and Rep. Blaise Ingoglia (R-Spring Hill) is not scheduled this week before the Appropriations Committee and is essentially dead. (Return to Top of Page)
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, sponsored by Rep. Shevrin Jones (D-West Park), the House Deputy Democratic Leader, unanimously passed the Commerce Committee last week and now advances to the House floor. The similar Senate bill, sponsored by Senator Doug Broxson (R-Pensacola), is not scheduled before this week’s Rules Committee, its third stop, and so its fate is uncertain. (Return to Top of Page)
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 passed the Senate Rules Committee last week on a 16-1 vote and advances to the full Senate. There has been discussion and one objection by Senator Jeff Brandes, the solitary “no” vote last week, 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. (Return to Top of Page)
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. HB 7045, sponsored by two committees and Rep. Alex Andrade (R-Pensacola) would increase regulation of PBMs utilized in state employee pharmacy plans and is otherwise mostly oriented toward data collection by insurance regulators and state agencies for building future recommendations. It passed unanimously last week in the House Health & Human Services Committee and now goes to the House floor. A comparable bill in the Senate, SB 1338 by Senator Tom Wright (R-Port Orange), will be heard tomorrow (Tuesday) in the Appropriations Subcommittee on Health and Human Services, its second of three committee stops.
The two bills are a more conservative approach to a set of other bills which have languished in the legislature. Rep. Jackie Toledo (R-Tampa) 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.
The bill never had its first hearing, nor did a similar bill, SB 1444 by Senator Gayle Harrell (R-Stuart) and a comparable bill, SB 1682 by Senator Javier Rodriguez (D-Miami
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.
There does not appear to be any appetite to provide stronger 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! (Return to Top of Page)
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 passed its final committee last week on a 17-3 vote before the Senate Appropriations Committee, and now goes to the Senate floor. The House bill, sponsored by Reps. Jackie Toledo (R-Tampa) and Nicholas Duran (D-Miami), never received its first hearing and is dead. (Return to Top of Page)
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. (Return to Top of Page)
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. (Return to Top of Page)
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. The effort appears dead for this session. Details 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 failed to get a hearing before the House Health and Human Services Committee, one of two final stops. The committee is not expected to meet anymore this session.
A comparable bill in the Senate, SB 1288 by Senator Tom Wright (R-Port Orange), failed to get its first hearing before the Criminal Justice Committee, which is not expected to meet anymore this session. (Return to Top of Page)
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 but failed to get scheduled before the Civil Justice Subcommittee, which is no longer meeting. The Senate bill failed to get its first hearing before the Senate Banking and Insurance Committee. None of these bills contents are contained in any other bills. (Return to Top of Page)
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.(Return to Top of Page)
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. (Return to Top of Page)
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.)(Return to Top of Page)
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 will be heard tomorrow (Tuesday the 25th) before the Senate Appropriations Subcommittee on Criminal and Civil Justice, its second of three 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) never received a 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. The bill is awaiting a final Senate vote. It was amended last week in Senate deliberations to strike language in the bill that would have required that all police interrogations be recorded. Another change reduced the amount of controlled-substances allowed in order to receive a shorter sentence. 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. (Return to Top of Page)
Cruelty to Dogs – People who 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 but is not scheduled on this week’s (2/26) agenda. A similar House bill, HB 621 by Reps. Dan Daley (D-Coral Springs) and Scott Plakon (R-Longwood) never received a hearing.(Return to Top of Page)
LMA Newsletter of 2-24-20
