Recap of Week 8 & Preview of Week 9 of Session
The Florida Legislature today begins the final week of its 60-day regular session. Budget negotiations that extended into this past weekend report good progress reaching agreement on what is expected to be close to a $100 billion budget for the new fiscal year that begins July 1. The goal now: get the proposed budget printed and in the hands of lawmakers by Tuesday afternoon, to begin a mandatory 72-hour “cooling off” period designed to give those lawmakers a chance to read the budget, ask questions, and prepare for a vote on Friday, the last scheduled day of session.
While they wait for Friday, the legislature has a lot of unfinished business, including residential property insurance reform, consumer protection against insurance fraud, an insurance omnibus bill, and perhaps the end of nearly 50 years of no-fault auto insurance in Florida, along with a load of other bills – all competing to be heard and approved before time runs out.
This past week saw progress made on increasing unemployment benefits and voting procedure changes, to name but a few measures. The Governor signed a bill requiring online retailers to begin collecting and remitting the estimated $1 billion in lawfully-owed, but mostly uncollected sales and use tax on purchases made by Florida residents. The new revenue will be used to replenish the unemployment trust fund wiped out by the coronavirus and eventually lower the business rent tax from 5.5% to 2%. The Governor also announced a gambling agreement with the Seminole Tribe that will generate about $500 million a year to state coffers. The deal will be the subject of a special legislature session May 17 required for final approval.
As we have the past few weeks, this Bill Watch is split 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 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
Medical Expenses
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
Community Associations Updated
Hurricane Loss Mitigation Program Updated
Property Assessments for Elevated Properties Updated
Resiliency
Resilient Florida Grant Program
Climate and Resiliency Task Force
Tourist and Convention Development Taxes Updated
Telehealth Practice Standards Updated
Telehealth
Construction Defects
Florida Building Code Updated
Residential Property Insurance – At 4.31 pm on Thursday, April 22, the House released its new version of HB 305 by Rep. Bob Rommel, this year’s property insurance bill. We expected it to be released 4 days earlier but the House needed more time to deliberate the needed reforms to reverse the explosive litigation trends, stop the misleading solicitations and give consumers a break from the current, necessary rate increases flooding our mailboxes. It passed the House Commerce Committee on a 14-7 vote the next day and is ready for consideration by the full House this week.
The Senate has personified leadership to its fullest, crafting and passing from the full Senate a balanced bill (SB 76 by Senator Jim Boyd) that closely aligns with the Insurance Commissioner’s April 2 letter recommendations. SB 76 is now in the House and the House “answered” the Senate’s reform bill with their own, reflected in HB 305’s new contents. Legislators will need to agree on a final version of the bill in this last week of session.
The difference between the two bills is, in a word, telling. In the legislative game, proposed legislative ideas are contained in a bill. Often the question is asked when discussing the origination of a bill’s contents, “who is driving this idea?” In the House, Speaker Chris Sprowls is in the driver’s seat. Speaker Sprowls is a bright lawyer and during one of last week’s press discussions when asked by a reporter what the House’s property insurance bill will address, he focused on the door to door and mail solicitations that he wants to see reigned in. I had hoped to hear him say that the House wants to find a way to stop the litigation factories across our state with thousands of lawsuits filed every month. Maybe Speaker Sprowls does have the right focus? Is the connection between the solicitations and lawsuits the single most important key to reform? HB 305 has a balanced approach to the attorney fee calculation as does SB 76 but SB 76 doesn’t have any reference to solicitors. To compare the two, think about the following points…and I invite your calling or emailing me to discuss!
- Solicitation law improvements? SB 76 no, but is included in SB 1598 & HB 717 (below); HB 305 yes.
- Attorney fee law changes? In both bills.
- Contingency fee multiplier restrictions? In both bills but the House bill has a puzzling “multiple choice” for judges to pick one of 5 conditions to allow a multiplier.
- Citizens Property Insurance Corporation rate glide path increase? SB 76 no; HB 305 yes.
