Meeting Packet — Commerce Committee (April 23, 2021)
Summary
Meeting packet for the Commerce Committee on Friday, April 23, 2021, at Webster Hall, with an agenda listing HB 317 Public Accountancy by Caruso and the proposed committee substitute PCS for CS/HB 305 – Insurance. The staff analysis of HB 317 states that the bill creates a "retired status" for active or inactive CPA licensees over 55 years old, has no fiscal impact on state or local governments, and has an effective date of July 1, 2021. The packet also includes amendments offered by Representative Rommel to PCS for CS/HB 305, among them one on admissibility of notice and response.
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“Meeting Packet — Commerce Committee (April 23, 2021).”
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Commerce Committee
Friday, April 23, 2021
8:00 AM - 9:30 AM
Webster Hall (212 Knott)
Meeting Packet
Chris Sprowls Blaise Ingoglia
Speaker Chair
The Florida House of Representatives
Commerce Committee
Chris Sprowls Blaise Ingoglia
Speaker Chair
Meeting Agenda
Friday, April 23, 2021
8:00 AM – 9:30 AM
Webster Hall (212 Knott)
I. Call to Order
II. Roll Call
III. Welcome and Opening Remarks
IV. Consideration of the following bill(s):
• HB 317 Public Accountancy by Caruso
Consideration of the following proposed committee substitute(s):
• PCS for CS/HB 305 – Insurance
V. Closing Remarks
VI. Adjournment
303 House Office Building, 402 South Monroe Street, Tallahassee, FL 32399-1300
(850) 717-4870
HB 317
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 317 Public Accountancy
SPONSOR(S): Caruso and others
TIED BILLS: IDEN./SIM. BILLS: CS/SB 616
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Regulatory Reform Subcommittee 16 Y, 0 N Wright Anstead
2) Commerce Committee Wright Hamon
SUMMARY ANALYSIS
In Florida, public accountancy is regulated by the Board of Accountancy under the Department of Business
and Professional Regulation. The practice of public accountancy includes offering to the public the
performance of services involving audits, reviews, compilations, tax preparation, management advisory or
consulting services, or preparation of financial statements. In order to practice public accountancy, a person
must be licensed as a certified public accountant (CPA).
Every biennium, CPAs must complete 80 hours of continuing professional education (CPE), by board rule. At
least 5 percent of the total hours required by the board must be in the subject of public accounting ethics.
Applicants for CPA licensure by endorsement must be of good moral character; complete certain CPE
requirements; and either not be licensed but have passed an equivalent examination in another state or
territory, or hold a license from another state or territory if the criteria issuance is equivalent to that of Florida.
Inactive status for CPA licenses can be initiated voluntarily by the licensee, or for failure to meet the CPE
license renewal requirements. The board is authorized to adopt rules establishing the minimum requirements
for placing a license on inactive status, renewing an inactive license, and reactivating the inactive license.
Currently, a retired status for CPA licensure does not exist.
The bill:
Clarifies the licensure by endorsement provision for applicants that have passed an examination but do
not hold a license in “another” state or territory, to instead not require a license in “any” state or territory;
Allows nonresidents seeking CPA license renewal to satisfy the CPE requirements (except for the
ethics component), with either the applicable CPE requirements in the state in which the applicant’s
office is located, or Florida CPE requirements, if the other state has no CPE license renewal
requirements;
Specifies that a “majority” of the total CPE hours required for ethics training must include a review of
certain provisions and related administrative rules; and
Creates a “retired status” for active or inactive CPA licensees over 55 years old;
The bill does not have a fiscal impact on state or local governments.
The bill has an effective date of July 1, 2021.
This document does not reflect the intent or official position of the bill sponsor or House of Representatives .
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FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Background
The Florida Board of Accounting (board) in the Department of Business and Professional Regulation
(DBPR) is the agency responsible for regulating and licensing more than 35,000 active and inactive
certified public accountants (CPA) and more than 5,400 accounting firms in Florida. The Division of
Certified Public Accounting provides administrative support to the 9-member board, which consists of 7
CPAs and 2 laypersons.1
To engage in the practice of public accounting, an individual or firm must be licensed and business
entities must meet certain formation requirements.2
The “practice of public accountancy” includes offering to the public the performance of services
involving audits, reviews, compilations, tax preparation, management advisory or consulting services,
or preparation of financial statements.3
The initial licensing fee for a CPA license is $50, and the biennial renewal fee is $105.4
A person may be charged with a first-degree misdemeanor if they are not a licensed CPA and they
perform:5
Services involving the expression of an opinion on financial statements,
The attestation as an expert in accountancy to the reliability or fairness of presentation of
financial information,
The utilization of any form of opinion or financial statements that provide a level of assurance,
The utilization of any form of disclaimer of opinion which conveys an assurance of reliability as
to matters not specifically disclaimed, or
The expression of an opinion on the reliability of an assertion by one party for the use by a third
party.
License by Endorsement
An applicant is eligible for licensure by endorsement if the applicant:6
is of good moral character;
has completed 80 hours of continuing professional education (CPE) if it has been at least 2
years since passing the licensing examination;7 and either:
o is not licensed, but has otherwise met the licensing requirements and has passed a
licensing examination that is substantially equivalent to the Florida examination; or
o holds a valid license to practice public accounting issued by another state or territory of
the United States, if the criteria for issuance of such license are substantially equivalent
to a Florida license or is otherwise permitted.
1 S. 473.303, F.S.
2 S. 473.302, F.S.
3 S. 473.302(8), F.S.
4 Email from Roger Scarborough, Director of the Division of Public Accounting, Florida Department of Business and Professional
Regulation, RE: CPAs (Feb. 8, 2021).
5 S. 473.322(1)(c), F.S.
6 S. 468.8414(3), (4), F.S.
7 R. 61H1-29.003, F.A.C.
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Continuing Education
CPAs are required to complete 80 hours8 of CPE in public accounting subjects every 2 years to renew
their license. The board has the authority to prescribe by rule additional CPE hours, not to exceed 25
percent of the total hours required, for failure to complete the hours required for renewal by the end of
the reestablishment period.9
At least 25 percent of the total hours required by the board must be in accounting-related and auditing-
related subjects, as distinguished from other subjects that include federal and local taxation matters
and management services.10
Five percent of the total hours required by the board must be in ethics applicable to the practice of
public accounting. This requirement must be administered by providers approved by the board and
include a review of the provisions of ch. 455, F.S., ch. 473, F.S., and the related administrative rules.11
Inactive Licenses
CPAs are authorized to request their license be placed on inactive status, or the licensee may be
placed on inactive status for failing to meet the CPE requirements for license renewal. The board is
authorized to adopt rules establishing the minimum requirements for placing a license on inactive
status, renewing an inactive license, and reactivating the inactive license.12
The fee for reactivating an inactive CPA license is $380.13 The maximum CPE requirements for
reactivating an inactive or delinquent license are 120 hours, including:
At least 30 hours in accounting-related and auditing-related subjects;
Not more than 30 hours in behavioral subjects; and
A minimum of 8 hours in ethics subjects approved by the board.
Retired Status
The American Institute of CPAs (AICPA) estimates that approximately 75 percent of its members will be
eligible to retire by the year 2020. According to AICPA, “many of these retirees are well respected
business leaders in their communities who would like to find ways to continue to be of service, without
necessarily remaining an active CPA in practice.”14
The AICPA provides a uniform retired CPA status in their model rules that states may adopt allowing
retired CPAs to offer a limited array of volunteer, uncompensated services to the public. Inactive CPAs,
of at least 55 years of age are allowed to refer to themselves as “Retired-CPAs” and register as such
with their state board of accountancy. They are able to participate in activities such as volunteer tax
preparation services, government-sponsored business mentoring programs, and on boards of nonprofit
organizations.15
8 S. 473.312(1)(a), F.S. allows the board to require between 48 and 80 hours of CPE every 2 years. The board requires 80 hours in r.
61H1-33.003, F.A.C.
