Bill Text: FL S0122 | 2019 | Regular Session | Comm Sub


Bill Title: Insurance Assignment Agreements

Spectrum:

Status: (Introduced - Dead) 2019-04-23 - Laid on Table, companion bill(s) passed, see CS/CS/HB 7065 (Ch. 2019-57) [S0122 Detail]

Download: Florida-2019-S0122-Comm_Sub.html
       Florida Senate - 2019                CS for CS for CS for SB 122
       
       
        
       By the Committees on Rules; Judiciary; and Banking and
       Insurance; and Senators Broxson, Hooper, Simmons, and Stewart
       
       
       
       
       595-04573-19                                           2019122c3
    1                        A bill to be entitled                      
    2         An act relating to insurance assignment agreements;
    3         creating s. 627.7152, F.S.; providing definitions;
    4         providing requirements and limitations for property
    5         insurance assignment agreements; providing a burden of
    6         proof; providing that an assignment agreement does not
    7         affect managed repair arrangements under a property
    8         insurance policy; providing that an assignment
    9         agreement does not confer or create authority to
   10         adjust, negotiate, or settle a claim without
   11         authorization under part VI of chapter 626; providing
   12         that an acceptance by an assignee of an assignment
   13         agreement is a waiver by the assignee and its
   14         subcontractors of certain claims against an insured;
   15         specifying an insured’s payment obligations under an
   16         assignment agreement; requiring notice of intent to
   17         initiate litigation; specifying requirements for such
   18         notice; requiring a written response to the notice of
   19         intent to initiate litigation; specifying requirements
   20         for such response; providing for an award of
   21         reasonable attorney fees for certain claims arising
   22         under an assignment agreement; providing for an award
   23         of reasonable attorney fees following a voluntary
   24         dismissal under certain circumstances; requiring the
   25         court to stay proceedings under certain circumstances;
   26         directing the Office of Insurance Regulation to
   27         require insurers to report specified data; requiring
   28         the Financial Services Commission to adopt rules;
   29         providing applicability; creating s. 627.7153, F.S.;
   30         defining the term “assignment agreement”; authorizing
   31         insurers to make available property insurance policies
   32         restricting the assignment of post-loss benefits under
   33         certain conditions; requiring annual notice of
   34         coverage options; requiring a written or electronic
   35         waiver under certain circumstances; requiring the
   36         office to approve a waiver form; providing
   37         applicability; amending s. 627.422, F.S.; providing
   38         that residential or commercial property insurance
   39         policies may not prohibit the assignment of post-lost
   40         benefits; providing an exception; prohibiting Citizens
   41         Property Insurance Corporation from implementing rate
   42         changes for certain policies; providing an exception;
   43         requiring certain rate filings to include specified
   44         information; requiring the corporation to inform
   45         policyholders of certain information; providing
   46         severability; providing an effective date.
   47          
   48  Be It Enacted by the Legislature of the State of Florida:
   49  
   50         Section 1. Section 627.7152, Florida Statutes, is created
   51  to read:
   52         627.7152Assignment agreements.—
   53         (1)As used in this section, the term:
   54         (a)“Assignee” means a person who is assigned post-loss
   55  benefits through an assignment agreement.
   56         (b)“Assignment agreement” means any instrument by which
   57  post-loss benefits under a residential property insurance policy
   58  or commercial property insurance policy, as that term is defined
   59  in s. 627.0625(1), are assigned or transferred, or acquired in
   60  any manner, in whole or in part, to or from a person providing
   61  services to protect, repair, restore, or replace property or to
   62  mitigate against further damage to the property.
   63         (c)“Assignor” means a person who assigns post-loss
   64  benefits under a residential property insurance policy or
   65  commercial property insurance policy to another person through
   66  an assignment agreement.
   67         (d)“Disputed amount” means the difference between the
   68  assignee’s presuit settlement demand and the insurer’s presuit
