Bill Text: FL S0178 | 2024 | Regular Session | Introduced
Bill Title: Resolution of Disputed Property Insurance Claims
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Failed) 2024-03-08 - Died in Banking and Insurance [S0178 Detail]
Download: Florida-2024-S0178-Introduced.html
Florida Senate - 2024 SB 178
By Senator Polsky
30-00023-24 2024178__
1 A bill to be entitled
2 An act relating to the resolution of disputed property
3 insurance claims; amending s. 627.7015, F.S.;
4 requiring, rather than authorizing, parties to a
5 property insurance claims dispute to participate in
6 mediation; providing that mediation is a condition
7 precedent to commencing litigation; deleting
8 provisions relating to the eligibility of claims for
9 mediation; providing that the parties may mutually
10 agree to conduct the mediation by teleconference or by
11 telephone; requiring all insureds, or a representative
12 thereof, to personally attend the mediation; revising
13 and specifying duties as to bearing certain costs of
14 mediation; requiring, rather than authorizing, the
15 Department of Financial Services to adopt certain
16 rules; authorizing the department to adopt certain
17 emergency rules; requiring the policyholder to provide
18 the insurer with certain documents within a certain
19 timeframe after mediation is invoked; revising
20 conditions under which a policyholder has a certain
21 timeframe to rescind a settlement; revising the
22 definition of the term “claim”; providing and revising
23 construction; amending s. 627.7074, F.S.; conforming a
24 provision to changes made by the act; providing an
25 appropriation; providing effective dates.
26
27 Be It Enacted by the Legislature of the State of Florida:
28
29 Section 1. Section 627.7015, Florida Statutes, is amended
30 to read:
31 627.7015 Mandatory mediation Alternative procedure for
32 resolution of disputed property insurance claims.—
33 (1) This section sets forth a nonadversarial alternative
34 dispute resolution procedure for a mediated claim resolution
35 conference prompted by the need for effective, fair, and timely
36 handling of property insurance claims. There is a particular
37 need for an informal, nonthreatening forum for helping parties
38 who elect this procedure to resolve their claims disputes
39 because most homeowner and commercial residential insurance
40 policies obligate policyholders to participate in a potentially
41 expensive and time-consuming adversarial appraisal process
42 before litigation. The procedure set forth in this section is
43 designed to bring the parties together for a mediated claims
44 settlement conference without any of the trappings or drawbacks
45 of an adversarial process. Before resorting to these procedures,
46 policyholders and insurers are encouraged to resolve claims as
47 quickly and fairly as possible. This section applies is
48 available with respect to claims under personal lines and
49 commercial residential policies before commencing the appraisal
50 process and is a condition precedent to, or before commencing
51 litigation. Mediation may be requested only by the policyholder,
52 as a first-party claimant, a third-party, as an assignee of the
53 policy benefits, or the insurer. However, an insurer is not
54 required to participate in any mediation requested by a third
55 party assignee of the policy benefits. If requested by the
56 policyholder, Participation by legal counsel is permitted.
57 Mediation under this section is also required of available to
58 litigants referred to the department by a county court or
59 circuit court. This section does not apply to commercial
60 coverages, to private passenger motor vehicle insurance
61 coverages, or to disputes relating to liability coverages in
62 policies of property insurance.
63 (2) At the time of issuance and renewal of a policy or at
64 the time a first-party claim within the scope of this section is
65 filed by the policyholder, the insurer shall notify the
66 policyholder of its right to participate in the mandatory
67 mediation program under this section. A claim becomes eligible
68 for mediation after the insurer complies with s. 627.70131(7) or
69 elects to reinspect pursuant to s. 627.70152(4)(a)3. If the
70 insurer has not complied with s. 627.70131(7) or elected to
71 reinspect pursuant to s. 627.70152(4)(a)3. within 90 days after
72 notice of the loss, the insurer may not require mediation under
73 this section. This subsection does not impair the right of an
74 insurance company to request mediation after a determination of
75 coverage pursuant to this section or require appraisal or
76 another method of alternative dispute resolution pursuant to s.
77 627.70152(4)(b). The department shall prepare a consumer
78 information pamphlet for distribution to persons participating
79 in mediation.
80 (3) If the parties mutually agree, mediation may be
81 conducted by teleconference or by telephone in lieu of appearing
82 in person. All named insureds, or a representative thereof, must
83 personally attend the mediation, regardless of how it is
84 conducted. The costs of mediation must be reasonable, and the
85 insurer must bear all of the cost of conducting mediation
86 conferences, except as otherwise provided in this section. If a
87 named insured or his or her representative policyholder fails to
88 appear at the conference, thus preventing the mediation from
89 proceeding, the conference must be rescheduled upon the
90 policyholder’s payment of the costs of a rescheduled conference.
91 If the insurer fails to appear at the conference, the insurer
92 must pay the policyholder’s actual cash expenses incurred in
93 attending the conference if the insurer’s failure to attend was
94 not due to a good cause acceptable to the department. An insurer
95 is will be deemed to have failed to appear if the insurer’s
96 representative lacks authority to settle the full value of the
97 claim. The insurer shall incur an additional fee for a
98 rescheduled conference necessitated by the insurer’s failure to
99 appear at a scheduled conference. The fees assessed by the
100 department must include a charge necessary to defray the
101 expenses of the department related to its duties under this
102 section and must be deposited in the Insurance Regulatory Trust
103 Fund. The department may suspend the insurer’s authority to
104 appoint licensees if the insurer does not timely pay the
105 required fees. If a party elects to request an expert or a
106 representative to attend the mediation, that party must bear any
107 costs for the attendance of the expert or representative.