9 S. 473.312(1)(a), F.S.
10 Id.
11 S. 473.312(1)(b),(c), F.S.
12 S. 473.313, F.S.
13 R. 61H1-31.006, F.A.C.
14 American Institute of Certified Public Accountants, https://www.aicpa.org/advocacy/state/retiredcpastatusexposuredraft.html.
15 Id.
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Effect of the Bill
The bill revises the CPA license by endorsement provision for applicants that have passed an
examination but do not hold a license in “another” state or territory. The bill simply changes “another”
state or territory to “any” state or territory.
The bill allows nonresident CPA licensees who are seeking renewal of a license in this state to satisfy
the CPE requirements (except for the ethics component), if the nonresident licensee has complied with
applicable CPE requirements in the state in which his or her office is located. If the state in which the
nonresident licensee's office is located has no CPE license renewal requirements, the nonresident
licensee must comply with Florida CPE requirements.
The bill specifies that a “majority” of the total CPE hours required for ethics training must include a
review of the provisions of ch. 455, F.S., ch. 473, F.S., and the related administrative rules. Currently,
no amount is specified.
The bill creates a “retired status” for CPA licensees. The bill defines a "retired licensee" as a licensee
whose license has been placed in retired status by the department.
Retired status license applicants are required to:
Be at least 55 years old;
Hold a current active or inactive CPA license;
Apply for the status to DBPR; and
Be in good standing and not the subject of any sanction or disciplinary action.
Applications must be prescribed by the board and the applicant must attest that they have no
association with accounting or any of the services described in s. 473.302(8)(a), (c), or (d), F.S.
Licensees granted retired status who reenter the workforce in a position that has an association with
accounting or any of the services described in s. 473.302(8)(a), (c), or (d), F.S., automatically lose the
retired status except for the uncompensated volunteer services that retirees are allowed to participate
in.
Licensees granted retired status are allowed to:
Serve without compensation on a board of directors or board of trustees;
Provide volunteer tax preparation services;
Participate in a government-sponsored business mentoring program such as the Internal
Revenue Service's Volunteer Income Tax Assistance program or the Small Business
Administration's SCORE program; and
Participate in an advisory role for a similar charitable, civic, or other nonprofit organization.
The board must require retired licensees to affirm in writing their understanding of the limited types of
activities allowed while in retired status and their professional duty to ensure competency to participate
in the activities.
Retired licensees are authorized to:
Accept routine reimbursement for actual costs of travel and meals associated with volunteer
services or de minimis per diem amounts paid to the licensee to cover such expenses as
allowed by law; and
Use the title of "retired CPA" on business cards, letterhead or other printed or electronic
documents as long as it is used in a manner that is not confusing to the public.
Retired licensees are not required to:
Have a certificate issued with the word "retired" on the certificate; or
Maintain the CPE requirements under s. 473.312, F.S.
Retired licensees are prohibited from offering or rendering professional services that require:
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The licensee’s signature; and
Use of the CPA title, regardless of whether the word "retired" is attached to such title.
Retired licensees may reactivate their license in a conditional manner determined by the board. The
conditions of reactivation must require the payment of fees and the completion of any CPE
requirements.
The bill has an effective date of July 1, 2021.
B. SECTION DIRECTORY:
Section 1 Amends s. 473.308, F.S., revising a requirement for obtaining a license by endorsement.
Section 2 Amends s. 473.311, F.S., providing license renewal requirements for nonresident
licensees.
Section 3 Amends s. 473.312, F.S., providing requirements for continuing education content.
Section 4 Amends s. 473.313, F.S., providing requirements for retired status licenses.
Section 5 Provides an effective date.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
Some out-of-state CPAs may need to complete less CPE in order to maintain a Florida CPA license.
D. FISCAL COMMENTS:
None.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not applicable. This bill does not appear to affect county or municipal governments.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
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The board will need to update rules regarding CPE and generate rules for retired status licenses. There
is sufficient rulemaking authority to do so.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/ COMMITTEE SUBSTITUTE CHANGES
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
HB 317 2021
1 A bill to be entitled
2 An act relating to public accountancy; amending s.
3 473.308, F.S.; requiring certain applicants to not be
4 licensed in any state or territory in order to be
5 licensed by endorsement; amending s. 473.311, F.S.;
6 providing license renewal requirements for nonresident
7 licensees; amending s. 473.312, F.S.; requiring that a
8 majority of the hours required for continuing
9 education include specific content; amending s.
10 473.313, F.S.; authorizing certain Florida certified
11 public accountants to apply to the Department of
12 Business and Professional Regulation to have their
13 license placed in a retired status; providing
14 requirements for such conversion; providing
15 requirements and prohibitions for retired licensees;
16 authorizing retired licensees to use a specified title
17 under certain circumstances; providing that retired
18 licensees are not required to maintain continuing
19 education requirements; authorizing retired licensees
20 to reactivate their licenses if certain conditions are
21 met; defining the term "retired licensee"; providing
22 an effective date.
23
24 Be It Enacted by the Legislature of the State of Florida:
25
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26 Section 1. Subsection (7) of section 473.308, Florida
27 Statutes, is amended to read:
28 473.308 Licensure.—
29 (7) The board shall certify as qualified for a license by
30 endorsement an applicant who:
31 (a) Is not licensed and has not been licensed in any
32 another state or territory and who has met the requirements of
33 this section for education, work experience, and good moral
34 character and has passed a national, regional, state, or
35 territorial licensing examination that is substantially
36 equivalent to the examination required by s. 473.306; or
37 (b)1. Holds a valid license to practice public accounting
38 issued by another state or territory of the United States, if
39 the criteria for issuance of such license were substantially
40 equivalent to the licensure criteria that existed in this state
41 at the time the license was issued;
42 2. Holds a valid license to practice public accounting
43 issued by another state or territory of the United States but
44 the criteria for issuance of such license did not meet the
45 requirements of subparagraph 1.; has met the requirements of
46 this section for education, work experience, and good moral
47 character; and has passed a national, regional, state, or
48 territorial licensing examination that is substantially
49 equivalent to the examination required by s. 473.306; or
50 3. Holds a valid license to practice public accounting
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51 issued by another state or territory of the United States for at
52 least 10 years before the date of application; has passed a
53 national, regional, state, or territorial licensing examination
54 that is substantially equivalent to the examination required by
55 s. 473.306; and has met the requirements of this section for
56 good moral character.
57 Section 2. Subsection (1) of section 473.311, Florida
58 Statutes, is amended to read:
59 473.311 Renewal of license.—
60 (1)(a) The department shall renew a license issued under
61 s. 473.308 upon receipt of the renewal application and fee and
62 upon certification by the board that the Florida certified
63 public accountant has satisfactorily completed the continuing
64 education requirements of s. 473.312.
65 (b) A nonresident licensee seeking renewal of a license in
66 this state is determined to have met the continuing education
67 requirements in s. 473.312, except for the requirements in s.
68 473.312(1)(c), if the licensee has complied with the continuing
69 education requirements applicable in the state in which his or
70 her office is located. If the state in which the nonresident
71 licensee's office is located has no continuing education
72 requirements for license renewals, the nonresident licensee must
73 comply with the continuing education requirements in s. 473.312.
74 Section 3. Paragraph (c) of subsection (1) of section
75 473.312, Florida Statutes, is amended to read:
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76 473.312 Continuing education.—
77 (1)
78 (c) Not less than 5 percent of the total hours required by
79 the board shall be in ethics applicable to the practice of
80 public accounting. This requirement shall be administered by
81 providers approved by the board and a majority of the hours
82 shall include a review of the provisions of chapter 455 and this
83 chapter and the related administrative rules.
84 Section 4. Section 473.313, Florida Statutes, is amended
85 to read:
86 473.313 Inactive status and retired status.—
87 (1) A Florida certified public accountant may request that
88 her or his license be placed in an inactive status by making
89 application to the department. The board may prescribe by rule
90 fees for placing a license on inactive status, renewal of
91 inactive status, and reactivation of an inactive license.
92 (a)(2) A license that has become inactive under this
93 subsection (1) or for failure to complete the requirements in s.