- More claims data and a costly data set to be delivered regularly beginning next year? SB 76 no; HB 305 yes. How much more data do we need when the Insurance Commissioner summed up the data from his letter in one sentence: 8% of all homeowner’s claims in the U.S are in Florida, yet 76% of all homeowners’ claims lawsuits are here.
- Time limit changes to file a claim? In both bills, with HB 305 adding a supplemental claim component.
- Allowing choices for consumers to pick the roof coverage fitting their budget? In both bills but HB 305 doesn’t include a schedule of coverage based on roof age.
And the most curious piece of the House Bill is the added language so the insurance commissioner can seek the books and records of insurance company “affiliates” which the Office of Insurance Regulation (OIR) can do now. Our OIR regulatory framework is the most stringent in the country: I know – I worked there! As I mentioned earlier, wonder who is driving that?!
The Senate bill, SB 76, does the most to cure the 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. Click here to read the past history of these two bills. (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 has received unanimous support in its committee stops and likewise passed the House Commerce Committee by a 20-0 vote last Monday and is ready to be considered by the full House. 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. Specifically, the bill:
- Establishes licensing requirements within the Department of Financial Services (DFS) similar to those for insurance agencies and requires all adjusting firms become licensed;
- Makes it a third degree felony for knowingly aiding or abetting an unlicensed person in transacting insurance or otherwise engaging in insurance activities without a license;
- Requires a public adjuster to provide a written estimate of the loss within 60 days after the date of the contract and allows the policyholder or claimant to cancel a public adjuster contract within 10 calendar days without penalty;
- Prohibits agents or adjusters from doing in-person or telephone solicitation after 9 p.m. or before 8 a.m. unless requested by the prospective customer; and
- Authorizes DFS to impose fines against unlicensed persons performing claims adjusting, soliciting, or other related activities.
The bill also establishes new rules and requirements on insurance companies beginning January 1, 2022, specifically:
- Requires an insurance company inform an applicant that a credit report or score is being requested for underwriting or rating purposes and to notice the availability of the DFS free financial literacy program;
- Requires an insurance company to begin its investigation of a claim within 14 days after receiving the proof of loss;
- If the investigation involves a physical inspection of the property, the adjuster assigned by the company must provide the policyholder with his or her name and license number;
- Requires the company maintain a record or log of each adjuster who communicates with the policyholder and provide the list of adjusters to the DFS of the Office of Insurance Regulation (OIR);
- Requires the company, when providing a preliminary or partial estimate regarding a claim, to provide the following statement to the policyholder: “THIS ESTIMATE REPRESENTS OUR CURRENT EVALUATION OF THE COVERED DAMAGES TO YOUR INSURED PROPERTY AND MAY BE REVISED AS WE CONTINUE TO EVALUATE YOUR CLAIM. IF YOU HAVE QUESTIONS, CONCERNS, OR ADDITIONAL INFORMATION REGARDING YOUR CLAIM, WE ENCOURAGE YOU TO CONTACT US.”;
- Requires the company that issues a payment on a claim which is not the full and final payment, to provide the following statement: “WE ARE CONTINUING TO EVALUATE YOUR CLAIM INVOLVING YOUR INSURED PROPERTY AND MAY ISSUE ADDITIONAL PAYMENTS. IF YOU HAVE QUESTIONS, CONCERNS, OR ADDITIONAL INFORMATION REGARDING YOUR CLAIM, WE ENCOURAGE YOU TO CONTACT US.”; and
- Requires the company to provide a Homeowner Claims Bill of Rights to a policyholder within 14 days after receiving an initial communication concerning a claim and after a state of emergency declaration.
Under the bill, consumers are no longer obligated to pay the $100 deductible to FIGA to receive payment on any claim through FIGA; it also provides that such a claim does not include a return of premium from any policy not in force on the date of final company liquidation.
The bill also provides disclosure requirements that insurance coverage must meet before being eligible for export under Florida’s Surplus Lines Law, specifically:
- Requires a consumer purchasing a surplus lines policy to sign a disclosure clearly stating that it is a surplus lines policy, that coverage may be available in the admitted market, and that the policy is not protected under the Florida Insurance Guaranty Act with respect to any recovery in the case of an insolvent unlicensed insurer; and
- Labels as “sliding” issuing a policy or submitting a premium invoice to a mortgagee or escrow agent without the prior informed consent of the property owner.