108 (4) The department shall adopt by rule a property insurance
109 mediation program to be administered by the department or its
110 designee. The department shall may also adopt special rules that
111 which are applicable in cases of an emergency within this the
112 state, including emergency rules as necessary to establish
113 physical addresses for the mediation program in areas affected
114 by natural disasters. The rules shall be modeled after practices
115 and procedures set forth in mediation rules of procedure adopted
116 by the Supreme Court. The rules shall provide for:
117 (a) Reasonable requirements requirement for processing and
118 scheduling of requests for mediation.
119 (b) Qualifications and, denial of application, suspension,
120 revocation of approval, and other penalties for mediators as
121 provided in s. 627.745 and the Florida Rules for Certified and
122 Court-Appointed Mediators.
123 (c) Provisions governing who may attend mediation
124 conferences.
125 (d) Selection of mediators.
126 (e) Criteria for the conduct of mediation conferences.
127 (f) Right to legal counsel.
128 (5)(a) All statements made and documents produced at a
129 mediation conference shall be deemed to be settlement
130 negotiations in anticipation of litigation within the scope of
131 s. 90.408. All parties to the mediation must negotiate in good
132 faith and must have the authority to immediately settle the
133 claim. Mediators are deemed to be agents of the department and
134 shall have the immunity from suit provided in s. 44.107.
135 (b) Within 10 days after mediation is invoked, the
136 policyholder must provide to the insurer any supporting
137 documents and information that serve as the basis for the claim.
138 (6)(a) Mediation is nonbinding; however, if a written
139 settlement is reached and the policyholder is not represented by
140 an attorney or a public adjuster, the policyholder has 3
141 business days within which the policyholder may rescind the
142 settlement unless the policyholder has cashed or deposited any
143 check or draft disbursed to the policyholder for the disputed
144 matters as a result of the conference. If a settlement agreement
145 is reached and is not rescinded, it is binding and acts as a
146 release of all specific claims that were presented in that
147 mediation conference.
148 (b) At the conclusion of the mediation, the mediator shall
149 provide a written report of the results of mediation, including
150 any settlement amount, to the insurer, the policyholder, and the
151 policyholder’s representative if the policyholder is represented
152 at the mediation.
153 (7) If the insurer fails to comply with subsection (2) by
154 failing to notify a policyholder of its right to participate in
155 the mediation program under this section or if the insurer
156 requests the mediation, and the mediation results are rejected
157 by either party, the policyholder is not required to submit to
158 or participate in any contractual loss appraisal process of the
159 property loss damage as a precondition to legal action for
160 breach of contract against the insurer for its failure to pay
161 the policyholder’s claims covered by the policy.
162 (8) The department may designate an entity or person to
163 serve as administrator to carry out any of the provisions of
164 this section and may take this action by means of a written
165 contract or agreement.
166 (9) For purposes of this section, the term “claim” refers
167 to any dispute between an insurer and a policyholder relating to
168 a material issue of fact other than a dispute:
169 (a) With respect to which the insurer has a reasonable
170 basis to suspect fraud;
171 (b) When the insurer has determined, based on agreed-upon
172 facts as to the cause of loss, there is no coverage under the
173 policy;
174 (c) With respect to which the insurer has a reasonable
175 basis to believe that the policyholder has intentionally made a
176 material misrepresentation of fact which is relevant to the
177 claim, and the entire request for payment of a loss has been
178 denied on the basis of the material misrepresentation;
179 (d) With respect to which the amount in controversy is less
180 than $500, unless the parties agree to mediate a dispute
181 involving a lesser amount; or
182 (e) With respect to a loss that does not comply with s.
183 627.70132.
184 (10) Participation in mediation under this section before
185 the policyholder’s filing of a notice under s. 627.70152 does
186 not prohibit or waive an insurer’s right to invoke and
187 participate in mediation under this section in response to the
188 notice.
189 Section 2. Subsection (3) of section 627.7074, Florida
190 Statutes, is amended to read:
191 627.7074 Alternative procedure for resolution of disputed
192 sinkhole insurance claims.—
193 (3) If there is coverage available under the policy and the
194 claim was submitted within the timeframe provided in s.
195 627.706(5), following the receipt of the report provided under
196 s. 627.7073 or the denial of a claim for a sinkhole loss, the
197 insurer shall notify the policyholder of his or her right to
198 participate in the neutral evaluation program under this
199 section. Neutral evaluation supersedes the mediation alternative
200 dispute resolution process under s. 627.7015 but does not
201 invalidate the appraisal clause of the insurance policy. The
202 insurer shall provide to the policyholder the consumer
203 information pamphlet prepared by the department pursuant to
204 subsection (1) electronically or by United States mail.
205 Section 3. Effective July 1, 2024, for the 2024-2025 fiscal
206 year, the sum of $1 million in recurring funds is appropriated
207 from the Insurance Regulatory Trust Fund to the Department of
208 Financial Services for the purpose of administering the
209 amendment made by this act to s. 627.7015, Florida Statutes.
210 Section 4. Except as otherwise expressly provided in this
211 act and except for this section, which shall take effect July 1,
212 2024, this act shall take effect January 1, 2025.