94 473.312 may be reactivated under s. 473.311 upon application to
95 the department. The board may prescribe by rule continuing
96 education requirements as a condition of reactivating a license.
97 The maximum continuing education requirements for reactivating a
98 license are 120 hours, including at least 30 hours in
99 accounting-related and auditing-related subjects, not more than
100 30 hours in behavioral subjects, and a minimum of 8 hours in
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101 ethics subjects approved by the board, for the reactivation of a
102 license that is inactive or delinquent.
103 (b)(3) A license that is delinquent for failure to report
104 completion of the requirements in s. 473.312 may be reactivated
105 under s. 473.311 upon application to the department.
106 Reactivation requires the payment of an application fee as
107 determined by the board and certification by the Florida
108 certified public accountant that the applicant satisfactorily
109 completed the continuing education requirements set forth under
110 s. 473.311. If the license is delinquent on January 1 because of
111 failure to report completed continuing education requirements,
112 the applicant must submit a complete application to the board by
113 March 15 immediately after the delinquent period.
114 (c)(4) Any Florida certified public accountant holding an
115 inactive license may be permitted to reactivate such license in
116 a conditional manner. The conditions of reactivation shall
117 require the payment of fees and the completion of required
118 continuing education.
119 (d)(5) Notwithstanding the provisions of s. 455.271, the
120 board may, at its discretion, reinstate the license of an
121 individual whose license has become null and void if the
122 individual has made a good faith effort to comply with this
123 section but has failed to comply because of illness or unusual
124 hardship. The individual shall apply to the board for
125 reinstatement in a manner prescribed by rules of the board and
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126 shall pay an application fee in an amount determined by rule of
127 the board. The board shall require that the individual meet all
128 continuing education requirements as provided in paragraph (a)
129 subsection (2), pay appropriate licensing fees, and otherwise be
130 eligible for renewal of licensure under this chapter.
131 (2) A Florida certified public accountant who is at least
132 55 years of age and currently holds an active or inactive
133 license under this chapter may apply to the department for her
134 or his license to be placed in retired status. The application
135 must be prescribed by the board and must state that the
136 applicant has no association with accounting or any of the
137 services described in s. 473.302(8)(a), (c), or (d). If a
138 licensee who has been granted retired status reenters the
139 workforce in a position that has an association with accounting
140 or any of the services described in s. 473.302(8)(a), (c), or
141 (d), the licensee automatically loses her or his retired status
142 except as provided in paragraph (a).
143 (a) A retired licensee who serves without compensation on
144 a board of directors or board of trustees, provides volunteer
145 tax preparation services, participates in a government-sponsored
146 business mentoring program such as the Internal Revenue
147 Service's Volunteer Income Tax Assistance program or the Small
148 Business Administration's SCORE program, or participates in an
149 advisory role for a similar charitable, civic, or other
150 nonprofit organization shall continue to be eligible for retired
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151 status.
152 (b) The board shall require a retired licensee to affirm
153 in writing her or his understanding of the limited types of
154 activities in which she or he may engage while in retired status
155 and that she or he has a professional duty to ensure that she or
156 he holds the professional competencies necessary to participate
157 in such activities.
158 (c) Licensees may convert their license to retired status
159 only if they hold a license in good standing and are not the
160 subject of any sanction or disciplinary action.
161 (d) A retired licensee may accept routine reimbursement
162 for actual costs of travel and meals associated with volunteer
163 services or de minimis per diem amounts paid to the licensee to
164 cover such expenses as allowed by law.
165 (e) A retired licensee may use the title of "retired CPA"
166 on any business card or letterhead or any other printed or
167 electronic document. However, such title must not be applied in
168 such a manner that could confuse the public as to the current
169 status of the licensee. The licensee is not required to have a
170 certificate issued with the word "retired" on the certificate.
171 (f) A retired licensee is not required to maintain the
172 continuing education requirements under s. 473.312.
173 (g) A retired licensee may not offer or render
174 professional services that require her or his signature and use
175 of the CPA title, regardless of whether the word "retired" is
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176 attached to such title.
177 (h) A retired licensee may reactivate her or his license
178 in a conditional manner determined by rule of the board. The
179 conditions of reactivation must require the payment of fees and
180 the completion of any required continuing education.
181
182 For the purposes of this subsection, the term "retired licensee"
183 means a licensee whose license has been placed in retired status
184 by the department.
185 Section 5. This act shall take effect July 1, 2021.
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COMMERCE COMMITTEE
HB 317 by Rep. Caruso
Public Accountancy
AMENDMENT SUMMARY
April 23, 2021
Amendment 1 by Rep. Caruso (line 84): Removes the retired status license process from the
bill.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 317 (2021)
Amendment No. 1
COMMITTEE/SUBCOMMITTEE ACTION
ADOPTED (Y/N)
ADOPTED AS AMENDED (Y/N)
ADOPTED W/O OBJECTION (Y/N)
FAILED TO ADOPT (Y/N)
WITHDRAWN (Y/N)
OTHER
1 Committee/Subcommittee hearing bill: Commerce Committee
2 Representative Caruso offered the following:
3
4 Amendment (with title amendment)
5 Remove lines 84-184
6
7 -----------------------------------------------------
8 T I T L E A M E N D M E N T
9 Remove lines 9-21 and insert:
10 education include specific content; providing
368909 - h317-line 84.docx
Published On: 4/22/2021 7:38:51 PM
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PCS for CS/HB 305
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: PCS for CS/HB 305 Insurance
SPONSOR(S): Commerce Committee
TIED BILLS: IDEN./SIM. BILLS:
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
Orig. Comm.: Commerce Committee Fortenberry Hamon
SUMMARY ANALYSIS
The bill makes several changes related to insurance:
• Residential property insurance claims for roof damage – Establishes contractors or unlicensed persons
acting on their behalf may not solicit or incentivize a residential property owner to file a roof damage insurance
claim. It also establishes that a public adjuster, a public adjuster apprentice, or unlicensed persons acting on
their behalf may not incentivize a residential property owner to file a roof damage insurance claim.
• Authority to examine managing general agents (MGAs) – Clarifies that the Office of Insurance Regulation
has the authority to examine MGAs, including insurers’ affiliates. Examination of affiliates will not extend to
passive investors who do not provide services for, or have relationships with, an insurer.
• Collection of property insurance claims litigation data by OIR – Establishes that each insurer or insurer
group doing business in Florida shall file specific data regarding litigation of personal and commercial residential
property insurance claims on with OIR an annual basis.
• Citizens Property Insurance Corporation (Citizens) – Makes several changes to the operations of, and
requirements for, Citizens, the state-run property insurer:
o Revises the eligibility for residential property owners to obtain coverage from Citizens so that they are
not eligible for Citizens’ coverage if they can obtain coverage from private insurers that is less than 20
percent greater than the premium for comparable coverage from Citizens.
o Establishes that Citizens’ may add 1 percent per year to its cap on rate increases until it reaches a
maximum of a 15 percent rate cap on increases in 2026.
o Establishes that if Citizens does not buy reinsurance to cover its projected 100-year probable maximum
loss, it must still include the cost of such reinsurance in its rate calculations.
o Establishes that Citizens must have budget allocations for employee salaries, raises for any individual
employee in excess of 10 percent, and an overall employee compensation plan approved by Citizens’
Board of Governors.
• Contingency risk multiplier – Provides threshold factors, at least one of which must be met, before a court
may consider whether to apply a contingency risk multiplier in rare and exceptional circumstances to attorney
fees for a suit arising under a property insurance policy.
• Actual cash value coverage disclosure – Establishes that when a policyholder accepts a residential property
insurance policy containing actual cash value coverage, the insurer must obtain written acceptance, provide the
policyholder with a disclosure regarding the coverage, and remind the policyholder of the availability of
replacement cost coverage at least once every three years.
• Notice of property insurance claims – Changes the notice of claim deadlines in the Insurance Code so that
notice of any property insurance claim must be provided to a property insurer within two years of the date of
loss.
