Recap of Week 7 & Preview of Week 8 of Session
This past week saw no movement on the major property insurance initiatives to re-balance the market and increase consumer protections from those who prey on unsuspecting policyholders in litigation schemes that drive up homeowners rates for all Floridians. You will see below in our tracking that no activity occurred in the Florida Legislature in this arena with the exception of bills that give property tax breaks for those who strengthen their home against flood threats and prohibit unlicensed activity by an adjusting firm. Also of note, the Senate passed a revamped automobile insurance bill replacing Florida’s No-Fault law, but there are questions on just how effective replacing Personal Injury Protection (PIP) insurance would be.
The budget is moving slowly along with legislators engaging in the conference committee process so that a select group of Representatives and Senators can hammer out their differences and work toward a timely April 30 adjournment. The only bills sent to the Governor’s desk this past week were those adopting provisions of the NAIC Credit for Reinsurance Model Law and the controversial HB-1, combating public disorder. This week, the Senate is expected to give final consideration to changes in vote-by-mail laws, with both chambers scheduled to consider proposals to revamp school-voucher programs. The House holds floor sessions beginning Wednesday and the Senate beginning Thursday.
As a reminder, as we have done in the past, we have separated this Bill Watch and those for the remainder of our weekly session newsletters into two categories – “Bills in Play” and “Bills Not in Play”. For those of you who were following closely and have a favorite that has been placed in the latter, don’t forget: It has been my experience that most good ideas take 3 years to pass!
Here is a master list of the legislative bills we’re following so far in the 60-day session (you can click the bill link to go directly to its details farther below). “Updated” bills are so noted. Updates within each bill are now noted in blue font:
Contingency Risk Multipliers
Residential Property Insurance Updated
Offers of Judgment
Litigation Financing Consumer Protection
Consumer Protection Updated
Citizens Property Insurance Corporation Updated
Insurance Policies Updated
Credit for Reinsurance Updated
Civil Liability for COVID-19 Damages Signed Into Law
Motor Vehicle Insurance (PIP) Updated
Demand Letters for PIP
Motor Vehicle Insurance Coverage Exclusions Updated
Hurricane Loss Mitigation Program Updated
Property Assessments for Elevated Properties Updated
Resilient Florida Grant Program Updated
Climate and Resiliency Task Force
Tourist and Convention Development Taxes Updated
Telehealth Practice Standards Updated
Florida Building Code Updated
Residential Property Insurance – There was no movement this past week in either chamber, with both chambers’ bills sitting and waiting, as House Speaker Chris Sprowls apparently single-handedly holds the keys to reform. There is movement to report this morning, as the House Commerce Committee meets (see the House version of this bill below in blue). The principal reform bill in the Senate, SB 76 by Senator Jim Boyd (R-Bradenton) passed the full Senate April 7 on a 27-13 vote, with four Democrats joining the majority and one Republican voting against it. The bill now sits with the House of Representatives. Senator Boyd told his fellow lawmakers that the bill is needed “to give homeowners certainty they won’t be crushed when they open their envelopes and see their renewal rates next year.”
Senator Jeff Brandes (R-Pinellas) said “you either get it or you don’t,” in reference to the clear pattern of double-digit rate increases that have occurred over the past 18 months and are expected to continue unless the bill becomes law. He cited other states that have the same or similar provisions in their laws that have a track record of reducing abuses and lowering rates.
But Senator Gary Farmer (R-Broward) the Senate Minority Leader and a trial lawyer, called the marketplace problems “a manufactured crisis” and accused insurance companies of “cooking their books” and that they were “swimming in profits.” He contends that the reason for higher litigation costs is because insurance companies aren’t properly paying claims.
His claim is contradicted by hard data from the National Association of Insurance Commissioners that was released April 2 in a letter by Insurance Commissioner David Altmaier to House Commerce Committee Chairman Blaise Ingoglia (R-Spring Hill). It shows that in 2019, Florida had 8% of all homeowners’ claims in the U.S., yet 76% of all homeowners’ claims lawsuits. And that Florida trends along with the national average in the number of claims closed without payment compared to total claims closed. Yet, Florida trial lawyers are filing a record number of lawsuits compared to other states, according to the data. “Florida’s ratio of suits opened to claims closed without payment is eight times higher than the next highest state at 27.75%. The state of Connecticut has the second highest ratio of suits opened to claims closed without payment at 3.4%. The next highest three states are New Jersey (2.45%), Rhode Island (2.23%), and Pennsylvania (1.82%),” Commissioner Altmaier wrote.
Senator Boyd also reminded Senators that there were 85,000 lawsuits filed in Florida last year against insurance companies and that since 2013, of the $15.2 billion in awarded damages, only 8% went to the policyholder, with plaintiff attorneys getting 71% in fees (and defense costs making up the remaining 21%). During the April 7 debate, Democrats pushed for several amendments that included one requiring a reduction in rates. All failed or were withdrawn. It was a fascinating 45-minute debate to watch, which you can do, by going to https://thefloridachannel.org/videos/4-7-21-senate-session/ and moving the video timer to 3 hours and 7 minutes.
