Significant Tort Reform Announced
Governor DeSantis sent a Valentine’s Day message to the Florida trial bar last week, announcing he wants to pick-up where the December special session on insurance market reforms left off, by eliminating one-way attorney fees in all lines of insurance – not just property insurance. The next day, Reps. Tommy Gregory (R-Lakewood Ranch) & Tom Fabricio (R-Miami-Dade) filed HB 837 (see Bill Watch list below) which would not only repeal the one-way attorney fee statute, but also end contingency fee multipliers, change the bad faith statute, and help defendants avoid paying damages when they are only partially at fault. The Governor said his goal is to “disincentive frivolous and costly lawsuits” against insurance companies and general businesses by the “cottage industry of litigation” in Florida.
“This will be probably the most significant legal reform that’s ever been done in the modern history of the state of Florida,” the Governor said at a news conference with Senate President Passidomo and House Speaker Renner. “We want people to be able to have their day in court if they’re harmed, but we don’t want cases that are fought where we know there’s no liability, but nevertheless it adds cost to the system.”
This past week, legislative committees focused on the Governor’s proposed $114.8 billion budget for the next fiscal year and various agency and department proposed budget allocations. The Governor’s budget includes $2 million for the Department of Financial Services to add 9 new positions to investigate fraud related to insolvent insurance companies and to establish another homeowners insurance fraud squad (to add to the 18 new fraud investigator positions authorized in the May 2022 special session).
The week before, the Florida Legislature held a special session, passing additional hurricane relief (see Legislature Boosts Hurricane Aid in this newsletter) to residents and local governments impacted by Hurricanes Ian and Nicole, along with bills on election law enforcement, illegal immigration, intercollegiate athletics, and special taxing districts, including Disney’s Reedy Creek Improvement District.
This week is the last of committee meeting weeks leading into the regular 60-day legislative session that begins on March 7. Here’s what we’ll be following:
Today, Feb. 20
The Senate Health Policy Committee will meet from 3-6pm where we’ll be watching SB 298 Telehealth Practice Standards
Tuesday, Feb. 21
The Senate Judiciary Committee will meet from 1-3pm where we’ll be watching SB 360 Causes of Action Based on Improvements to Real Property
The Senate Regulated Industries Committee will meet from 1-3pm where we’ll be watching SB 154 Condominium and Cooperative Associations
The Senate Banking and Insurance Committee will meet from 3:30-5:30pm where we’ll be watching SB 418 Insurance
Wednesday, Feb. 22
The Senate Appropriations Committee will meet from 3:30-5:30pm where we’ll be watching SB 102 Housing
Thursday, Feb. 23
The House Select Committee on Hurricane Resiliency & Recovery will meet from 2-5pm where we’ll be watching a Presentation by Dr. Wesley Brooks, Florida’s Chief Resiliency Officer
Friday, Feb. 24
The House Civil Justice Subcommittee will meet from 8am-noon where we’ll be watching HB 837 Civil Remedies
The past two weeks saw another flurry of new bills being filed in advance of the regular session. Here is a master list of the legislative bills we’re following so far. You can click the bill link in the list below to go directly to the bill and its details farther below. “New” and “Updated” bills are so noted. Updates within each bill are noted in blue font:
Insurance
Financial Services
Property Insurance Updated
Motor Vehicle Liability Policies Updated
Motor Vehicle Insurance Updated
Commercial Vehicle Insurance Updated
Post-lost Benefit Assignments Under Motor Vehicle Insurance Policies Updated
Civil Remedies New
Civil Remedies for Unlawful Employment Practices New
Contacting Consumer Debtors
Home Repairs and Solicitation Sales
Collateral Protection Insurance on Real Property New
Causes of Action Based on Improvements to Real Property Updated
Condominium and Cooperative Associations New
Flood Damage Prevention New
My Safe Florida Home Program New
Limitation of Actions Involving Real Estate Appraisers and Appraisal Management Companies Updated
Flood Disclosures for Real Property Sales Updated
Flood Zone Disclosures for Dwelling Units New
Implementation of the Recommendations of the Blue-Green Algae Task Force
Access to Pharmacies and Prescription Drugs Under Insurance and Pharmacy Benefit Managers Policies Updated
Health Insurance Cost Sharing
Telehealth Practice Standards Updated
Physician Certifications for the Medical Use of Marijuana Updated
General Insurance:
Insurance ̶ SB 312 by Senator Jay Collins (R-Tampa) revises restrictions on the use of genetic information for insurance purposes by life insurance and long-term care insurance companies. The bill specifies a restriction on and an authorized use of genetic information for insurance purposes by disability income carriers. It provides that certain restrictions against unfair discrimination or unlawful rebates do not include value-added products or services offered or provided by insurers or their agents if certain conditions are met. The bill has no House companion and is awaiting its first hearing in Senate Banking and Insurance. (Return to Top of List)
Financial Services ̶ HB 487 by Rep. Michelle Salzman (R-Cantonment) is the Department of Financial Services (DFS) annual omnibus bill which covers a myriad of topics under the jurisdiction of DFS, as well as the inner workings of the department itself. Some highlights include:
- References reinsurance, adjusters, insurance agents, bail bond agencies, and the Workers’ Comp Guaranty Association and the Worker’s Comp Health Care Provider Reimbursement Manual;
- Changes treatment of receiverships;
- Allows the DFS Division of Investigative and Forensic Services to initiate its own investigations (and not just conduct them);
- Gives the CFO (Jimmy Patronis)) several new powers, including the ability to remove members of boards and associations, including a reference to the Florida Association of Insurance Agents, with a focus on ethics;
- Adds a “misdemeanor directly related to the financial services business” for those who pled guilty or no contest as reason now for DFS to deny an application, suspend, revoke, or refuse to renew a license or appointment; and
- Adds to the grounds for DFS’s discretionary refusal, suspension, or revocation of license or appointment of sales representatives the “[f]ailure to report to the department within 30 days the final disposition of an administrative action taken against a salesperson by a governmental agency or other regulatory agency in this state or any other state or jurisdiction relating to the business of insurance, the sale of securities, or an activity involving fraud, dishonesty, trustworthiness, or breach of a fiduciary duty. The sales representative must submit a copy of the order, consent to order, or other relevant legal documents to the department.”
There is currently no Senate companion and the bill is awaiting its first hearing in the House Insurance and Banking Subcommittee. (Return to Top of List)
Property Insurance ̶ HB 505 and SB 418 by Rep. Kim Berfield (R-Clearwater) and Senator Keith Perry (R-Gainesville) revises requirements for residential property insurance rate filings. The bill authorizes insurance companies to file with OIR their personal lines rating plans relating to windstorm mitigation construction standards and allows premium discounts and credits on residential property lines for windstorm mitigation measures. The bill also revises the timeframe for notices from carriers to policyholders of automatic bank withdrawal increases, and revises requirements for notice of certain automobile policies. The bill also authorizes the state Division of Emergency Management Director to appoint a designee to serve on the Florida Commission on Hurricane Loss Projection Methodology. The house bill is awaiting its first hearing in the House Insurance and Banking Subcommittee. The Senate bill is on the Banking and Insurance Committee agenda for this Tuesday (2/21) at 3:30pm. (Return to Top of List)
Auto Insurance:
Motor Vehicle Liability Policies ̶ HB 57 by Rep. Keith Truenow (R-Tavares) revises the definition of “motor vehicle liability policy” to include certain policies issued by specified risk retention groups and further defines those groups as being “A”-rated and providing only commercial coverage for its members. The House bill was heard last Tuesday by the Insurance & Banking Subcommittee. Rep. Stevenson inquired about insolvency measures, but was informed that the companies affected by the bill have an incredibly high capital access and insolvency will likely never happen. The committee passed the bill unanimously and it now goes to the House Commerce Committee, its last stop before the full House. The Senate bill is awaiting its first hearing in the Senate Banking and Insurance Committee. (Return to Top of List)
Motor Vehicle Insurance ̶ HB 429 by Rep. Danny Alvarez (R-Brandon) is a perennial effort to do away with Personal Injury Protection (PIP) coverage under Florida’s No-Fault insurance law and replace it with bodily injury (BI) liability coverage. The primary difference between PIP and mandatory BI is that under PIP, someone injured in an auto accident seek coverage first under their own PIP policy, whereas under mandatory BI, someone injured in an auto accident would seek recovery from a responsible third-party’s (other driver’s) BI coverage. The House bill is currently awaiting its first hearing in the House Insurance and Banking Subcommittee. The recently filed Senate companion bill is awaiting its first hearing in the Senate Banking and Insurance Committee. (Return to Top of List)