• Presuit notice and demand – Creates new statutory requirements for residential or commercial property suits
that are not brought by an assignee, including a ten-day presuit notice and demand, before bringing suit against
an insurer. The bill also provides parameters regarding the recovery of attorney fees by claimants’ attorneys.
The bill has no impact on state or local government revenues or expenditures. It may have a positive direct
economic impact on the private sector.
The bill has an effective date of July 1, 2021.
This document does not reflect the intent or official position of the bill sponsor or House of Representatives.
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FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Residential Property Insurance Claims for Roof Damage
Background
The Florida Office of Insurance Regulation (OIR) has reported a significant increase in the number of
roof damage claims, many of which include litigation. 1 These roof damage claims include claims made
by residential property owners after being solicited to file an insurance claim that they may not
otherwise have filed but for the promise of a new roof at no cost to the property owner. 2
Effect of the Bill
The bill limits certain property insurance practices by contractors, public adjusters, public adjuster
apprentices, and those unlicensed persons acting on their behalf.
Contractors
The bill establishes that no contractor, including a general, building, residential, or roofing contractors,
or someone acting on the contractor’s behalf, may:
• Solicit a residential property owner to file an insurance claim.
• Offer an incentive to a residential property owner for allowing the inspection of the residential
property owner’s roof or for making an insurance claim for roof damage.
• Offer or accept any compensation or reward for referral of services for which property insurance
proceeds are payable.
• Interpret policy provisions, advise an insured about policy provisions, or adjust claims on behalf
of an insurer unless licensed as a public adjuster.
• Provide an insured with an agreement authorizing repairs without providing a good faith
estimate of the cost of repairs.
The bill establishes that a contractor may not enter into a contract with a residential property owner to
repair or replace a roof without including notice in the contract that the contractor is prohibited from
engaging in the above acts. If the contractor fails to include the notice in the contract, the property
owner may void the contract within 10 days of its execution.
Public Adjusters
The bill establishes that a public adjuster, public adjuster apprentice, or those acting on their behalf
may not:
• Offer an incentive to a residential property owner for allowing the inspection of the residential
property owner’s roof or for making an insurance claim for roof damage.
• Offer or receive compensation or a reward for referral of any services for which property
insurance proceeds would be used for roofing repairs or replacement.
Penalties
1 Report from David Altmaier, Florida Insurance Commissioner, to Chair Blaise Ingoglia, Commerce Committee, regarding cost drivers
affecting Florida’s insurance rates, p. 7 (Feb. 24, 2021).
2 Id. A “free” roof replacement may be achieved by giving a residential property owner whose policy provides for replacement cost
coverage for a roof a gift card or something else valued at the amount of the deductible under the policy so that the entire cost of a new
roof is paid by the insurer and the individual soliciting the residential property owner.
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The bill provides that any contractor, public adjuster, public adjuster apprentice, or unlicensed person
acting on their behalf may be subject to a fine of up to $10,000 per violation for each of the statutory
prohibitions established. Finally, the bill provides that any unlicensed person who engages in the
prohibited acts shall be guilty of unlicensed contracting or public adjusting, as applicable.
OIR – Authority to Examine Managing General Agents (MGAs)
Background
MGAs
Some insurance companies operate within a holding company system that includes an MGA. 3 An MGA
is a specialized type of insurance agent or broker that has underwriting authority from an insurer. 4
MGAs can perform certain functions that insurers typically handle, including binding coverage,
underwriting and pricing, agent appointments, and claims adjusting and settlement. 5 An MGA may be
an affiliate of an insurer. Section 624.10(1), F.S., defines an affiliate as an entity that exercises control
over or is directly or indirectly controlled by an insurer. Under current law, MGAs must enter into
contracts with insurers with which they do business unless the MGA is a controlled or controlling person
of the insurer (i.e., an affiliate). 6 These contracts must specify the division of responsibilities between
the insurer and the MGA. 7
Examination of Insurers and MGAs
OIR is responsible for examining the affairs, transactions, accounts, records, and assets of each insurer
that holds a certificate of authority to transact insurance business in Florida. 8 Examination authority
extends to the examination of MGAs 9 unless the MGA solely represents a single domestic insurer. 10
With certain exceptions, OIR must examine domestic insurers 11 at least once every five years and the
exam shall cover the preceding five fiscal years. 12
As part of the examination process, all persons being examined must make available to OIR the
accounts, records, documents, files, information, assets, and matters in their possession or control that
relate to the subject of the examination. 13 As part of an examination, OIR reviews contracts between
insurers and MGAs, so that it can determine how much an insurer is paying its MGA and what services
the insurer is receiving for the fee it pays. However, the lack of contracts between insurers and their
affiliate MGAs sometimes makes it difficult to determine how much the insurer is paying and what
services it is receiving from the MGA.
Effect of the Bill
The bill clarifies that OIR has the same authority to examine MGAs as it has to examine insurers,
whether or not an MGA is an affiliate of an insurer. This authority applies even if the MGA solely
3 See s. 628.801, F.S. An “insurance holding company system” consists of two or more affiliated persons, one or more of which is an
insurer. National Association of Insurance Commissioners, https://content.naic.org/sites/default/files/inline-files/MDL-440.pdf (last
visited Apr. 18, 2021).
4 IRMI, https://www.irmi.com/term/insurance-definitions/managing-general-agent (last visited Apr. 2, 2021).
5 Id.
6 S. 626.7451, F.S.
7 Id.
8 S. 624.316(1)(a), F.S.
9 Id.
10 S. 626.7452, F.S.
11 A domestic insurer is one formed under the laws of Florida. S. 624.06(1), F.S.
12 S. 624.316(2)(a), F.S. While s. 624.316(1)(a), F.S., clearly states that OIR may examine MGAs, because some MGAs are considered
affiliates of insurers, and s. 624.316(2)(a), F.S., does not specify that OIR may examine affiliates in the same way as insurers, OIR has
indicated that some MGAs have not been completely cooperative with the examination process.
13 S. 624.318(2), F.S.
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represents a single domestic insurer. The bill also requires each insurer paying an affiliate to produce
information regarding the fee paid to the affiliate upon request by OIR. OIR may determine whether the
fee an insurer pays to an affiliate is fair and reasonable and, in so doing, may consider the actual cost
of the services being provided in exchange for the fee. The bill establishes that all MGAs must execute
contracts with the insurers that they do business with, even if they are MGAs that control, or are
controlled by, an insurer. Further, the bill establishes that the scope of the examination of insurer’s
affiliates in a holding company system will be limited to information reasonably necessary to ascertain
an insurer’s financial condition. OIR’s examination of an insurer’s affiliate will not extend to the passive
investors of affiliates within the holding company system which do not provide services directly or
indirectly to the insurer or do not have direct or indirect relationships with the insurer unless reasonably
necessary.
Collection of Property Insurance Claims Litigation Data by OIR
Background
All insurers with a Florida certificate of authority to transact insurance business must file quarterly and
annual reports with OIR containing various financial data and actuarial opinions. 14 However, the law
does not currently specify that insurers must report data regarding the litigation of claims.
OIR recently conducted a data survey of property insurers to gather information regarding the litigation
of personal or commercial residential property insurance claims. 15 In response to this survey, several
insurers indicated that they could not provide OIR with answers to questions related to litigation trends
because they did not collect the requested data as part of their claims evaluation and adjusting
process. 16
Effect of the Bill
The bill establishes that beginning on January 1, 2022, each insurer or insurer group doing business in
Florida must provide specific pieces of data regarding litigation of personal and commercial residential
property insurance claims to OIR on an annual basis. This data includes, but is not limited to, the
following information on a per claim basis:
• Type of policy;
• Date, location, and type of loss;
• Name and type of vendors utilized for mitigation, repair, or replacement;
• Dates on which the claim was reported to the insurer, closed by the insurer, and reopened by
the insurer;
• Dates on which a supplemental claim was made;
• Whether the claimant had a public adjuster or an attorney;
• Total amounts that the insurer paid for indemnity, loss adjustment expenses, 17 and insured’s
attorney fees;
• Whether the insured’s attorney requested that a contingency risk multiplier (CRM) 18 be applied
to the attorney fees calculation and, if so, what CRM was applied.