The Senate bill, SB 76 focuses on attorney fees and roof replacements (and is comparable in some aspects to SB 212 in the “Bills Not in Play” section of this Bill Watch). The bill would require a notice of intent 60 days before initiating a lawsuit. The notice must specify the reason for the suit, the demand, and the amount of reasonable attorney fees incurred by the claimant. It creates a “strong presumption” for a lodestar fee (billable hours x reasonable hourly rate) but awards attorney fees based on the relationship between the plaintiff demand and final judgment. If the claimant recovers at least 80%, full attorney fees would be awarded; less than 20%, then there would be no attorney fees. Judgments between 20% and 80% would merit the same proportional attorney fee. The bill also attempts to thwart neighborhood roofing canvassers trying to use insurance policies to cover normal wear-and-tear. It would require insurance companies to provide full replacement for roofs under 10 years old and establish a reimbursement schedule for older roofs based on age and type of roof to pay actual cash value. A claim would have to be filed within two years (instead of the current three) and insurance companies would have the right to request inspection and photographs prior to work commencing.
The Senate bill has been subject to vigorous public debate and testimony over previous weeks, with supporters saying it’s a critical bill needed to stem rising insurance rates and opponents saying it would limit consumer rights. Senator Boyd previously filed a strike-all amendment that among other things, removed language related to unlicensed activity and claims adjusting because the provisions applied across various lines of insurance and this bill is an act related to “property insurance” only. Along the way, another provision that was previously added was also removed that clarified that only an attorney or public adjuster may prepare, complete or file an insurance claim for a policyholder or third-party claimant or negotiate on their behalf in a damages claim. That provision also gave the Department of Financial Services new powers to pursue administration action and impose fines on those bad actors.
The House bill, HB 305, which originally almost mirrored SB 76, has gone in another direction with a focus on claim data collection as one key point – even though Citizens Insurance, the Insurance Commissioner, and many others have supplied mountains of data about what is driving rates. The House bill also provides that unlicensed persons acting on behalf of the contractor, a public adjuster or apprentice may not solicit or incentivize the filing of a roof damage insurance claim; clarifies OIR’s examination authority over insurer “affiliates”; requires quarterly claims and litigation data; puts a cap on Citizens executive salaries and requires reinsurance costs be included in their rate filings regardless of purchase; changes the notice of claim deadlines to within two years of the date of loss; and includes a ten-day presuit notice and demand, after a determination of coverage, before bringing suit against an insurer with the insurer served either making a settlement offer or heading to appraisal or alternative dispute resolution. It also changes the eligibility to be a Citizens policyholder. Currently, private insurance company coverage has to be 15% more expensive to qualify to switch to Citizens. That would increase to 20% under the bill. It does however, prohibit attorney fee awards in cases that are dismissed. You can read more in the latest bill analysis by House staff.
When HB 305 passed the Insurance and Banking Subcommittee on a 12-2 vote on March 23, its sponsor, Rep. Bob Rommel (R-Collier) acknowledged the lack of available and affordable property insurance and that Citizens is growing “at an alarming rate.” Options, he said, have dwindled. “We cannot attract insurance carriers to the state of Florida,” Rommel said. He called his bill an adequate fix “without giving the insurance company too much power.”
The House bill on April 6 passed the Civil Justice and Property Rights Subcommittee by an 11-7 vote. Amendments that would have eliminated the increased cap for Citizens Insurance and required carriers to pay the cost of appraisals when the policyholder prevailed, were both voted down. Rep. Rommel told members, “We have to look at the fact that 90% of Floridians never ever file a claim yet every year they are forced to pay a higher rate because of the environment we’re in. 90% of those that file a claim they never file a lawsuit. Their claim is paid, they’re happy, they never change carriers. They’re good.”
Rep. Rommel also referenced Insurance Commissioner Altmaier’s letter to House Commerce Committee Chairman Blaise Ingoglia that stated in 2019, Florida had 8% of all homeowners’ claims in the U.S., yet 76% of all homeowners’ claims lawsuits. “So either we have really bad insurance carriers that don’t adjust claims and just want to deny, deny, deny, or something else is going on,” he said. “The top 50 insurance companies, most of them have been losing money for the past couple of years, and that’s why OIR has approved their rates increases, period. If we do nothing, it will get worse and Citizens will grow and we’ll put everyone with an insurance policy in Florida at risk.”
HB 305 will be heard this morning (April 19) before the Commerce Committee, which meets from 10 am-2 pm and is the bill’s last stop before the full House. Meanwhile, the House has the Senate bill and can act on that. At this point, the Senate bill, SB 76, does the most to cure the most serious ailments and abuses in Florida’s homeowners property insurance market. It is the best hope of stemming the red ink that that is in the Florida Domestic Property Insurers Summary of 2020 Year-End Financial Results spreadsheet.
The Office of Insurance Regulation made a presentation in January showing that homeowners insurance companies will likely double their losses from 2019 to 2020. The combined ratios are above 100 for the third year in a row, with net underwriting losses in each of the past five years. You can read about other past pertinent testimony on this bill from the February 2 Banking and Insurance Committee meeting and the March 9 Senate Judiciary Committee meeting. (Return to Top of Page)
Offers of Judgment – SB 686 by Senator Jeff Brandes (R-Pinellas) would allow parties in a lawsuit to make an exclusive offer of judgment identifying the total amount of indemnity or damages and stipulating attorney fees and costs would be determined at a later date by the parties or the court. A party serving the offer would not be required to stipulate an amount offered for attorney fees and costs; the other party would have 30 days to challenge the validity of the offer. The bill had its first hearing on February 15 before the Senate Judiciary Committee, which Senator Brandes chairs. There was lengthy debate on an amendment to clarify language, but the bill ultimately passed on a 6-4 vote. The bill passed 8-3 in the Banking and Insurance Committee on March 10 and awaits a hearing in the Rules Committee, its final stop before the full Senate. Committee staff prepared this updated bill analysis afterward. A similar bill in the House, HB 1533 by Rep. Fiona McFarland (R-Sarasota), differs in requiring arbitration in addition to a fee award hearing. The bill still awaits its first hearing. (Return to Top of Page)
Consumer Protection – HB 717 by Rep. Chuck Clemons (R-Dixie & Gilchrist) attempts to go to the heart of insurance fraud in Florida – unlicensed and unregulated contractors. The bill prohibits unlicensed activity by an adjusting firm; prohibits a person from providing claims adjusting services unless the person meets specified requirements; and prohibits licensed contractors & subcontractors from engaging in certain activities unless licensed & compliant as public adjusters. The bill also provides disclosure requirements that insurance coverage must meet before being eligible for export under Surplus Lines Law; prohibits foreign venue clauses in property insurance policies; and provides penalties for a licensed bail bond agent or a temporary bail bond agent who knowingly engages in certain activities.