   69  settlement offer.
   70         (e)“Judgment obtained” means damages recovered, if any,
   71  but does not include any amount awarded for attorney fees,
   72  costs, or interest.
   73         (f)“Presuit settlement demand” means the demand made by
   74  the assignee in the written notice of intent to initiate
   75  litigation as required by paragraph (9)(a).
   76         (g)“Presuit settlement offer” means the offer made by the
   77  insurer in its written response to the notice of intent to
   78  initiate litigation as required by paragraph (9)(b).
   79         (2)(a)An assignment agreement must:
   80         1.Be in writing and executed by and between the assignor
   81  and the assignee.
   82         2.Contain a provision that allows the assignor to rescind
   83  the assignment agreement without a penalty or fee by submitting
   84  a written notice of rescission signed by the assignor to the
   85  assignee within 14 days after the execution of the agreement, at
   86  least 30 days after the date work on the property is scheduled
   87  to commence if the assignee has not substantially performed, or
   88  at least 30 days after the execution of the agreement if the
   89  agreement does not contain a commencement date and the assignee
   90  has not begun substantial work on the property.
   91         3.Contain a provision requiring the assignee to provide a
   92  copy of the executed assignment agreement to the insurer within
   93  3 business days after the date on which the assignment agreement
   94  is executed or the date on which work begins, whichever is
   95  earlier. Delivery of the copy of the assignment agreement to the
   96  insurer may be made:
   97         a.By personal service, overnight delivery, or electronic
   98  transmission, with evidence of delivery in the form of a receipt
   99  or other paper or electronic acknowledgement by the insurer; or
  100         b.To the location designated for receipt of such
  101  agreements as specified in the policy.
  102         4.Contain a written, itemized, per-unit cost estimate of
  103  the services to be performed by the assignee.
  104         5.Relate only to work to be performed by the assignee for
  105  services to protect, repair, restore, or replace a dwelling or
  106  structure or to mitigate against further damage to such
  107  property.
  108         6.Contain the following notice in 18-point uppercase and
  109  boldfaced type:
  110  
  111  YOU ARE AGREEING TO GIVE UP CERTAIN RIGHTS YOU HAVE UNDER YOUR
  112  INSURANCE POLICY TO A THIRD PARTY, WHICH MAY RESULT IN
  113  LITIGATION AGAINST YOUR INSURER. PLEASE READ AND UNDERSTAND THIS
  114  DOCUMENT BEFORE SIGNING IT. YOU HAVE THE RIGHT TO CANCEL THIS
  115  AGREEMENT WITHOUT PENALTY WITHIN 14 DAYS AFTER THE DATE THIS
  116  AGREEMENT IS EXECUTED, AT LEAST 30 DAYS AFTER THE DATE WORK ON
  117  THE PROPERTY IS SCHEDULED TO COMMENCE IF THE ASSIGNEE HAS NOT
  118  SUBSTANTIALLY PERFORMED, OR AT LEAST 30 DAYS AFTER THE EXECUTION
  119  OF THE AGREEMENT IF THE AGREEMENT DOES NOT CONTAIN A
  120  COMMENCEMENT DATE AND THE ASSIGNEE HAS NOT BEGUN SUBSTANTIAL
  121  WORK ON THE PROPERTY. HOWEVER, YOU ARE OBLIGATED FOR PAYMENT OF
  122  ANY CONTRACTED WORK PERFORMED BEFORE THE AGREEMENT IS RESCINDED.
  123  THIS AGREEMENT DOES NOT CHANGE YOUR OBLIGATION TO PERFORM THE
  124  DUTIES REQUIRED UNDER YOUR PROPERTY INSURANCE POLICY.
  125  
  126         7.Contain a provision requiring the assignee to indemnify
  127  and hold harmless the assignor from all liabilities, damages,
  128  losses, and costs, including, but not limited to, attorney fees,
  129  should the policy subject to the assignment agreement prohibit,
  130  in whole or in part, the assignment of benefits.
  131         (b)An assignment agreement may not contain:
  132         1.A penalty or fee for rescission under subparagraph
  133  (a)2.;
  134         2.A check or mortgage processing fee;
  135         3.A penalty or fee for cancellation of the agreement; or
  136         4.An administrative fee.
  137         (c)If an assignor acts under an urgent or emergency
  138  circumstance to protect property from damage and executes an
  139  assignment agreement to protect, repair, restore, or replace
  140  property or to mitigate against further damage to the property,
  141  an assignee may not receive an assignment of post-loss benefits
  142  under a residential property insurance policy in excess of the
  143  greater of $3,000 or 1 percent of the Coverage A limit under
  144  such policy. For purposes of this paragraph, the term “urgent or
  145  emergency circumstance” means a situation in which a loss to
  146  property, if not addressed immediately, will result in
  147  additional damage until measures are completed to prevent such
  148  damage.