If insurers collect and report this data, OIR and the Legislature should be able to more effectively
identify current and emerging property insurance litigation trends that may be affecting insurance
rates. 19
Citizens Property Insurance Corporation (Citizens)
14 S. 624.424, F.S.
15 Altmaier, supra, note 1, at 12.
16 Id.
17 Loss adjustment expenses are the costs associated with investigating and adjusting losses or insurance claims. IRMI,
https://www.irmi.com/term/insurance-definitions/loss-adjustment-expense (last visited Apr. 2, 2021).
18 A CRM is a multiplier applied to attorney fees that reflects the risk of attorneys accepting, on a contingency fee basis, cases that may
be difficult to win. See e.g., Joyce v. Federated Nat'l Ins. Co., 228 So. 3d 1122 (Fla. 2017).
19 Altmaier, supra, note 1, at 12.
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Citizens is a state-created, not-for-profit, tax-exempt government entity that is an integral part of the
state, whose public purpose is to provide property insurance to those unable to find affordable
coverage in the private market. 20
Eligibility and Rates
Background
New applicants are eligible for coverage from Citizens if no private carrier will write them a policy for a
premium that is less than 15 percent greater than what Citizens would offer them for comparable
coverage. 21 The rate cap, also known as the “glide path,” is not closing the gap between Citizens rates
and private market rates. Instead, because of the rate cap and the increasing rates of private property
insurance, the gap is growing and making Citizens more like a competitor to private insurers than an
insurer of last resort. Annual rate increases for existing Citizens’ policyholders are capped at no more
than 10 percent for any single policy. 22 It is unclear if, or how, the law allows OIR to approve a rate
reduction for Citizens.
Because Citizens’ rates are often well below those of private carriers, Citizens may be more
competitive than otherwise intended. Due to Citizens’ structure, its rates do not contain certain
elements that the rates of private insurers contain. Citizens does not pay taxes like private carriers do
and does not need to purchase as much reinsurance as private carriers do due to higher levels of
capital and surplus.
Current law also requires that Citizens make its best efforts to procure catastrophe reinsurance at
reasonable rates to cover its projected 100-year probable maximum loss. 23 Due to the high cost of
reinsurance over the recent years, Citizens has determined that it is not available at reasonable rates
and has not purchased it. This lack of purchase has contributed to its rates remaining more competitive
and more consumers being eligible for coverage from Citizens.
Effect of the Bill
The bill establishes that residential property owners are not eligible for coverage from Citizens if they
can obtain coverage from private insurers that is less than 20 percent greater than the premium for
comparable coverage from Citizens.
The bill also establishes that on or after January 1, 2022, Citizens must implement rate increases that
do not exceed the following percentages for any single policy that it issues:
• Eleven percent for 2022;
• Twelve percent for 2023;
• Thirteen percent for 2024;
• Fourteen percent for 2025;
• Fifteen percent for 2026 and all subsequent years.
The bill also clarifies that Citizens need not purchase catastrophe reinsurance to cover its projected
100-year probable maximum loss if it is not available at reasonable rates. However, Citizens must
include the cost of this reinsurance in its rate calculations even if it does not purchase the reinsurance.
20 S. 627.351(6)(a)1., F.S.
21 S. 627.351(6)(c)5.a., F.S.
22 S. 627.351(6)(n)6., F.S.
23 S. 627.351(6)(c)9., F.S. “Probable maximum loss” refers to the value that may be reasonably expected to be lost in a single casualty.
IRMI, https://www.irmi.com/term/insurance-definitions/probable-maximum-loss (last visited Apr. 2, 2021). If an insurer is buying
reinsurance to cover its 100-year probable maximum loss, it is purchasing reinsurance to cover the maximum loss that has a chance of
occurring once in 100 years.
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Salaries of Citizens’ Personnel
Background
Citizens operates pursuant to a plan of operation (plan) that is approved by the Financial Services
Commission (FSC). 24 Pursuant to the applicable statute, the plan may contain certain criteria regarding
Citizens’ employees. 25 Additionally, the applicable statute specifies that candidates for senior
management positions with Citizens must undergo background checks, that employees must attest
annually that they do not have any conflicts of interests with their employment, and that certain
employees of Citizens are subject to ethics disclosures. 26 However, neither the statute nor the plan
provide any parameters for the salaries that Citizens may pay its employees.
Effect of the Bill
The bill provides that Citizens’ Board of Governors must approve all of the following:
• Budget allocations for the compensation of all Citizens’ employees.
• Any proposed raise for an individual employee exceeding 10 percent of that employee’s current
salary.
• An overall employee compensation plan.
Attorney Fees Awarded in Property Insurance Litigation
Background
In certain situations, a court may require one party to pay the opposing party's attorney fees. The
traditional English Rule entitled a prevailing party to attorney fees as a matter of right. Florida, however,
with a majority of other U.S. jurisdictions, adopted the American Rule, under which each party is
responsible for its own attorney fees unless a statute provides an entitlement to fees.
A contingency fee is an attorney fee that is charged only if the lawsuit is successful or favorably settled
out of court. 27 An attorney and a client may enter into a contingency fee contract, agreeing that the
client will pay the attorney a fee only if the attorney successfully recovers for the client.
The Florida Supreme Court, through its Rules Regulating the Florida Bar, allows contingency fee
contracts but restricts their use. 28 Rule 4-1.5(f) prohibits contingency fees in criminal defense and
certain family law proceedings. 29 The rule also requires a contingency fee agreement to:
• Be in writing;
• State the method by which the fee is to be determined;
• State whether expenses are to be deducted before or after the contingency fee is calculated;
and
• In certain types of cases, include other provisions ensuring the client is aware of the
agreement's terms. 30
Upon conclusion of a contingency fee case, the attorney must provide the client with a written
statement stating the outcome of the case, the amount remitted to the client, and how the attorney
calculated the amount. 31
Statutorily Provided Attorney Fees
24 S 627.351(6)(a)2., F.S. The FSC is composed of the Governor, Attorney General, Chief Financial Officer, and Commissioner of
Agriculture. S. 20.121(3), F.S.
25 S. 627.351(6)(c)3., F.S.
26 S. 627.351(6)(d), F.S.
27 See Black's Law Dictionary 338 (8th ed. 2004).
28 R. Regulating Fla. Bar 4-1.5(f).
29 R. Regulating Fla. Bar 4-1.5(f)(3).
30 R. Regulating Fla. Bar 4-1.5(f)(1) and (4).
31 R. Regulating Fla. Bar 4-1.5(f)(1).
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Several state and federal statutes known as “fee-shifting statutes” state that a prevailing party in court
proceedings is entitled to reasonable attorney fees as a matter of right. 32 When a fee-shifting statute
applies, the court must determine and calculate what constitutes reasonable attorney fees.
Lodestar Approach
In Fla. Patient’s Comp. Fund v. Rowe, a 1985 case, the Florida Supreme Court held that courts should
calculate the amount of statutorily-authorized attorney fees using the "lodestar approach." 33 Applying
this approach requires the court to determine the number of hours reasonably expended on the case
and to determine a reasonable hourly rate for the attorney to have charged. Then the number of hours
reasonably expended, multiplied by the reasonable hourly rate, produces the "lodestar amount," which
is considered an objective basis for what the attorney fee amount should be.
Contingency Risk Multiplier
In certain cases, the court increases the attorney fees awarded by applying a contingency risk multiplier
(CRM) to the lodestar amount. 34 The concept of the CRM arose from judicial interpretations of statutory
authorization of attorney fees in particular cases, 35 but the Legislature also expressly provides for the
use of a CRM in certain cases. 36 In 1990, the Florida Supreme Court discussed three different types of
cases and whether a CRM should be applied in each case, as follows:
• Public policy enforcement cases. These cases may involve discrimination, environmental
issues, and consumer protection issues. In these cases, a CRM is usually inappropriate.
• Family law, eminent domain, estate, and trust cases. In these cases, a CRM is usually
inappropriate.