Commercial Vehicle Insurance ̶ SB 434 by Senator Tom Wright (R-Port Orange) revises liability insurance requirements for movers’ commercial motor vehicles and revises additional liability insurance requirements for commercial motor vehicles, providing an exception and a requirement for wreckers. The bill currently has no House companion and has now been assigned and is awaiting its first hearing in the Senate Banking and Insurance Committee. (Return to Top of List)
Post-lost Benefit Assignments Under Motor Vehicle Insurance Policies ̶ HB 541 by Rep. Griff Griffitts (R-Panama City) would bar vehicle insurance policyholders from entering into Assignment of Benefits (AOB) contracts with repair shops. Specifically, it would prohibit policyholders from entering into such agreements starting with policies issued on or after July 1, 2023. “Any attempt by a policy owner to enter into such assignment agreement is void and unenforceable,” the legislation reads. The bill currently has no Senate companion and has now been assigned and is awaiting its first hearing in the House Insurance & Banking Subcommittee. (Return to Top of List)
Tort Reform:
(NEW) Civil Remedies ̶ HB 837 by Reps. Tommy Gregory (R-Lakewood Ranch) and Tom Fabricio (R-Miami-Dade) would limit damages, repeal statutes authorizing one-way attorney fees, end fee multipliers, and require the disclosure of letters of protection (LOPs). It would also require that evidence provided by plaintiffs in injury claims must be limited to the amount actually paid, regardless of the source of payment. The bill would also require that if a plaintiff is found to be more than 50% at fault, they cannot recover damages in a lawsuit. Additionally, the bill would end the attorney-client privilege on treating physicians for plaintiffs and would provide a safe harbor for insurers against bad-faith claims. The bill would add sections of law that say “negligence alone is insufficient to constitute bad faith” and that people who are insured and their representatives “have a duty to act in good faith in furnishing information regarding the claim, in making demands of the insurer, in setting deadlines, and in attempting to settle the claim.” The bill will be heard on Friday (2/24) in its first committee stop, the House Civil Justice Subcommittee, during a four-hour scheduled meeting beginning at 8am. There is no Senate companion bill yet, but Senate President Kathleen Passidomo (R-Naples) who has sponsored tort reform bills herself in past sessions, is committed to the effort. (Return to Top of List)
(NEW) Civil Remedies for Unlawful Employment Practices ̶ HB 315 and SB 738 by Rep. Alex Andrade (R-Pensacola) and Senator Jason Brodeur (R-Lake Mary) amends Section 760.11 of the Florida Statutes to provide limits on a judgment for punitive and compensatory damages for claims brought under the recently enacted Critical Race Theory (CRT) reforms. The bill allows judgment for the total amount of punitive damages awarded to an aggrieved party claiming CRT discrimination to be at least $50,000 and up to $1 million. The judgment for the total amount of compensatory damages awarded to the aggrieved person for mental anguish and loss of dignity must be the amount of the aggrieved person’s actual damages or three times the amount of his or her highest annual salary, whichever is greater. The total amount of recovery against the state and its agencies and subdivisions may not exceed the sovereign immunity limitations in statute. The right to trial by jury is preserved in any such private right of action in which the aggrieved person is seeking compensatory or punitive damages, and any party may demand a trial by jury. The Commission on Human Relations’ determination of reasonable cause is not admissible into evidence in any civil proceeding, including any hearing or trial, except to establish for the court the right to maintain the private right of action. A civil action brought under this section must be commenced no later than one year after the date of determination of reasonable cause by the commission. The commencement of such action divests the commission of jurisdiction of the complaint, except that the commission may intervene in the civil action as a matter of right. The House bill is awaiting its first hearing in the House Civil Justice Subcommittee, while the Senate bill is awaiting committee assignments. (Return to Top of List)
Consumer Protections:
Contacting Consumer Debtors ̶ SB 128 and HB 113 by Senator Ana Maria Rodriguez (R-Miami-Dade) and Rep. Alex Andrade (R-Pensacola) prohibits a creditor from contacting a consumer whose debt arose from documented elder and economic abuse or human trafficking. Those who violate that would be subject to the same sanctions as any other consumer debt collector. The bill also requires the state Office of Financial Regulation to inform and furnish relevant information to the appropriate regulatory body of the state, the Federal Government, or The Florida Bar if a person has been named in a certain consumer complaint alleging specified violations of law. It also authorizes debtors to bring civil actions against creditors who violate the act. We spend a lot of time trying to help the elderly, who are often victims of contractor fraud and/or unscrupulous attorneys. This is a helpful bill in combating additional abuse at the hands of such abusers. The two bills are similar and are awaiting first hearings before their respective insurance committees. (Return to Top of List)
Home Repairs and Solicitation Sales ̶ HB 419 by Rep. John Temple (R-The Villages) requires unlicensed vendors to take certain actions within a specified timeframe after receiving initial payment. The bill provides conditions under which such vendors do not have just cause, provides criminal penalties and guidelines for prosecuting violations, and revises exemption from permitting requirements for certain solicitors, salespersons, and agents. The bill currently has no Senate companion and is awaiting its first hearing in the House Regulatory Reform & Economic Development Subcommittee. (Return to Top of List)
(NEW) Collateral Protection Insurance on Real Property ̶ SB 410 and HB 793 by Senator Ileana Garcia (R-Miami) and Rep. Juan Fernandez-Barquin (R-Miami) creates a new section in Chapter 627 of the Florida Statutes, titled “Real Property Collateral Protection Insurance.” It establishes regulations for insurance companies and agents engaging in transactions involving collateral protection insurance (the so-called “lender-placed” or “force-placed” insurance) on real property, including manufactured and mobile homes. It defines terms, outlines the terms of policies, and provides calculations of coverages and premiums. It also prohibits certain practices, such as issuing collateral protection insurance if the insurer or insurance agent owns the real property; compensating a lender, investor, or servicer on collateral protection insurance policies; offering contingent commissions, profit-sharing, or other payments dependent on profitability or loss ratios to any person affiliated with a servicer or the insurer in connection with collateral protection insurance; and providing free or below-cost outsourced services to a lender, investor, or servicer. The bill also specifies the terms of the insurance policy, which must become effective no earlier than the date of lapse of insurance upon mortgaged real property, and must terminate on the earliest of certain dates. It also states that an insurance charge may not be made to a mortgagor for collateral protection insurance before the effective date of the insurance or for a term longer than the scheduled term of the insurance. The Senate bill is awaiting its first hearing in the Senate Banking and Insurance Committee, while the House bill is awaiting committee references. (Return to Top of List)
Disaster Recovery & Construction:
Causes of Action Based on Improvements to Real Property ̶ HB 85 by Rep. John Snyder (R-Stuart) reduces the statute of limitations to file an action founded on the design, planning, or construction of a property improvement and defines “material violation.” Such an action would have to be filed within four years, and in any event would need to be commenced within seven years rather than the current 10 years after a certificate of occupancy or completion is issued. Material violations would be those that have or likely will cause physical harm or significant damage to the performance of the building or its systems. Similar to a bill that didn’t pass in the 2022 session, the measure is meant to protect builders from frivolous lawsuits and help control rising liability insurance costs. The House bill was heard on February 7 by the House Regulatory Reform & Economic Development Subcommittee. Members engaged in many questions regarding this bill’s relationship to affordable housing and rising insurance costs, with Rep. Casello specifically asking how this bill can help making housing more affordable. Rep. Snyder replied that in addition to the rising costs of materials and inflation, the cost of insurance for builders has also gone up due to frivolous lawsuits, and that by cleaning up the statute, this will lower the cost of insurance and thus lower the cost of housing projects. The subcommittee approved the bill on a 14-1 vote and it is now awaiting its final committee hearing in the House Judiciary Committee. The recently filed Senate companion bill will have its first hearing before the Senate Judiciary Committee on Tuesday (2/21) at 1pm. (Return to Top of List)