The bill also address life & health insurance lines. The bill:
- Authorizes regulators to disapprove use of insurance agency names containing the words “Medicare” or “Medicaid” and prohibits life insurers from writing new policies of industrial life insurance beginning on June 30, 2023; and
- Prohibits agents and adjusters from doing anything that allows a consumer’s personal financial or medical information to be made publically available.
While not identical, a similar bill SB 1598 by Senator Joe Gruters (R-Sarasota), also received unanimous support in its previous committees. It passed the full Senate last Thursday on a 34-3 vote and was sent to the House for its consideration. The bill retains 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, including solicitors and those performing related services. 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.
The Senate and House bills will need to be reconciled in this last week of session before a final version can be passed and sent to the Governor for his consideration.
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 Appropriations Committee last Monday on a 12-5 vote and is ready for consideration by the full Senate. It underwent additional changes in the past two weeks and now calls for:
- Elimination of the 10% “glide path” annual rate increase cap for new Citizens customers after January 1, 2022 on residential properties used as their primary residence with a dwelling replacement cost of less than $700,000 or single-unit condominiums with a dwelling and contents replacement cost of less than $700,000. Existing customers in their primary residences would keep the cap.
- Citizens residential policyholders would become ineligible for coverage upon receiving an offer from an authorized insurance company that is less than 15% greater than the Citizens premium. (Under current law, Citizens policyholders remain eligible unless they receive an offer of comparable coverage less than the current Citizens premium, which for many policyholders is subject to the glide path’s 10% limit on annual rate increases.)
- Deficits in any of Citizens’ three accounts would subject a Citizens’ policyholder to a special annual premium surcharge, based on Citizens current policy count. (20% of premium for a count of one-million to 1.5 million policyholders; and 25% of premium for 1.5 million or more policyholders.)
- 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).
You can read more in this updated bill analysis prepared by Committee staff last week. There is no House bill, but provisions in this Senate bill could be included this week as amendments to other Senate bills likely to go to the House for consideration.
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 past week, the Florida Office of Insurance Regulation denied the request (see Regulators Reject Citizens Rate Cap Request in this newsletter) so the hope of actuarially-sound rates for new Citizens customers now rests solely on this bill.
In his committee presentations, 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 up to 5,000 new customers per week and expects to add a total of nearly 150,000 policies this year. (Return to Top of Page)
Insurance Policies – SB 742 by Senator Keith Perry (R-Gainesville) and HB 815 by Rep. Tommy Gregory (R-Bradenton) are omnibus bills that seek to fix a number of issues in insurance law and regulation. The bills 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 bills also touch on mitigation and flood insurance. They authorize 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. They authorize 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.
The two bills were identical up until last week. HB 815 was amended and unanimously passed the House Commerce Committee last Monday and is ready to go to the full House. Among the changes made to the House bill was the elimination of a provision inserted in March 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 in March, 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. Now the provision is out. Also gone now is a provision eliminating mandatory use of the Building Code Effectiveness Scale in residential rate filings. The Senate bill, SB 742, still awaits a hearing before the Appropriations Committee, its last stop before the Senate floor and is now unlikely. So it appears the House will be driving this effort and sending its bill, when passed, to the Senate for consideration.
Other specifics in the bills include:
- Reenacting the exemption 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;
- 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 approved hurricane models; and
- 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 was ready for 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 on April 14, setting aside HB 733. It now sits with 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) ̶ The Florida House last week agreed to go along with most of the Senate’s plan to do 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. The House on Friday agreed to simply take up SB 54 by Senator Danny Burgess (R- Zephyrhills) which the Senate passed on April 14. But the House amended the bill to make medical payment coverage (MedPay) optional and sent it back to the Senate for action this week. Rep. Erin Grall (R-Vero Beach), who made the amendment and sponsored the House’s original bill, was quoted by media as commenting that “MedPay could drive costs if it looks too much like PIP.”
The Senate’s version included a mandatory $5,000 in MedPay to replace the driver protection under PIP. It 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.