• Tort and contract claims, including insurance cases. In these cases, a CRM may be applied if
the plaintiff can demonstrate the following factors show a need for the multiplier:
o Whether the relevant market requires a CRM to obtain counsel;
o Whether the attorney can mitigate the risk of nonpayment; and
o Whether any other factors established in Rowe37 support the use of the multiplier. 38
Further, in the same decision, the Court noted that the size of the CRM varies from 1.0 to 2.5 based on
the likelihood of success at the outset of the case, as follows:
• 1.0 to 1.5, if the trial court determines that success was more likely than not at the outset;
32 See, e.g., s. 627.428, F.S., which is often referred to as the “one-way attorney fees statute” (providing that an insured who prevails
against an insurer is entitled to "a reasonable sum" of attorney fees); s. 501.2105, F.S. (providing that the prevailing party in an action
under the Florida Deceptive and Unfair Trade Practices Act (FDUTPA) is entitled to "a reasonable legal fee"); 42 U.S.C. s. 1988(b)
(providing that a prevailing party seeking to enforce specified civil rights statutes may recover "a reasonable attorney's fee").
33 Fla. Patient's Comp. Fund v. Rowe, 472 So. 2d 1145 (Fla. 1985).
34 The Court may also adjust the amount based on the results obtained by the attorney. Standard Guar. Ins. Co. v. Quanstrom, 555 So.
2d 828, 830-31 (Fla. 1990). CRMs are also referred to as contingency fee multipliers.
35 The rationale for using a CRM to increase an attorney fee award is that plaintiffs and plaintiffs' attorneys generally do not recover any
money unless they prevail. The attorney fee multiplier induces attorneys to take a risk on cases they might not otherwise take, allowing
would-be plaintiffs to find attorneys willing to represent them.
36 See s. 790.33(3)(f)1, F.S. (explicitly authorizing a contingency fee multiplier in certain cases relating to the preemption of firearm and
ammunition regulation).
37The Rowe factors were based upon Disciplinary Rule 2-106(b) of the Florida Bar (which is now Rule of Professional Conduct 4-1.5),
and were as follows:
• Time and labor required, novelty and difficulty of the question involved, and the skill and requisite to perform the legal
service properly.
• Likelihood, if apparent to the client, that the acceptance of employment would preclude other employment by the lawyer.
• Fee customarily charged in the locality for similar legal services.
• Amount involved and results obtained.
• Time limitations imposed by the client and circumstances.
• Nature and length of the professional relationship with the client.
• Experience, reputation, and ability of the lawyer(s) providing services.
• Whether the fee is a fixed or contingency fee.
Rowe, 472 So. 2d at 1150–1151.
38 Quanstrom, 555 So. 2d at 833-35.
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• 1.5 to 2.0, if the trial court determines that the likelihood of success was approximately even at
the outset;
• 2.0 to 2.5, if the trial court determines that success was unlikely at the outset. 39
Therefore, under current law, an attorney is more likely to receive a higher CRM—and thus a higher
attorney risk award—if he or she takes a case that at the outset seems unlikely to succeed.
Federal Court Treatment of the Contingency Risk Multiplier
Part of the Florida Supreme Court's rationale for adopting the CRM framework in 1985 was the
application of CRMs in federal courts. 40 However, in Burlington v. Dague, the U.S. Supreme Court
decided and rejected the use of a CRM under certain federal risk-shifting statutes. In that case the
Supreme Court signaled that it was closing the door on the CRM's use in most, if not all, federal
cases. 41
In Perdue v. Kenny A. ex. rel. Winn, a 2010 case involving a class action lawsuit filed on behalf of 3,000
children in the Georgia foster care system, the U.S. Supreme Court again addressed the CRM issue. 42
The plaintiffs argued in the underlying case that the foster care system in two counties was
constitutionally deficient. The case was mediated and the parties entered a consent decree resolving all
issues. Subsequently, the plaintiffs' attorneys sought attorney fees under 42 U.S.C. s. 1988. 43
The federal district court calculated the fees using the lodestar approach, arriving at a $6 million figure,
and then applied a 1.75 CRM, for a total attorney fee of $10.5 million. The district court justified the
CRM by finding that the attorneys had:
• Advanced $1.7 million with no ongoing reimbursement.
• Worked on a contingency basis, and therefore were not guaranteed payment.
• Displayed a high degree of skill, commitment, dedication, and professionalism.
• Achieved extraordinary results. 44
On review, the U.S. Supreme Court reversed the district court's calculation of attorney fees, remanding
the case because the district court did not provide adequate justification for the 75 percent increase.
The Court reiterated that "there is a strong presumption that the lodestar figure is reasonable," but that
such presumption "may be overcome in those rare circumstances in which the lodestar does not
adequately take into account a factor that may properly be considered in determining a reasonable
fee." 45 The Court also determined that a CRM may be applicable in “exceptional” circumstances. 46
The Court determined that the application of CRMs may sometimes be appropriate, while also issuing
several warnings about CRMs, as follows:
• When a trial court fails to give detailed explanations for why it applies a CRM, "widely disparate
awards may be made, and awards may be influenced . . . by a judge's subjective opinion
regarding particular attorneys or the importance of the case." 47
• "[U]njustified enhancements that serve only to enrich attorneys are not consistent" with the aims
of a statute that seek to compensate plaintiffs. 48
• In many cases, attorney fees "are not paid by the individuals responsible for the constitutional or
statutory violations on which the judgment is based . . . . Instead, the fees are paid . . . by state
and local taxpayers," resulting in a diversion of funds from other government programs. 49
39 Id. at 834.
40 See Rowe, 472 So. 2d at 1146 ("[W]e . . . adopt the federal lodestar approach for computing reasonable attorney fees").
41 See City of Burlington v. Dague, 112 S. Ct. 2638 (1992) ("Thus, enhancement for the contingency risk posed by each case would
encourage meritorious claims to be brought, but only at the social cost of indiscriminately encouraging nonmeritorious claims to be
brought as well . . . [W]e hold that enhancement for contingency is not permitted under the fee-shifting statutes at issue").
42 Perdue v. Kenny A. ex rel. Winn, 130 S. Ct. 1662 (2010).
43 42 U.S.C. s. 1988(b) allows the court to award attorney fees to the prevailing party in certain civil rights actions.
44 Perdue, 130 S. Ct. at 1670.
45 Id. at 1673 (emphasis added).
46 Id.
47 See id. at 1676.
48 See id.
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Recent Florida Supreme Court Treatment of the Contingency Risk Multiplier
In 2017, in the case of Joyce v. Federated Nat’l Ins. Co., the Florida Supreme Court rejected the U.S.
Supreme Court's Dague decision, instead holding that the CRM in Florida courts is not subject to the
"rare and exceptional circumstances" requirement. 50 The Court acknowledged that, based upon its
decision to maintain the applicability of the CRM without the restrictions implemented by the Dague
decision, Florida "separat[ed] from federal precedent in this area." 51
In Joyce, an elderly couple who sustained water damage to their home, filed a claim with their insurer,
who subsequently denied coverage on the basis of alleged material misrepresentations on the part of
the Joyces during their application for insurance. 52 The Joyces hired an attorney on a contingency fee
basis and sued their insurer, but eventually settled the case. 53 The parties agreed that the Joyces were
entitled to attorney fees and a fee hearing occurred in which the trial court applied a 2.0 CRM to the
lodestar attorney fee amount previously calculated. 54 The insurer appealed the case to the district
court of appeal, which affirmed the lodestar amount, but reversed the application of the CRM. 55 The
Joyces then appealed to the Florida Supreme Court, which accepted review and ruled in the Joyces’
favor. 56 In his dissent to the Joyce opinion, however, Justice Canady stated that the case “illustrates
the arbitrary results that can flow from application of the contingency risk multiplier….[which] have
previously been exposed.” 57
Attorney Fees Applicable to Property Insurance Litigation (“One-way Attorney Fees”)
Current Florida law provides that when a court issues a judgment against an insurer, and in favor of an
insured who is represented by an attorney, the court shall order that the insurer pay a reasonable
amount of attorney fees to an insured’s attorney. 58 This provision regarding attorney fees is applicable
to various insurance claim disputes, including property insurance claim disputes. 59
Effect of the Bill
Contingency Risk Multiplier
For property insurance litigation, the bill establishes that, upon a request by the insurer, a court may
consider applying a contingency risk multiplier only in rare and exceptional circumstances after making
a written finding that at least one of the following factors has been met:
• The type of property insurance claim in dispute is complex in nature and uncommon in
occurrence.