The bill also address life & health insurance lines. It authorizes regulators to disapprove use of insurance agency names containing words “Medicare” or “Medicaid” and prohibits life insurers from writing new policies of industrial life insurance beginning on a certain date. The bill has received unanimous support in its committee stops to date and will have its last hearing this morning (April 19) before the House Commerce Committee.
While not identical, a similar bill SB 1598 by Senator Joe Gruters (R-Sarasota), has also received unanimous support in its previous committees. The bill had its final hearing before the Appropriations Committee last Thursday and passed 11-9 after a Gruters-sponsored amendment was added refining the bill’s language. The bill now goes to the Senate floor. The bill includes important language clarifying that only an attorney or licensed public adjuster may prepare, complete or file an insurance claim for a policyholder or third-party claimant or negotiate on their behalf in a damages claim. It also gives the Department of Financial Services new powers to pursue administration action and impose fines on those bad actors. These are the same provisions that had been in the Residential Property Insurance bill SB 76 but were removed from that bill in mid-March.
An early March report by the Office of Program Policy Analysis and Government Accountability (OPPAGA), which is Florida’s version of the federal GAO, looks at homeowners and automobile insurance fraud and unlicensed activity. The report shows that homeowners insurance fraud referrals to the Department of Financial Services (DFS) more than doubled over a five year period of 2015-2020. Yet few resulted in full investigation and even fewer in prosecution. The DFS Division of Investigative and Forensic Services reported that staffing issues affect its ability to investigate complex cases like insurance fraud. One in five investigator positions are vacant statewide with higher vacancies in metro areas that have higher number of fraud referrals. OPPAGA made a presentation to the Senate Judiciary Committee on February 1, which you can read more about here. (Return to Top of Page)
Citizens Property Insurance Corporation – SB 1574 by Senator Jeff Brandes (R-Pinellas) seeks to bring a more market-oriented approach to the state’s taxpayer-backed insurer of last resort in the face of reverse migration of policies back into Citizens over the past two years. The bill would revise the method for determining potential surcharges levied against policyholders, limit agent commission rates, and allow eligible surplus lines insurers to participate in Citizens depopulation, take-out, or keep-out programs in the same manner and on the same terms as an authorized insurer. It would also authorize information from underwriting files and confidential claims files to be released by the corporation to specified entities considering writing or underwriting risks insured by the corporation under certain circumstances. The bill passed the Senate Banking and Insurance Committee on an 11-1 vote on March 16. Significant changes were made to it under a series of amendments by Senator Brandes. Among the changes:
- Elimination of the 10% “glide path” annual rate increase cap for new Citizens customers after July 1 as well as owners of non-homesteaded property, such as second homes. Existing customers in homesteaded property would keep the cap.
- Non-homesteaded (meaning not owner-occupied) property is not eligible for coverage unless the premium for comparable coverage from an authorized insurance company is more than 15% greater than the Citizens premium.
- Deficits in any of Citizens’ three accounts would subject a Citizens’ policyholder to a special annual premium surcharge, based on Citizens current policy count. (15% premium surcharge for less than one million policyholders; 20% for one-million to 1.5 million policyholders; and 25% for 1.5 million or more.)
- Any deficit in its legal expenses would subject all policyholders to an additional annual premium surcharge.
- Agent commissions would be based on the market average commission rate paid by the top 20 admitted insurers in Florida.
- Enhanced requirements to qualify as an eligible surplus lines insurer for depopulation, take-out, and keep-out programs (see pages 38-42 in the bill).
In presenting his successful amendments before the March 16 committee, Senator Brandes said the goal is to “right the ship” of Citizens, noting “We are seeing radical growth that is exposing the state of Florida to untold liability.” Indeed, when Citizens grows, so does every Floridians’ risk of paying for that growth through state-mandated assessments, should there be a catastrophe (a single big hurricane or smaller multiple hurricanes). A healthy and competitive insurance market means Citizens shrinks. When Citizens offers cheaper rates than most of the rest of the private market (under the legislatively-created 10% annual “glide path” cap on rate increases) rather than actuarially sound rates, policies flock to Citizens, as they have been doing over the past almost two years.
Since March 2020, Citizens’ policy count has grown from 443,444 to 551,613 by February 28, 2021, an increase of 26.4%. Citizens is now receiving more than 3,000 new customers per week and expects to add a total of nearly 150,000 policies this year. During its March 15 rate hearing, Citizens asked insurance regulators for the same rate cap flexibility contained in this bill (see Citizens Pushing Higher Rates in our March 22 newsletter). This bill would do what the Florida Office of Insurance Regulation may choose not to do on its own.