When it passed the Senate on April 14, 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.”
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.
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.
The MedPay provision, to cover any driver injuries was added in an amendment by Senator Gary Farmer (D-Broward), a trial lawyer. 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 at the time.
But the American Property Casualty Insurance Association (APCIA) disagreed in a statement issued after the April 14 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 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 had before it. It’s some of these same differences that have caused similar bills between the two chambers to fail in past sessions. Rep. Grall, who sponsored this year’s House bill HB 719, purposely did not include a bad faith provision. The News Service of Florida wrote last week that “Grall acknowledged she had to perform some ‘mental gymnastics’ to agree after five years to include the bad-faith issue in the bill. “The case law has been clear on what the obligations of the insurance company has to ensure. We don’t need to always codify what’s in case law,” Grall was quoted by the News Service of Florida. “So, for me there’s been a concern about codifying something that everybody comes back and doesn’t have a real deep understanding of. So, I have felt like the case law was sufficient.”
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 passed unanimously last Monday in the House Commerce Committee and is ready for the House floor. It has a similar Senate companion in SB 420 by Senator Ed Hooper (R- Pinellas), which passed the Senate Wednesday on a 40-0 vote with this amendment and was sent to the House for consideration. (Return to Top of Page)
Community Associations – SB 630 is a bill sponsored by the Rules and Regulated Industries Committees and Senator Dennis Baxley (R-Lady Lake) that prohibits insurance policies from providing specified rights of subrogation under certain circumstances. The property insurance part of the bill limits subrogation in condominium policies. It prohibits a condominium unit owner’s policy from including subrogation rights against the condominium association if the association’s property policy does not allow subrogation rights against unit owners. So if a second floor unit owner made a water claim for damage caused by a third floor leak that was due to a lack of association maintenance, the insurance carrier would have limited redress under this bill. It would essentially revert the law back to pre-2010 statute. This has been a perennial effort before the legislature for the past several years but has a better chance of passing this year.
The Senate unanimously passed the bill on April 7 and sent it to the House, where it has sat for several weeks. The House is now scheduled to consider the Senate bill in its floor session today. By doing so, the House has essentially put aside its own similar bill, HB 867, likewise a committees’-sponsored bill with Rep. Jason Shoaf (R-Port St. Joe) that passed all its committees this session and has been awaiting consideration by the full House. Both bills also contain non-insurance provisions, including authorizing an association’s board to take certain actions relating to electric vehicle charging stations and natural gas fuel stations; authorizing parties to initiate presuit mediation under certain circumstances; revising the allowable uses of certain escrow funds withdrawn by developers; and authorizing certain developers to include reserves in the budget. (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 the Senate unanimously last Wednesday and was sent to the House for consideration. A similar bill in the House, HB 423 by Rep. Kaylee Tuck (R-Sebring), has been stalled in its 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 Appropriations Committee and are scheduled to be considered on the Senate floor today. The House version, HB 1377, unanimously passed the full House last Wednesday. 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 on April 14 by the House on a 114-2 vote and was received by the Senate last week for its consideration this week. (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 Florida House last Thursday and was sent to the Senate, where it has been referred to the Appropriations Committee for consideration this week. A comparable Senate bill, SB 660 by Senator Manny Diaz (R-Hialeah) never received a hearing. (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 Florida House last Thursday and was sent to the Senate, where it is scheduled to be considered in this morning’s floor session.
A comparable Senate Bill SB 1146 by Senator Jason Brodeur (R-Lake Mary) has gone through different amendments in recent weeks, including: 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; prohibiting 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; and defining “qualified private providers” for plan reviews and inspection services and requiring local jurisdictions reduce permit fees to reflect the cost savings of using such private providers. The Senate bill was further modified with clarifying amendments and passed the Rules Committee last Tuesday on a 10-6 vote and sent to the full Senate for consideration. One additional amendment that was included in the revamped bill places new restrictions on local governments in issuing building permits for the demolition or replacement of a dwelling in a flood risk zone. This past Thursday, the bill was tabled, in favor of consideration of the House’s bill (HB 401) instead this week. (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)
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)
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)
LMA Newsletter of 4-26-21