  149         (d)An assignment agreement that does not comply with this
  150  subsection is invalid and unenforceable.
  151         (3)In a claim arising under an assignment agreement, an
  152  assignee has the burden to demonstrate that the insurer is not
  153  prejudiced by the assignee’s failure to:
  154         (a)Maintain records of all services provided under the
  155  assignment agreement.
  156         (b)Cooperate with the insurer in the claim investigation.
  157         (c)Provide the insurer with requested records and
  158  documents related to the services provided, and permit the
  159  insurer to make copies of such records and documents.
  160         (d)Deliver a copy of the executed assignment agreement to
  161  the insurer within 3 business days after executing the
  162  assignment agreement or work has begun, whichever is earlier.
  163         (4)An assignee:
  164         (a)Must provide the assignor with accurate and up-to-date
  165  revised estimates of the scope of work to be performed as
  166  supplemental or additional repairs are required.
  167         (b)Must perform the work in accordance with accepted
  168  industry standards.
  169         (c)May not seek payment from the assignor exceeding the
  170  applicable deductible under the policy unless the assignor has
  171  chosen to have additional work performed at the assignor’s own
  172  expense.
  173         (d)Must, as a condition precedent to filing suit under the
  174  policy, and, if required by the insurer, submit to examinations
  175  under oath and recorded statements conducted by the insurer or
  176  the insurer’s representative that are reasonably necessary,
  177  based on the scope of the work and the complexity of the claim,
  178  which examinations and recorded statements must be limited to
  179  matters related to the services provided, the cost of the
  180  services, and the assignment agreement.
  181         (e)Must, as a condition precedent to filing suit under the
  182  policy, and, if required by the insurer, participate in
  183  appraisal or other alternative dispute resolution methods in
  184  accordance with the terms of the policy.
  185         (5)An assignment agreement and this section do not modify
  186  or eliminate any term, condition, or defense relating to any
  187  managed repair arrangement provided in the policy.
  188         (6)An assignment agreement does not transfer or create any
  189  authority to adjust, negotiate, or settle any portion of a claim
  190  to a person or entity not authorized to adjust, negotiate, or
  191  settle a claim on behalf of an assignor or a claimant under part
  192  VI of chapter 626.
  193         (7)(a)Notwithstanding any other provision of law, and
  194  except as provided in paragraph (b), acceptance by an assignee
  195  of an assignment agreement is a waiver by the assignee and its
  196  subcontractors of claims against a named insured for payments
  197  arising from the assignment agreement. The assignee and its
  198  subcontractors may not collect or attempt to collect money from
  199  an insured, maintain any action at law against an insured, claim
  200  a lien on the real property of an insured, or report an insured
  201  to a credit agency for payments arising from the assignment
  202  agreement. Such waiver remains in effect after the assignment
  203  agreement is rescinded by the assignor or after a determination
  204  that the assignment agreement is invalid.
  205         (b)A named insured is responsible for the payment of all
  206  of the following:
  207         1.Any deductible amount due under the policy.
  208         2.Any betterment ordered and performed that is approved by
  209  the named insured.
  210         3.Any contracted work performed before the assignment
  211  agreement is rescinded.
  212         (8)The assignee shall indemnify and hold harmless the
  213  assignor from all liabilities, damages, losses, and costs,
  214  including, but not limited to, attorney fees, should the policy
  215  subject to the assignment agreement prohibit, in whole or in
  216  part, the assignment of benefits.
  217         (9)(a)An assignee must provide the named insured, insurer,
  218  and the assignor, if not the named insured, with a written
  219  notice of intent to initiate litigation before filing suit under
  220  the policy. Such notice must be served by certified mail, return
  221  receipt requested, or electronic delivery at least 10 business
  222  days before filing suit, but may not be served before the
  223  insurer has made a determination of coverage under s. 627.70131.
  224  The notice must specify the damages in dispute, the amount
  225  claimed, and a presuit settlement demand. Concurrent with the
  226  notice, and as a precondition to filing suit, the assignee must