The bill is scheduled to be heard this morning at 10 am before the Senate Appropriations Committee, its final stop before the full Senate. You can read more in this updated bill analysis prepared by Committee staff. There is no identical House bill. . (Return to Top of Page)
Insurance Policies – SB 742 is an omnibus bill that seeks to fix a number of issues in insurance law and regulation. The bill, sponsored by Senator Keith Perry (R-Gainesville) would redefine “covered policy” under the Florida Hurricane Catastrophe Fund in relation to certain collateral protection insurance policies; specify when service of process is valid and binding upon insurers; specify the entities that must receive requests for loss run statements; limit loss run statement requests with respect to group health insurance policies to group policyholders; and authorize, rather than require, rate filings for certain residential property insurance to include certain rate factors.
The bill also touches on mitigation and flood insurance. It authorizes insurers to file rating plans based on windstorm mitigation construction standards and authorizes them to require policyholders provide evidence of compliance with mitigation standards under certain conditions. It authorizes residential property insurers to file rating plans that provide certain windstorm mitigation premium discounts, credits and rate differentials; authorizes surplus lines agents to export flood coverage contracts or endorsements to surplus lines insurers without making certain diligent efforts; and redefines the term “assignment agreement” to include scopes of service & property inspection.
It has an identical bill in the House, HB 815 by Rep. Tommy Gregory (R-Bradenton). During the week of March 8, both bills were amended with the resulting Committee Substitutes. HB 815 has received unanimous support in its committee stops to date and will have its final hearing before the House Commerce Committee this morning (April 19). SB 742 awaits a hearing before the Appropriations Committee, its last stop before the Senate floor.
On the property insurance side, the bills clarify that only laws and ordinances enacted on or before the date of a loss are applicable to a particular loss. The trial bar objected to this provision, but a legacy carrier argued it was necessary to make sure any changes in building codes after a hurricane weren’t applied retroactively, forcing insurance companies to pay more for a claim.
Other property insurance changes include:
- Allowing an insurance agent to export a flood insurance policy or endorsement to a surplus lines insurer without first making a diligent effort to seek coverage from three or more authorized insurance companies
- Providing that s. 627.7152 F.S. governing assignment agreements, applies to instruments that assign or transfer post-loss benefits to a service provider that provides scopes of service or inspection services. It also clarifies fees charged by a public adjuster are not included.
- Eliminating mandatory use of the Building Code Effectiveness Scale in residential rate filings
- Authorizing an insurance company to use IBHS or other windstorm construction standards developed by an independent nonprofit scientific research organization when filing premium discounts, credits, and other rate reductions.
- Authorizing an insurance company to require a policyholder who is building or retrofitting a structure to show compliance with windstorm mitigation standards before receiving premium discounts, credits, or rate reductions
- Allowing a rate filing to include a modeling indication that is either a weighted or straight average of two or more models
- Requiring the Florida CAT Fund to reimburse for losses under collateral protection insurance that are equal to the amount of coverage under a lapsed homeowners policy (Return to Top of Page)
Credit for Reinsurance – SB 728 by Senator Doug Broxson (R-Pensacola) and the identical bill HB 733 by Rep. Elizabeth Fetterhoff (R-DeLand) adopt provisions of the NAIC Credit for Reinsurance Model Law, which is based on negotiations between U.S, EU, and UK regulators. It eliminates additional collateral requirements for reinsurers if the reinsurer is domiciled in a “reciprocal jurisdiction.” Capital and surplus requirements and solvency or capital ratio requirements would be determined by administrative rule. The bill requires the assuming insurer to notify the Florida Office of Insurance Regulation (OIR) if it falls below minimum requirements and agree to be bound by the jurisdiction of Florida courts and pay all final judgments. There are also OIR reporting requirements. You can read the bill analysis here. The House bill was fast-tracked this session and awaits a vote on the House floor. The Senate bill was passed by the Senate on April 1 in a 38-1 vote and sent to the House, which passed it on a 118-0 vote last Wednesday. It now goes to the Governor for his expected signature. (Return to Top of Page)
Civil Liability for COVID-19 Damages ̶ SIGNED INTO LAW Governor DeSantis on March 29 signed into law SB 72 by Senator Jeff Brandes (R-Pinellas). This is the comprehensive agreement on liability protection for businesses, organizations, health care facilities and their workers and is retroactive to the beginning of the pandemic. It’s the first bill of the 2021 session that the Governor has signed into law. At the signing ceremony, the Governor, flanked by Speaker Sprowls and Senate President Simpson, said businesses have been “operating in fear of frivolous lawsuits with no merit threatening their livelihoods.”
“We don’t want to be in a situation where people are scared of being sued just for doing normal things,” the Governor said. “We worked very early on to look and see ways we could provide some certainty for both business and health-care providers.”
The bill, which was a successful combination with Brandes’ other bill SB 74 and adopted by the House, outlines requirements for a civil action based on a COVID-19-related claim; provides that the plaintiff has the burden of proof in such action; and provides a statute of limitations, severability, and retroactive applicability. The bill also requires a finding of gross negligence and applies a tougher clear and convincing evidence standard.
The bill requires a plaintiff – for other than medical malpractice claims against healthcare providers – have a signed affidavit from a physician attesting COVID transmission came from the defendant before filing suit. Medical malpractice or nursing home-related claims would not require those affidavits. The bill has a good faith provision allowing judges to make the call whether defendants tried to substantially comply with government-issued health safety standards.
