Posted on May 5, 2009 by Chip Merlin

Important Information If You Have a Florida Claim Pending With a Surplus Lines Carrier!

As I noted in a blog post last week, House Bill 853, legislation intended to exclude surplus lines insurance carriers from an entire Chapter of the Insurance Code, was poised to pass both chambers of the legislature -- with only the hope that time would run out before they could agree on the wording.

Unfortunately, the legislation passed without further changes to the wording and now will be sent to Governor Crist, who will sign or veto the bill.

The bill is sweeping in its scope, excluding surplus lines carriers from all of Chapter 627 of the Insurance Code. Items in Chapter 627 which will not apply to surplus lines carriers include:
 

  • The Valued Policy Law
  • Required availability of Replacement Cost and Law and Ordinance Coverage
  • Florida’s prompt payment statute -- 627.70131(5)(a)
  • Sinkhole coverage

An attorney in our office, Amy Boggs, noticed a sentence in the bill which is of immediate concern to anybody who has a claim pending with a surplus lines carrier:

“The amendments to s. 626.913, Florida Statutes, in this act….operate retroactively…except with respect to lawsuits that are filed on or before May 15, 2009.”

If you have a Florida claim pending that involves any coverage issues contained in Chapter 627, you should consult legal counsel to discuss whether filing suit no later than May 15th is appropriate in your case.
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Property Insurance Coverage Law Blog - May 6, 2009 12:42 PM
The Florida Consumer Action Network (FCAN) has urged Florida Governor Charlie Crist to veto recently passed legislation that would allow insurers to raise rates without approval by the Office of Insurance Regulation. FCAN is probably Florida’s la...
Comments (3) Read through and enter the discussion with the form at the end
shirley heflin - May 7, 2009 10:59 AM

Nothing like the government giving everyone - especially the little people w/o certain advantages - ADEQUATE TIME TO TAKE AND/OR INQUIRE AS TO WHAT STEPS SHOULD BE TAKEN REGARDING WHAT, IF ANY, RIGHTS ONE HAS (OR LOST) under this new "Bill."

Welcome to the Sunshine State.

SHIRLEY HEFLIN

shirley heflin - May 7, 2009 11:03 AM

Shouldn't everyone wait to see if Gov. Crist signs or vetoes the Bill or has he already signed it?

SHIRLEY HEFLIN

Chip Merlin - May 7, 2009 12:42 PM

Shirley,

The time frame is rediculous.

I thought there was a need to slightly alter the surplus lines statute for some time. The Florida
Supreme Court was right in its decision. This legislature does not understand the full complexity of the surplus issues and made a poor pronouncement in the law trying to remedy a very narrow concern of surplus lines carriers.

Now, surplus lines insurers are free from a number of consumer protection statutes which had nothing to do with the small "tweaking" of law which was needed.

Maybe I overspoke when I said this was anti-consumer because there was a need for some small change, but how it was drafted to exempt Surplus lines carriers from the entirety of Chap 627 as it did in its final form is far too overbroad.

I was surprised to be told the Office of Insurance Regulation supported this measure in the form it took and felt it was going to pass because there was little opposition.

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