  227  provide the named insured, insurer, and the assignor, if not the
  228  named insured, a detailed written invoice or estimate of
  229  services, including itemized information on equipment,
  230  materials, and supplies; the number of labor hours; and, in the
  231  case of work performed, proof that the work has been performed
  232  in accordance with accepted industry standards.
  233         (b)An insurer must respond in writing to the notice within
  234  10 business days after receiving the notice specified in
  235  paragraph (a) by making a presuit settlement offer or requiring
  236  the assignee to participate in appraisal or other method of
  237  alternative dispute resolution under the policy. An insurer must
  238  have a procedure for the prompt investigation, review, and
  239  evaluation of the dispute stated in the notice and must
  240  investigate each claim contained in the notice in accordance
  241  with the Florida Insurance Code.
  242         (10)Notwithstanding any other provision of law, in a suit
  243  related to an assignment agreement for post-loss claims arising
  244  under a residential or commercial property insurance policy,
  245  attorney fees and costs may be recovered by an assignee only
  246  under s. 57.105 and this subsection.
  247         (a)If the difference between the judgment obtained by the
  248  assignee and the presuit settlement offer is:
  249         1.Less than 25 percent of the disputed amount, the insurer
  250  is entitled to an award of reasonable attorney fees.
  251         2.At least 25 percent but less than 50 percent of the
  252  disputed amount, no party is entitled to an award of attorney
  253  fees.
  254         3.At least 50 percent of the disputed amount, the assignee
  255  is entitled to an award of reasonable attorney fees.
  256         (b)If the insurer fails to inspect the property or provide
  257  written or oral authorization for repairs within 7 calendar days
  258  after the first notice of loss, the insurer waives its right to
  259  an award of attorney fees under this subsection. If the failure
  260  to inspect the property or provide written or oral authorization
  261  for repairs is the result of an event for which the Governor had
  262  declared a state of emergency under s. 252.36, factors beyond
  263  the control of the insurer which reasonably prevented an
  264  inspection or written or oral authorization for repairs, or the
  265  named insured’s failure or inability to allow an inspection of
  266  the property after a request by the insurer, the insurer does
  267  not waive its right to an award of attorney fees under this
  268  subsection.
  269         (c)If an assignee commences an action in any court of this
  270  state based upon or including the same claim against the same
  271  adverse party that such assignee has previously voluntarily
  272  dismissed in a court of this state, the court may order the
  273  assignee to pay the attorney fees and costs of the adverse party
  274  resulting from the action previously voluntarily dismissed. The
  275  court shall stay the proceedings in the subsequent action until
  276  the assignee has complied with the order.
  277         (11)This section does not apply to:
  278         (a)An assignment, transfer, or conveyance granted to a
  279  subsequent purchaser of the property with an insurable interest
  280  in the property following a loss;
  281         (b)A power of attorney under chapter 709 that grants to a
  282  management company, family member, guardian, or similarly
  283  situated person of an insured the authority to act on behalf of
  284  an insured as it relates to a property insurance claim; or
  285         (c)Liability coverage under a property insurance policy.
  286         (12)The office shall require each insurer to report by
  287  January 30, 2022, and each year thereafter data on each
  288  residential and commercial property insurance claim paid in the
  289  prior calendar year under an assignment agreement. The Financial
  290  Services Commission shall adopt by rule a list of the data
  291  required, which must include specific data about claims
  292  adjustment and settlement timeframes and trends, grouped by
  293  whether litigated or not litigated and by loss adjustment
  294  expenses.
  295         (13)This section applies to an assignment agreement
  296  executed on or after July 1, 2019.
  297         Section 2. Section 627.7153, Florida Statutes, is created
  298  to read:
  299         627.7153Policies restricting assignment of post-loss
  300  benefits under a property insurance policy.—
  301         (1)As used in this section, the term “assignment
  302  agreement” has the same meaning as provided in s. 627.7152.
  303         (2)An insurer may make available a policy that restricts