Before passing the bill on March 18, the Senate approved an amendment by Senator Brandes deleting a part of the bill that would have allowed businesses to claim immunity if “supplies, materials, equipment, or personnel necessary to comply with the applicable government-issued health standards or guidance at issue were not readily available or were not available at a reasonable cost.” The bill also has a sunset provision one year and a day after becoming effective and so only impacts lawsuits filed during that time period.
During the committee meetings, various amendments offered by Democrats failed, including one that would have changed workers’ compensation insurance laws to include a presumption for healthcare workers who test positive; another would have limited protection for nursing homes with a history of recent state or federal sanctions. The Senate had passed SB 72 in a 24-15 vote, with only one Democrat voting with the majority. The House vote was 83-31.
The House had previously pursued a two-track approach to provide COVID-19 liability protections through HB 7 and HB 7005, which are now moot with final passage of SB 74.
An early March poll by Mason-Dixon and Florida TaxWatch found that 74% of those surveyed say healthcare providers that act in good faith during the pandemic should have lawsuit protection (18% opposed) and 72% agreed that same protection should apply to regular businesses and organizations (20% opposed). (Return to Top of Page)
Motor Vehicle Insurance (PIP) ̶ After a three-week delay to negotiate changes among various interests, the Florida Senate last Wednesday night passed SB 54 by Senator Danny Burgess (R- Zephyrhills) on a 38-1 vote. The bill does away with Personal Injury Protection (PIP) coverage under Florida’s No-Fault insurance law and replaces it with bodily injury (BI) liability coverage for those other than the driver. A floor-filed amendment added a mandatory $5,000 in medical payment coverage (MedPay) for the driver to replace the PIP coverage. The bill also creates a new framework to govern motor vehicle claim handling and third-party bad faith failure to settle actions against automobile insurance companies, although there are questions on just how effective the bad faith provision would really be – and whether this bill will save most motorists money or cost more.
“Florida is one of only two states in the country that does not currently require drivers to carry liability coverage that would immediately kick in if they cause harm to another person while operating a motor vehicle,” said Senate President Wilton Simpson (R-Trilby) in a statement after the vote. “For everyone’s protection, drivers must be insured at sufficient levels. PIP coverage levels are clearly insufficient. It’s the right time for Florida to move to mandatory coverage for bodily injury liability.”
“The goal of this legislation is to lower the number of uninsured and underinsured drivers and provide a greater safety net in the event of an accident. Replacing our current no-fault system with a bodily injury liability system more appropriately places liability where it should be – with the party that caused the accident,” said Senator Burgess. “Additionally, the bill creates a new framework for handling bad faith litigation that provides a clear set of standards to govern the conduct of both parties in the claims handling process, which we believe will lead to better outcomes for both insured Floridians and their insurance companies.”
But Senator Jeff Brandes (R-Pinellas), the lone no vote, told his colleagues the bill could lead to more uninsured motorists on the road, especially because the MedPay is now mandatory, rather than optional. “You can’t go home and look your constituents in the eye and say this is going to lower your rates for your poorest constituents,” Brandes said. “It may raise their rates 15 or 20 or 70%. We don’t know. And that isn’t right.”
SB 54 repeals the No-Fault Law and its PIP coverage that has been in place since 1972 and replaces it, effective this January 1, with the following minimum financial responsibility requirements:
- For bodily injury (BI) of one person in any one incident, $25,000, and $50,000 for two or more people in any one incident.
- Retains the existing $10,000 financial responsibility requirement for property damage.
- Repealing the No-Fault Law eliminates the limitations on recovering pain and suffering damages from PIP insureds, which currently require bodily injury that causes death or significant and permanent injury.
To replace the driver protection under PIP, SB 54 requires MedPay with limits of $5,000 or $10,000, without a deductible, to cover the driver’s medical expenses. Insurance companies may also offer other policy limits that exceed $5,000, and may offer deductibles of up to $500. The bill requires that insurers must reserve the first $5,000 of MedPay benefits for 30 days to pay providers of emergency services or hospital inpatient care. The floor-filed amendment by Senator Gary Farmer (D-Broward), a trial lawyer, added the MedPay provision. It also added “the legal liability of an insurance company’s uninsured motorist coverage to include damages in tort for pain, suffering, disability or physical impairment, disfigurement, mental anguish, inconvenience, and the loss of capacity for the enjoyment of life experienced in the past and to be experienced in the future.”
The bill’s supporters insist it has the necessary bad faith provisions that insurance companies wanted as part of a PIP repeal. “The bill requires insurers to follow claims handling best practices standards based on long-established good faith duties related to claim handling, claim investigation, defense of the insured, and settlement negotiations,” according to the Senate President’s office release.
But the American Property Casualty Insurance Association (APCIA) disagreed in a statement issued after the Senate vote. “Senate Bill 54 lacks any meaningful legal reforms to Florida’s bad faith laws, which will only serve to fuel the current cycle of lawsuit abuse, worsen Florida’s legal environment, and could lead to even higher costs for consumers.” APCIA also wrote the bill is “bad news” for drivers who carry minimum coverage. “In Florida, approximately 40% of drivers carry minimum limits that are below what would be required under SB 54. Under the current proposal, these drivers could see their auto insurance costs rise by $165 to as much as $876 a year….and result in more uninsured drivers on Florida’s roads,” according to the APCIA release.
Another amendment was added during negotiations that adopted House bill provisions that cover for-hire vehicles and excluded drivers. SB 54 authorizes the exclusion of a specifically named individual from specified insurance coverages under a private passenger motor vehicle policy, with the written consent of the policyholder.
