The Florida Legislature is currently in session. Therefore, we all must keep an eye out for changes that can affect policyholder rights and obligations. I have listed three bills below that merit attention (they each have Senate companions but I only focused on the House versions):
HB 947 – Property Insurance ()
General Bill by Plakon
Property Insurance: Provides that an insurer’s projected payout shall be treated as insurer’s coverage amount; revises application of provisions relating to claims based on state of emergency; revises factors considered by OIR when reviewing rate filings; provides that an insurer is not prohibited from using specified averages for rate filings; deletes certain residential property insurance filing requirements; revises private market reinsurance criteria; exempts certain personal lines residential structures & single condominium units from annual rate increases; limits eligibility for coverage by corporation for personal lines risk.
Effective Date: upon becoming a law
Key Changes: This bill appears to lessen ratemaking transparency and would make it easier to raise rates. In addition, it also exempts a personal lines residential structure that has a dwelling replacement cost of less than $900,000, or a single condominium unit that has a combined dwelling and contents replacement cost of less than $900,000 from the Citizens annual rate increases. I am still attempting to get clarification on this language but it appears to remove the rate increase cap for these policies. If that is the case, that would be very bad news for CPIC policyholders as their rates could jump more than the 10% allowed amount currently in place. I will update you when I get further clarification.
HB 669 – Assignment of Post-loss Insurance Policy Benefits
General Bill by Civil Justice Subcommittee and Insurance & Banking Subcommittee and Tobia
Assignment of Post-loss Insurance Policy Benefits: Provides that assignment or agreement that transfers authority to adjust, negotiate or settle claim is void; prohibits assignment of insurable interest except to subsequent purchasers after loss; authorizes insurance policy to prohibit assignment of post-loss benefits; provides exceptions.
Effective Date: July 1, 2015
Key Changes (underlined language would be added to statute):
(b) Any assignment or agreement that purports to transfer the authority to adjust, negotiate, or settle any portion of a claim to such contractor or subcontractor, or that is otherwise in derogation of this section, is void.
(4) Insurable interest does not survive an assignment, except to a subsequent purchaser of the property who acquires insurable interest following a loss.
(2) A property insurance policy may prohibit the post-loss assignment of rights, benefits, causes of action, or other contractual rights under the policy, except:
(a) An insured may assign the benefit of payment of no more than $3,000 to a person or entity providing services or materials to mitigate or repair damage directly arising from a covered loss. The assignment is limited solely to the ability to be named as a copayee for the benefit of payment for the reasonable value of services rendered and materials provided to mitigate or repair the damage. The insured may not assign the right to enforce payment of the post-loss benefits in the policy.
(b) For the purpose of compensating a public adjuster for services authorized by s. 626.854(11). The assignment may only be for compensation due to the public adjuster by the insured and not for the remainder of the benefits due to the insured under the policy. This paragraph does not affect any obligation of the insurer to issue the insured a check for payment in the name of the insured or mortgage holder.
(c) For payment of an attorney representing the insured, if the assignment provides that the benefits must be paid to the attorney representing the insured and that the attorney must disperse the funds to repair the property at the direction of the insured.
(3) Any post-loss assignment of rights, benefits, causes of action, or other contractual rights in contravention of this section renders the assignment void.
HB 491- Property Insurance Appraisal Umpires and Property Insurance Appraisers
General Bill by Insurance & Banking Subcommittee and Artiles
Property Insurance Appraisal Umpires and Property Insurance Appraisers: Creates property insurance appraisal umpire licensing program & property insurance appraiser licensing program within DBPR; authorizes department to establish fees; provides licensing & continuing education requirements; provides for fees; provides grounds for compulsory refusal, suspension, or revocation of license; provides ethical standards.
Effective Date: July 1, 2015
Key Changes: This bill imposes significant regulations on umpires and appraisers. I would recommend reading the entire bill or viewing the staff analysis here.