  304  in whole or in part an insured’s right to execute an assignment
  305  agreement only if all of the following conditions are met:
  306         (a)The insurer makes available to the insured or potential
  307  insured at the same time the same coverage under a policy that
  308  does not restrict the right to execute an assignment agreement.
  309         (b)Each restricted policy is available at a lower cost
  310  than the unrestricted policy.
  311         (c)The policy prohibiting assignment in whole is available
  312  at a lower cost than any policy prohibiting assignment in part.
  313         (d)Each restricted policy include on its face the
  314  following notice in 18-point uppercase and boldfaced type:
  315  
  316  THIS POLICY DOES NOT ALLOW THE UNRESTRICTED ASSIGNMENT OF POST
  317  LOSS INSURANCE BENEFITS. BY SELECTING THIS POLICY, YOU WAIVE
  318  YOUR RIGHT TO FREELY ASSIGN OR TRANSFER THE POST-LOSS PROPERTY
  319  INSURANCE BENEFITS AVAILABLE UNDER THIS POLICY TO A THIRD PARTY
  320  OR TO OTHERWISE FREELY ENTER INTO AN ASSIGNMENT AGREEMENT AS THE
  321  TERM IS DEFINED IN SECTION 627.7152 OF THE FLORIDA STATUTES.
  322  
  323         (3)The insurer shall notify the insured at least annually
  324  of the coverage options the insurer makes available under this
  325  section. Such notice must be part of and attached to the notice
  326  of premium.
  327         (4)A named insured must reject a fully assignable policy
  328  in writing or electronically. The rejection of a fully
  329  assignable policy shall be made on a form approved by the
  330  office. The form must state that the policy restricts the
  331  assignment of benefits. The heading of the form shall be in 18
  332  point uppercase and boldfaced type and state:
  333  
  334  YOU ARE ELECTING TO PURCHASE AN INSURANCE POLICY THAT RESTRICTS
  335  THE ASSIGNMENT OF BENEFITS UNDER THE POLICY IN WHOLE OR IN PART.
  336  PLEASE READ CAREFULLY.
  337  
  338         (5)This section applies to a policy issued or renewed on
  339  or after July 1, 2019.
  340         Section 3. Section 627.422, Florida Statutes, is amended to
  341  read:
  342         627.422 Assignment of policies or post-loss benefits.—A
  343  policy may be assignable, or not assignable, as provided by its
  344  terms. Any such assignment shall entitle the insurer to deal
  345  with the assignee as the owner or pledgee of the policy in
  346  accordance with the terms of the assignment, until the insurer
  347  has received at its home office written notice of termination of
  348  the assignment or pledge or written notice by or on behalf of
  349  some other person claiming some interest in the policy in
  350  conflict with the assignment.
  351         (1)LIFE OR HEALTH INSURANCE POLICIES.—Subject to its terms
  352  relating to assignability, any life or health insurance policy
  353  under the terms of which the beneficiary may be changed upon the
  354  sole request of the policyowner may be assigned either by pledge
  355  or transfer of title, by an assignment executed by the
  356  policyowner alone and delivered to the insurer, whether or not
  357  the pledgee or assignee is the insurer. Any such assignment
  358  shall entitle the insurer to deal with the assignee as the owner
  359  or pledgee of the policy in accordance with the terms of the
  360  assignment, until the insurer has received at its home office
  361  written notice of termination of the assignment or pledge or
  362  written notice by or on behalf of some other person claiming
  363  some interest in the policy in conflict with the assignment.
  364         (2)POST-LOSS BENEFITS UNDER CERTAIN PROPERTY INSURANCE
  365  POLICIES.—A residential or commercial property insurance policy
  366  may not prohibit the assignment of post-loss benefits unless it
  367  complies with s. 627.7153.
  368         Section 4. Citizens Property Insurance Corporation may not
  369  implement rate changes in 2019 for DP-3 and HO-3 policies unless
  370  the rate filing reflects projected rate savings from this act.
  371  Such rate filing must include an exhibit demonstrating the
  372  impact of this act on indicated rates for DP-3 and HO-3
  373  policies. Citizens Property Insurance Corporation shall provide
  374  policyholders with details on the projected rate savings from
  375  this act.
  376         Section 5. If any provision of this act or its application
  377  to any person or circumstance is held invalid, the invalidity
  378  does not affect the remaining provisions or applications of the
  379  act which can be given effect without the invalid provision or
  380  application, and to this end the provisions of this act are
  381  severable.
  382         Section 6. This act shall take effect July 1, 2019.

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