But the addition of mandatory Med Pay and at least some semblance of bad faith provisions, make the Senate bill different than the one the Florida House has before it. It’s some of these same differences that have caused similar bills to fail in past sessions. This year’s House bill HB 719 by Rep. Erin Grall (R-Vero Beach), while similar to SB 54, has no bad faith provision. It has a bunch of other measures, including revising garage liability insurance requirements, requirements on transportation network companies such as Uber and their drivers and vehicle owners, as well as financial responsibility requirements for owners or lessees of for-hire passenger transportation vehicles. The bill passed the House Civil Justice & Property Rights Subcommittee on March 11 with an amendment that requires that medical payments coverage must be offered with no deductible. The bill awaits a hearing before the House Insurance & Banking Subcommittee, its second of three stops. Critics contend that without bad faith reform, repealing PIP could lead to higher costs for consumers and increased litigation.
In late February, the Florida Office of Insurance Regulation issued a report at the request of the Commerce Committee, noting that auto premiums continue to increase across all coverages in Florida. The report includes additional information on the potential impact that changes to PIP could have on premiums. (Return to Top of Page)
Motor Vehicle Insurance Coverage Exclusions ̶ HB 273 by Rep. Scott Plakon (R-Longwood) creates a named driver exclusion. It provides private passenger motor vehicle policies may exclude identified individuals from specified coverages and provides exceptions. The bill was postponed at the March 29 House Commerce Committee, but is scheduled to be taken up at this morning’s Commerce Committee meeting, its second and last stop. It has an identical Senate companion in SB 420 by Senator Hooper, which unanimously passed the Rules Committee this past Friday and will head to the Senate floor this week. (Return to Top of Page)
Hurricane Loss Mitigation Program – SB 168 by Senator Ed Hooper (R- Pinellas) continues a controversial program that while on its face appears to “harden” mobile homes from the threat of hurricanes, it has been questioned by many mitigation experts who have said the effectiveness of the $2 million annual program is doubtful. We will keep a close eye on this bill in hopes the legislature will ask for concrete data to show the results of this appropriation post Hurricane Irma. The bill passed unanimously last Thursday in its last hearing before the Appropriations Committee. It’s scheduled to have its first vote on the Senate floor this week. A similar bill in the House, HB 423, by Rep. Kaylee Tuck (R-Sebring), is awaiting a hearing before the House Appropriations Committee, its third of four committee stops. (Return to Top of Page)
Property Assessments for Elevated Properties – SB 1186 and its linked proposed constitutional amendment SJR 1182, both by Senator Jeff Brandes (R-Pinellas), would exempt from property taxes any improvements made by homeowners to mitigate flood risk. This would include elevating buildings and components, filling basements, and other waterproofing measures, including stormwater runoff mitigation. Such improvements would not be considered in determining assessed values if the work meets National Flood Insurance Program and Florida Building Code elevation requirements. The bills’ analysis notes FEMA statistics that more than 1.7 million properties in Florida are at risk of flooding in a 100-year storm. The two Senate bills unanimously passed the Finance and Tax Committee last Wednesday and await a hearing before the Appropriations Committee before going to the full Senate. The House version, HB 1377, unanimously passed the State Affairs Committee last Thursday and now goes to the House floor for consideration. If approved by three-fifths of both chambers, the measure would go on the 2022 ballot for Florida voters to ultimately decide. (Return to Top of Page)
Resilient Florida Grant Program – The Florida Legislature in early April passed SB 1954 and SB 2514 that create and fund sea-level rise and flood resiliency efforts across the state up to $100 million a year. The bills were passed unanimously by the Senate and the House and are identical to the House’s HB 7019 and HB 7021 that are at the heart of House Speaker Chris Sprowls’ commitment to combat sea-level rise that spans several legislative bills he’s named the “Always Ready” plan. Following the vote, the Speaker said the package is “one of the most robust and bold proposals in the entire United States of America to tackle sea level rise and coastal flooding of any state.” Senate President Wilton Simpson said the bills will help Florida become “a national example of resilient communities.” The bills await Governor DeSantis’ signature to become law.
This follows the Governor’s announcement earlier this year that he’d like to spend $1 billion over the next four years on resiliency projects. The bills recognize that Florida “is particularly vulnerable to adverse impacts from flooding resulting from increases in frequency and duration of rainfall events, storm surge, and sea level rise…that pose economic, social, environmental, and public health and safety challenges to the state.”
The Legislature last week also passed SB 2512 to fund Speaker Sprowls’ and Senate President Simpson’s Plan to Invest in Florida’s Infrastructure that will use more than $400 million in real estate documentary stamp taxes currently dedicated to affordable housing to partially fund resiliency-related projects. During the upcoming fiscal year, affordable housing programs would receive approximately $200 million. Programs established to mitigate the impacts of sea level rise and enhance wastewater treatment programs would each receive about $111 million. You can read more in this release.
This measure did not receive the same unanimous approval (25-14 in the Senate and 78-38 in the House) out of concern that the Sadowski Trust Fund, dedicated solely to affordable housing but annually raided by the Legislature to fund other projects, was now being permanently raided. Opponents argued that federal stimulus money should instead fund the infrastructure projects. Within the bill though is a provision that prohibits raiding or “sweeping” affordable housing money in the future, which supporters argue creates a floor for affordable housing funding where none existed before.
SB 1954 would establish the Resilient Florida Grant Program within the Department of Environmental Protection (DEP) and set-aside up to $100 million a year by 2022-2023 for local governments to mitigate effects of rising sea levels through community resilience planning. It also requires the DEP to:
- Complete a comprehensive statewide flood vulnerability and sea level rise data set and assessment;
- Develop a three-year Statewide Flooding and Sea Level Rise Resilience Plan and annually submit the plan to the Governor and Legislature;
- Require water management districts to annually submit proposed projects and their requirements to DEP for inclusion in the plan; and
- Require DEP to implement a scoring system for assessing those projects.