(NEW) Condominium and Cooperative Associations ̶ SB 154 by Senator Jennifer Bradley (R-Fleming Island) makes several clarifying and technical changes to the requirements for Condominium and Cooperative Associations, including revising the circumstances under which community association managers or management firms must comply with the milestone inspection requirement passed in the May 2022 special session in SB 4-D. The bill clarifies that milestone inspections apply to buildings that are three stories tall or higher; revises the definition of the terms “milestone inspection” and “substantial structural deterioration”; authorizes local enforcement agencies to make certain determinations relating to milestone inspections after a building reaches a specified age; authorizes municipal governing bodies to adopt certain ordinances relating to association repairs; revises the types of policyholders not required to purchase flood insurance as a condition for maintaining certain policies issued by the Citizens Property Insurance Corporation; and revises condominium association reserve account requirements for structural integrity improvements. The bill currently has no House companion and is scheduled to be heard in the Senate Regulated Industries committee on Tuesday (2/21) at 1pm. (Return to Top of List)
(NEW) Flood Damage Prevention ̶ HB 859 by Rep. Fabian Basabe (R-North Bay Village) provides legislative findings that public and private investments in communities are important for economic growth, and that protecting structures from flooding is essential to maintaining resilient communities. The bill modifies freeboard requirements for certain buildings. (Freeboard is the additional height, usually expressed as a factor of safety in feet, above the base flood elevation in determining the level at which a structure’s lowest floor or the bottom of the lowest horizontal structural member must be elevated.) The bill also establishes maximum voluntary freeboard requirements for all new construction and substantial improvements to existing construction, and prohibits voluntary freeboard from being used in the calculation of the maximum allowable height for certain construction in applicable zoning districts. The bill requires the Florida Building Commission to develop and adopt minimum freeboard requirements by a specified date, and to review the freeboard requirements in the Florida Building Code every 5 years. The bill currently has no Senate companion and is awaiting committee assignments. (Return to Top of List)
(NEW) My Safe Florida Home Program ̶ HB 881 and SB 748 by Rep. Chip LaMarca (R-Lighthouse Point) and Senator Jim Boyd (R-Bradenton) amends the My Safe Florida Home Program by providing that licensed, rather than certified, inspectors are to provide hurricane mitigation inspections on site-built, single-family, residential properties that have been granted a homestead exemption. The bill also revises the information provided to homeowners as part of a hurricane mitigation inspection, revises the hurricane mitigation inspectors that may be selected by the Department of Financial Services to provide hurricane mitigation inspections, and deletes a provision requiring the department to implement a certain quality assurance program. Additionally, the bill revises the criteria for mitigation grant eligibility for homeowners; deletes a provision that subjects mitigation projects to random reinspection for a specified timeframe; revises the improvements for which mitigation grants may be used, including secondary water barriers for roofs; and revises the amount that low-income homeowners may receive from the department under the grant program. Both bills are awaiting committee assignments. (Return to Top of List)
Real Estate:
Limitation of Actions Involving Real Estate Appraisers and Appraisal Management Companies ̶ HB 213 by Rep. David Borrero (R-Miami-Dade) is another bill aimed at reducing frivolous litigation. With the exception of allegations of fraud, it requires any action against a real estate appraiser or appraisal management company that occurred prior to July 1, 2023 must be filed by July 1, 2024. Subsequent actions would need to similarly be filed within one year after the alleged act is discovered or should have been discovered, but in any event brought no more than four years after services were rendered. The House bill is awaiting its first hearing in the House Civil Justice Subcommittee, while there is now a Senate companion bill that is awaiting its first hearing in the Senate Judiciary Committee. (Return to Top of List)
Flood Disclosures for Real Property Sales ̶ SB 484 & HB 325 by Senator Jennifer Bradley (R-Fleming Island) & Rep. Susan Valdes (D-Tampa) would require people selling real estate to provide information to buyers about flooding. Under the bill, sellers would be required to disclose information such as whether the property has sustained flood damage; whether it is located in a designated flood-hazard zone; whether sellers have received federal assistance for flood damage; and whether flood damage insurance claims have been filed. The Senate bill is awaiting its first hearing in the Senate Judiciary Committee, while the House bill is pending its first hearing in the House Regulatory Reform & Economic Development Subcommittee. (Return to Top of List)