• The insurer has denied coverage for the claim.
• The insured cannot find competent counsel without a reasonable distance from the location of
the property that is the subject of the claim. Reasonable distance includes, at a minimum, the
counties contiguous to the county where that property is located.
49 See id. at 1677.
50 See Joyce v. Federated Nat'l Ins. Co., 228 So. 3d 1122 (Fla. 2017) ("[W]ith all due deference to the United States Supreme Court, we
do not accept the Dague majority's rationale for rejecting contingency fee multipliers").
51Id. at 1132.
52 Id. at 1123.
53 Id.
54 Id.
55 Id.
56 Id.
57 Id. at 1132.
58 S. 627.428, F.S.
59 Of note, the Florida legislature has expressly prohibited the use of contingency risk multipliers for personal injury protection cases.
See s. 627.736(8)(c), F.S.
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• The difference between the insurer’s initial offer and the insured’s initial demand for damages to
settle the loss was at least $5,000 or at least 15 percent of the difference, whichever is greater,
and the insured recovered more than the initial offer.
• The amount of damages that the insured recovered for the claim exceed the insurer’s initial offer
by at least 200 percent.
One-way Attorney Fees
The bill also modifies current one-way attorney fee statute for property insurance litigation as follows:
• If the difference between the judgment obtained by the claimant and the presuit settlement offer
by the insurer, excluding reasonable attorney fees and costs, is less than 20 percent of the
disputed amount, each party pays their own attorney fees and costs.
• If the difference between the judgment obtained by the claimant and the presuit settlement offer
by the insurer, excluding reasonable attorney fees and costs, is at least 20 percent but under 50
percent of the disputed amount, the insurer pays the claimant's attorney fees and costs equal to
the percentage of the disputed amount obtained times the total attorney fees and costs.
• If the difference between the judgment obtained by the claimant and the presuit settlement offer
by the insurer, excluding reasonable attorney fees and costs, is at least 50 percent of the
disputed amount, the insurer pays the claimant's full attorney fees and costs.
The bill defines the disputed amount as the difference between the claimant’s presuit settlement
demand, not including attorney fees and costs and the insurer’s presuit settlement offer, not including
attorney fees and costs.
Informed Acceptance of Actual Cash Value Coverage (ACV)
Background
Property insurance claims are adjusted on the basis of replacement cost or actual cash value (ACV),
depending on which type of coverage a policyholder purchased. When claims are adjusted on a
replacement cost basis, the insurer will pay for the entire cost of repair or replacement without a
reduction for depreciation. 60 However, when claims are adjusted on an ACV basis, the insurer pays
the policyholder the depreciated value of the property damage or loss that is being replaced or
repaired. 61 Property insurers must offer policyholders the option to purchase replacement cost
coverage for all portions of their property. 62 Concerns have arisen that policyholders who choose to
purchase property insurance policies that contain ACV coverage have not been adequately informed
about what they are giving up by not purchasing replacement cost coverage.
Effect of the Bill
The bill requires that an insurer issuing a homeowner’s policy or schedule providing actual cash value
coverage must:
• Provide a policyholder with a form that the policyholder must sign at initial policy or schedule
issuance, and must fully advise the policyholder of the nature of the coverage being accepted.
• Include with the policy or schedule at initial issuance and every renewal, a statement indicating
that ACV coverage may result in significant costs to the policyholder.
60 For example, if a roof is destroyed beyond repair, and a policyholder has replacement cost coverage, the insurer will pay to replace
the entire roof, minute the deductible, regardless of the age or condition of the roof at the time of the loss.
61 If a roof damage claim is adjusted on the basis of ACV rather than replacement cost, this would mean that the cost of replacing an
entire roof when the roof has been damaged beyond repair may not be covered. There is a concern that policies that contain ACV
coverage for roofs will not comply with the requirements of Fannie Mae and Freddie Mac, which require insurance to be placed at 100
percent replacement cost of the dwelling for homes that are in catastrophe areas. See Multifamily Selling and Servicing Guide,
(effective Feb. 4, 2019), at 272-273, https://multifamily.fanniemae.com/sites/g/files/koqyhd161/files/migrated-
files/content/guide/multifamily-selling-servicing-guide.pdf (last visited Mar. 13, 2021).
62 S. 627.7011, F.S.
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• At least once every 3 years, provide a policyholder with a reminder that replacement cost
coverage is available.
Notice of Property Insurance Claims
Background
Until 2011, the Florida Insurance Code (Code) 63 did not contain a time limit for giving notice of any type
of property insurance claim. Section 95.11, F.S., requires that actions on contracts be brought within
five years. Because an insurance policy is a contract, the five-year statute of limitations for contract
actions generally applied to claims under insurance policies. Since a claim must have been made
before a policyholder could sue for breach of contract, and a policyholder had five years to sue for
breach of contract, the claim must have been made within five years of the date of loss.
Section 627.70132, F.S., enacted in 2011, established that notice of any hurricane or windstorm claim,
supplemental claim, or reopened claim 64 under a property insurance policy must be provided to an
insurer within three years after the hurricane made landfall or the windstorm caused the covered
damage. Any claim for which notice is not given within the three-year timeframe is barred. 65 The three-
year time limit for providing notice of a hurricane or windstorm claim does not affect the five-year
statute of limitations for bringing suit under s. 95.11, F.S. 66 This means that while notice of a windstorm
or hurricane claim must be provided to an insurer within three years of the date of loss, suit may still be
brought for an additional two years past the notice deadline. 67 The time limit for notice of all other
property insurance claims besides hurricane and windstorm claims has remained equal to the five-year
statute of limitations because statutes do not specify otherwise.
Effect of the Bill
The bill changes the notice of claim deadlines in the Code so that notice of any property insurance
claim, including a claim made under a property insurance policy issued by an eligible surplus lines
insurer, must be provided to a property insurer within two years of the date of loss.
The bill redefines reopened and supplemental claims so that these terms have separate meanings. A
reopened claim is defined as a claim that an insurer has previously closed, but that has been reopened
upon an insured’s request for additional costs for loss or damage previously disclosed to the insurer. A
supplemental claim is defined as a claim for additional loss or damage from the same peril which the
insurer has previously adjusted that was discovered while completing repairs or replacement pursuant
to an open claim. The bill establishes that reopened claims are subject to the requirement that a
policyholder give notice of loss within two years after the date of loss, but supplemental claims are not
barred as long as notice is given to the insurer while the claim to which they are related remains open.
The bill establishes that, for the purposes of s. 627.70132, F.S., a claim that an insurer has closed
without providing an insured with the total amount due for the loss or damage is not considered a
closed claim. It also makes technical changes to the statute regarding alternative dispute resolution of
property insurance claims so that the changes to the notice of claim statute do not conflict with that
statute. 68
Presuit Notice and Demand Requirements for Property Insurance Claims
Background
63 The Florida Insurance Code is comprised of chapters 624-632, 634-636, 641, 642, 648, and 651, F.S.
64 S. 627.70132, F.S., defines both “supplemental claim” and “reopened claim” as “any additional claim for recovery from the insurer for
losses from the same hurricane or windstorm which the insurer has previously adjusted pursuant to the initial claim.” Because these
terms have the same definition, it is unclear why the statute uses both of them.
65 S. 627.70132, F.S.
66 Id.
67 Often, the type of suit that an insured brings against an insurer is a breach of contract suit based upon a denial of a claim.