The bill also requires the Legislature to review and approve funding for projects, subject to appropriation; authorizes local governments to create regional resilience coalitions to be funded by DEP; and establishes the Florida Flood Hub for Applied Research and Innovation within the University of South Florida College of Marine Science. The hub would be required to submit an annual report to the Governor and Legislature. The Office of Economic and Demographic Research would also be required to include specified information relating to inland and coastal flood control in certain assessments & analysis it performs.
SB 2514 establishes the Resilient Florida Trust Fund within DEP to fund the Resilient Florida Grant Program and the Statewide Flooding and Sea Level Rise Resilience Plan and all of the parts above.
“We are a low-lying state surrounded by water on three sides, and that water is flowing into places it shouldn’t. Flooding is a real threat to people’s homes, businesses and livelihoods,” said Speaker Sprowls in a news release following passage of the two house bills out of their first committee. “The success of our state is inextricably connected to the proper management of water.”
Rep. Cabrera, who sponsored the House bills, said that “The effects of flooding are felt all across the state in both coastal and inland communities, and we must address these threats using a coordinated statewide approach, and these bills do just that.”
Governor DeSantis has suggested that some of the new federal stimulus plan money going to Florida could be used to fund these resiliency proposals. Florida is reportedly set to receive about $8 billion in stimulus money. (Return to Top of Page)
Tourist and Convention Development Taxes – SB 2008 by Senator Manny Diaz (R-Hialeah) would make it easier for local governments to fund flood mitigation projects. It authorizes a county to impose both a tourist development tax and convention development tax to finance flood mitigation projects or improvements, and specifies that certain taxing authority expires 5 years after the date the authority was approved in an election. The bill also expands funding capacity by deleting a provision requiring an extraordinary vote of a governing board for a county or sub-county special taxing district to increase its tourist development taxes. It was scheduled to have its first hearing on March 30 before the Community Affairs Committee but was temporarily postponed. A similar bill in the House, HB 1429 by Rep. Bryan Avila (R-Miami Springs) was passed last Wednesday by the House on a 114-2 vote and was sent to the Senate for consideration. (Return to Top of Page)
Telehealth Practice Standards – HB 247 by Rep. Tom Fabricio (R-Hialeah) and Rep. Mike Giallombardo (R-Cape Coral) revises the definition of “telehealth” and would allow providers to prescribe controlled substances during telehealth visits. The House bill was amended to allow telehealth visits to be audio only and also allow providers to prescribe controlled substances only for patients in hospitals, nursing homes, or receiving hospice care, or for treatment of a psychiatric disorder. The bill unanimously passed the Health & Human Services Committee last Wednesday and is scheduled to go to the House floor this week for consideration. An identical Senate bill, SB 660 by Senator Manny Diaz (R-Hialeah) still awaits its first hearing. (Return to Top of Page)
Telehealth – SB 700 by Senator Ana Maria Rodriguez (R-Doral) would require the Agency for Health Care Administration to reimburse the use of telehealth services under certain circumstances and with certain limitations; authorize telehealth providers to prescribe specified controlled substances under certain circumstances; authorize out-of-state physician telehealth providers to engage in formal supervisory relationships with certain non-physician health care practitioners in this state; authorize registered pharmacy technicians to compound and dispense medicinal drugs under certain circumstances; and exempt certain registered pharmacy technicians from specified prohibitions. The bill awaits a hearing before the Senate Appropriations Committee, its final stop before the Senate floor. The bill now contains a series of amendments that further refine its language and among other things, permits pharmacists providing health care services through telehealth to be reimbursed; allows participation by out-of-state medical providers enrolled in Florida Medicaid; and clarifies that telehealth providers may not prescribe Schedule I controlled substances or issue a physician certificate for medical marijuana. House bill HB 247 (above) is considered comparable for requiring similar AHCA reimbursement. (Return to Top of Page)
Construction Defects – SB 270 by Senator Keith Perry (R-Gainesville) revises and expands the mandatory procedures governing how construction defects disputes are resolved. The bill would define the term “material violation” in a warranty and require that a person submit a construction defect claim to the warranty provider before bringing a cause of action; require that a claimant submit a construction defect claim to the warranty provider before serving a notice of claim; authorize a person served with a copy of a notice of claim to perform a reasonable inspection of the property subject to the claim; require, instead of authorize, a person served with a notice to serve a copy of the notice to specified persons under certain circumstances, among other changes. You can read the bill analysis here. The bill passed the Senate Judiciary Committee on February 15 on a 9-1 vote and still awaits a hearing in the Community Affairs Committee, it’s second of three stops.
In the House, a similar bill, HB 21 by Rep. Alex Andrade (R-Pensacola) would also require a claimant to notify a mortgagee or assignee within a specified timeframe after settlement. You can read the bill analysis here. It has narrowly passed its previous committees and is awaiting a hearing before the Judiciary Committee, its last stop before going to the full House.