(NEW) Flood Zone Disclosures for Dwelling Units ̶ SB 716 by Senator Linda Stewart (D-Orlando) requires landlords or persons authorized to enter into rental agreements on behalf of landlords to make written disclosures to tenants before the commencement of a tenancy regarding whether the dwelling unit is located within a flood zone established by the Federal Emergency Management Agency. This disclosure must include the risk designation for the flood zone and definition of the designation. The bill currently has no House companion and is awaiting committee references. (Return to Top of List)
Environment:
Implementation of the Recommendations of the Blue-Green Algae Task Force ̶ HB 423 by Rep. Lindsay Cross (D-St. Petersburg) requires owners of certain onsite sewage treatment & disposal systems to have the systems inspected; requires DEP to administer the program; and requires estimated pollutant load reductions in basin management action plans to meet or exceed specified requirements. The bill revises requirements for allocation of such reductions, requires plans to provide & reevaluate certain mitigation strategies, and requires new or revised plans to list certain spatially focused projects. Finally, this legislation requires DEP to assess certain projects, and requires assessments to be included in plan updates. The bill is awaiting its first hearing in the House Water Quality, Supply & Treatment Subcommittee and has no Senate companion as of yet. (Return to Top of List)
Health Insurance:
Governor DeSantis released a legislative proposal of reforms January 12 on Pharmacy Benefit Managers (PBMs) that “will enhance transparency and reduce the influence of pharmacy middlemen, which will help consumers as well as our small pharmacies,” he said. This is a subject we have followed for years and picks up where the Florida Legislature left off in March 2022 with passage of HB 357 to increase oversight of PBMs, in part by giving the Office of Insurance Regulation (OIR) more authority over the companies. While there is speculation as to who will ultimately run this legislation, no official language has been filed.
Access to Pharmacies and Prescription Drugs Under Insurance and Pharmacy Benefit Managers Policies ̶ HB 203 by Rep. Karen Gonzalez Pittman (R-Hillsborough) addresses much of the Governor’s proposal. It requires OIR to examine PBMs to ascertain compliance with specified laws; requires PBMs to have standard contracts with pharmacies; prohibits PBMs from denying pharmacies & pharmacists the right to participate as contract providers; authorizes persons & entities to bring actions & injunctive relief; prohibits PBMs from engaging in acts against patients; and prohibits health insurers & PBMs from engaging in acts relating to covered clinician-administered drugs. The bill currently has no Senate companion and has now been assigned and is awaiting its first hearing in the House Healthcare Regulation Subcommittee. (Return to Top of List)
Health Insurance Cost Sharing ̶ SB 46 by Senator Tom Wright (R-Volusia) also addresses Pharmacy Benefit Managers (PBMs). It required specified individual health insurers and their PBMs to apply payments by or on behalf of insureds toward the total contributions of the insureds’ cost-sharing requirements. Similar requirements would be made on specified health insurance groups and in contracts with PBMs. The bill currently has no House companion and is awaiting its first hearing before the Senate Banking and Insurance Committee. (Return to Top of List)
Telehealth Practice Standards ̶ HB 267 and SB 298 by Rep. Tom Fabricio (R-Miramar) and Senator Jim Boyd (R-Bradenton) revises the definition of the term “telehealth” to strike the current prohibition on audio-only telephone calls. A similar bill reached an impasse in last year’s regular session over whether to strike the prohibition. The House bill is awaiting its first hearing in the Healthcare Regulation Subcommittee and the Senate bill is on the Health Policy Committee agenda for today (2/20) at 3pm. (Return to Top of List)
Physician Certifications for the Medical Use of Marijuana ̶ SB 344 & HB 387 by Sen. Jason Brodeur, (R-Sanford), and Rep. Spencer Roach, (R-North Fort Myers) would allow physicians to use telehealth to recertify medical-marijuana patients. Patients are required to receive in-person physical exams from physicians to get certified to use medical marijuana. Under current law, they also are required to be evaluated in person at least once every 30 weeks for recertification. This legislation would allow recertification to be done through telehealth, which generally involves using online technology to provide care remotely. The House bill is awaiting its first hearing in the House Healthcare Regulation Subcommittee, while the Senate bill has now been assigned and is awaiting its first hearing in the Senate Health Policy Committee. (Return to Top of List)
LMA Newsletter of 2-20-23