The Berger Singerman law recently published an interesting analysis of the bills, Does the Florida Legislature Finally Have a Fix to Construction Defect Law? (Return to Top of Page)
Florida Building Code – HB 401 by Rep. Elizabeth Fetterhoff (R-DeLand) exempts assisted living facilities from compliance with rules relating to lifeguard standards; authorizes substantially affected person to file petition with the Florida Building Commission to review local government regulations and provides requirements for such petition; provides requirements for the commission when considering petition; requires the commission to issue nonbinding advisory opinion within a specified timeframe; authorizes the commission to issue errata to code; prohibits local government from requiring certain contracts for issuance of building permit; and requires evaluation entities that meet certain criteria to comply with certain standards. The bill unanimously passed the Commerce Committee last Wednesday and now goes to the full House. An identical Senate Bill SB 1146 by Senator Jason Brodeur (R-Lake Mary) was later amended to allow private inspection of onsite sewage treatment and disposal systems, and a process for local zoning decisions to be reviewed by the Florida Building Commission. The bill unanimously passed the Appropriations Committee last Thursday with an amendment that would prohibit a municipality, county, or special district from using preliminary maps issued by FEMA for any law, ordinance, rule, or other measure that has the effect of imposing land use changes. Another included amendment defines “qualified private providers” for plan reviews and inspection services and requires local jurisdictions to reduce permit fees to reflect the cost savings of using such private providers. It is scheduled to go before Rules Committee tomorrow at 8:30 am, its final stop before heading to the full Senate. (Return to Top of Page)
Contingency Risk Multipliers – SB 212 by Senator Jeff Brandes (R-Pinellas) is a renewed attempt to put the brakes on a growing abuse of attorney fee awards. The bill provides that for certain attorney fees awarded for claims arising under property insurance policies, a strong presumption is created that a lodestar fee (billable hours x reasonable hourly rate) is sufficient and reasonable; and providing that such presumption may be rebutted only under certain circumstances, specifically “in a rare and exceptional circumstance with evidence that competent counsel could not be retained in a reasonable manner.” The bill passed the House last session but got hung up in the Senate. The bill still awaits its first hearing. There is no identical bill in the House. While this bill is not in play, Senate Bill 76 has reforms to the application of the Contingency Fee risk multiplier and as we report this edition, SB 76 has passed the Senate and is awaiting a decision by House leaders. (Return to Top of Page)
Litigation Financing Consumer Protection – SB 1750 is a second attempt by Senator Doug Broxson (R-Pensacola) to create 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. The bill was scheduled to have its first hearing on March 24 before the Senate Banking and Insurance Committee but was postponed. A similar House bill, HB 1293 by Rep. Toby Overdorf (R-Stuart) awaits its first hearing. Senator Broxson’s bill last year never got a hearing; its counterpart in the House passed all three of its committees but was never heard by the full House and the Senate. (Return to Top of Page)
Medical Expenses – SB 846 by Senator Jeff Brandes (R-Pinellas) is another legal reform bill that would require evidence of medical expenses in personal injury claims be based on the usual and customary charges for such treatment or the amount covered by the claimant’s health insurance and their share of expenses under insurance. Supporters say it will reduce the practice of inflating medical expenses in an attempt to obtain multi-million-dollar payouts for plaintiff attorneys. The bill awaits a hearing in the Health Policy Committee, its second of three stops. A similar bill, HB 561 by Rep. Randy Maggard (R-Pasco) is awaiting its first hearing before the House Civil Justice & Property Rights Subcommittee. (Return to Top of Page)
Demand Letters for PIP ̶ HB 237 by Rep. Keith Truenow (R-Tavares) requires written notice of intent to initiate litigation for relief related to Personal Injury Protection (PIP) benefits. It also revises requirements for demand letter for PIP benefits and prohibits actions by & prosecutions on behalf of claimants unless certain requirements are met. The bill still awaits its first hearing. There is no identical Senate bill. (Return to Top of Page)
Resiliency ̶ SB 514 by Senator Ray Rodrigues (R-Lee) establishes the Statewide Office of Resiliency within the Governor’s Office. It also creates the Statewide Sea-Level Rise Task Force within the resiliency office and authorizes the Department of Environmental Protection to contract for specified services, upon request of the task force. It also requires the Environmental Regulation Commission to take certain action on the task force’s recommendations. This bill contains an appropriation of $500,000. A similar proposal passed the Senate in 2020 but failed to get through House committees. The bill passed the Senate Environment and Natural Resources Committee unanimously on February 15 and awaits its second stop before the Appropriations Subcommittee on Agriculture, Environment, and General Government. An identical House companion in HB 315 is awaiting its first hearing. (Return to Top of Page)
Climate and Resiliency Task Force – HB 1623 by Rep. Ben Diamond (D-Pinellas) establishes a Climate & Resiliency Task Force to be headed by the Florida Insurance Commissioner to consider the impact of climate change on the state’s insurance market. This is an exciting development in furtherance of much-needed flood protection and expanded insurance coverage. The Task Force would identify protection gaps in the state’s insurance market and assess and recommend risk-transfer mechanisms and other approaches for reducing, managing, and mitigating climate-related risk. Per the bill, the Task Force “shall consider mechanisms that improve access to affordable property and flood insurance for all residents of the state; apply technology and innovation to the mitigation of climate-related risks; encourage investment in natural infrastructure to reduce climate-related risks to communities; mitigate the effects of extreme heat on agriculture and other businesses throughout the state; and provide coverage for additional living expenses relating to flood damage.” The Task Force would produce a report every two years to the Governor, Cabinet, & Legislature. The bill was filed March 2 and awaits its first hearing in the House Insurance & Banking Subcommittee. A similar Senate bill, SB 1872 by Senator Darryl Rouson (D-Hillsborough & Pinellas), was filed two days later and awaits its first hearing before the Banking and Insurance Committee. (Return to Top of Page)
LMA Newsletter of 4-19-21