68 S. 627.7015, F.S.
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Under existing law, within 90 days after a residential property insurer receives a notice of an initial,
reopened, or supplemental property insurance claim from a policyholder, the insurer must pay or deny
the claim or a portion of the claim, unless the failure to pay is due to circumstances beyond the
insurer’s control which reasonably prevent payment. 69 In some circumstances, a claimant will hire an
attorney and file suit against an insurer before the expiration of the allotted time for the insurer to pay or
deny a claim. In contrast, as a condition precedent to bringing a third-party cause of action to enforce
an assignment agreement against an insurer, the assignee must provide the name insured and the
assignor a written notice of intent to initiate litigation, delivered at least ten business days before filing
suit, but not before the insurer has made a determination of coverage. 70
Effect of the Bill
The bill creates a new statutory section which applies to all residential and commercial property suits
not brought by an assignee. Under that section, a claimant must:
• Cooperate with the insurer in the claim investigation.
• Provide the insurer with requested records and documents related to any services that have
been provided.
• Provide the insurer with estimates of the scope of work needing to be performed.
• Allow the insurer to inspect, photograph, or evaluate the property that is the subject of the claim.
As a condition precedent to filing suit under a property insurance policy, a claimant must provide the
Department of Financial Services (DFS) with a written notice of intent to initiate litigation on a form
provided by DFS at least 10 business days prior to filing suit, but not before the earlier of the expiration
of the 90-day period for the insurer to determine coverage or denial of coverage by the insurer. 71 DFS
will provide the insurer with the notice by delivering it to a designated email on file with DFS.
The notice of intent to initiate litigation must include insurer’s acts or omissions that give rise to the suit,
which may include a denial of coverage. If the notice is being provided to an insurer following a denial
of coverage, the notice must also include an estimate of damages, if known. If the notice is being
provided to an insurer following any other act or omission by the insurer, it must include both of the
following:
• A presuit settlement demand that must itemize damages, attorney fees, and costs.
• The disputed amount, which is defined as the difference between the claimant’s presuit
settlement demand, not including attorney fees and costs, and the insurer’s presuit settlement
offer, not including attorney fees and costs.
Pursuant to the bill, an insurer served with a presuit notice must respond to the notice in writing within
ten business days after receiving the notice. If an insurer is responding to a notice served on it following
a denial of coverage, the insurer must respond by: (1) accepting coverage; (2) denying coverage; or (3)
asserting the right to reinspect the damaged property. If an insurer responds by asserting the right to
reinspect the damaged property, it has 14 business days from the response asserting that right, to
reinspect the property and accept or continue to deny coverage. If the insurer continues to deny
coverage, the claimant may file suit without providing additional notice to the insurer.
If an insurer is responding to a notice served on it following any act or omission other than a coverage
denial, the insurer must respond by making a settlement offer or by requiring the claimant to participate
in appraisal or another form of alternative dispute resolution as provided for under the insurance policy.
The time limits for filing a suit under s. 95.11, F.S., are tolled during the ten-day period for the insurer to
respond to the presuit notice and while appraisal or alternative dispute resolution is ongoing. However,
if appraisal or alternative dispute resolution have not been concluded within 90 days after the expiration
of the ten-day notice of intent to initiate litigation, the claimant or claimant’s attorney may immediately
file suit without providing the insurer additional notice.
69 S. 627.70131, F.S. This statute is sometimes referred to as the “prompt pay” statute for property insurance claims.
70 An assignee is someone who receives policy rights through an assignment by a policyholder (assignor). IRMI,
https://www.irmi.com/term/insurance-definitions/assignee (last visited April 2, 2021). See s. 627.7152, F.S., for presuit requirements
placed on assignees.
71 S. 627.70131, F.S.
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The bill also requires that a court dismiss without prejudice any claimant’s suit relating to a claim for
which presuit notice is given if the suit is commenced before the expiration of the ten-day period for the
insurer to respond. If a court dismissed a claimant’s suit under these circumstances, the claimant’s
attorney is not entitled to an award of attorney fees for services rendered before the suit’s dismissal.
Finally, the bill:
• Establishes that presuit notice is admissible as evidence in a civil suit or an alternative dispute
resolution proceeding relating to the claim in which the notice is given;
• Provides that the presuit notice does not limit the evidence of attorney fees or costs, damages,
or loss, which may be offered at trial; and
• Provides that the presuit notice does not relieve the insured or an assignee of the burden of
providing any other notices required by law.
B. SECTION DIRECTORY:
Section 1. Creates s. 489.147, F.S., relating to prohibited property insurance practices.
Section 2. Amends s. 624.316, F.S., relating to examination of insurers.
Section 3. Amends s. 624.318, F.S., relating to conduct of examination or investigation; access to
records; correction of accounts; appraisals.
Section 4. Amends s. 624.424, F.S., relating to annual statement and other information.
Section 5. Amends s. 626.7451, F.S., relating to managing general agents; required contract
provisions.
Section 6. Amends s. 626.7452, F.S., relating to managing general agents; examination authority.
Section 7. Amends s. 626.854, F.S., relating to "public adjuster" defined; prohibitions.
Section 8. Amends s. 627.351, F.S., relating to insurance risk reapportionment plans.
Section 9. Amends s. 627.3518, F.S., relating to Citizens Property Insurance Corporation policyholder
eligibility clearinghouse program.
Section 10. Amends s. 627.428, F.S., relating to attorney fees.
Section 11. Amends s. 627.7011, relating to homeowners’ policies; offer of replacement cost coverage
and law and ordinance coverage.
Section 12. Amends s. 627.70132, F.S., relating to notice of windstorm or hurricane claim.
Section 13. Amends s. 627.7015, F.S., relating to alternative procedure for resolution of disputed
property insurance claims.
Section 14. Creates s. 627.70152, F.S., relating to suits arising under a property insurance policy.
Section 15. Amends s. 628.801, F.S., relating to insurance holding companies; registration; regulation.
Section 16. Provides an effective date of July 1, 2021.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
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None.
2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
To the extent the bill reduces property insurance rates and claims litigation, the bill may have a positive
indeterminate impact on the private sector.
D. FISCAL COMMENTS:
None.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not applicable. This bill does not appear to affect county or municipal governments.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
The bill requires no additional rulemaking authority for OIR or DFS. While the bill requires the adoption
of a form prescribed by the FSC on which insurers will report their property insurance claims litigation
data, the Florida Insurance Code contains existing authority for the promulgation of such forms by the
FSC. The bill also requires DFS to adopt a form for presuit notice. However, DFS has existing
authority for the promulgation of such forms, as well.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/ COMMITTEE SUBSTITUTE CHANGES
On March 23, 2021, the Insurance & Banking Subcommittee considered a proposed committee substitute
(PCS) along with one amendment to the committee substitute and reported the bill favorably as a committee
substitute. The PCS:
• Removed the contingency risk multiplier provision.
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• Removed the portion that clarified that that insurers are authorized to provide limited roof coverage in
personal lines residential property insurance policies by including a roof surface reimbursement
schedule.
• Clarified that OIR has the same authority to examine MGAs that it has to examine insurers.
• Established that each insurer or insurer group doing business in Florida must provide specific pieces of
data regarding litigation of personal and residential property insurance claims to OIR on a quarterly
basis.
• Modified certain rating and eligibility requirements for Citizens.
• Placed salary limits on Citizens’ employees.
• Added presuit notice requirements for all residential and commercial property suits not brought by an
assignee.
The amendment to the PCS made the following changes:
• Established that no contractor, including a general, building, residential, or roofing contractor, or
someone acting on the contractor’s behalf may:
o Solicit a residential property owner to file an insurance claim.
o Offer an incentive to a residential homeowner for allowing the inspection of the residential
property owner’s roof or for making an insurance claim for roof damage.
o Offer or accept any compensation or reward for referral of services for which property
insurance proceeds are payable.
o Interpret policy provisions, advise an insured about policy provisions, or adjust claims on behalf
of an insured unless licensed as a public adjuster.
o Provide an insured with an agreement authorizing repairs without providing a good faith
estimate of the cost of the repairs.
• Established that a contractor may not enter into a contract with a residential property owner to repair or
replace a roof without including notice that the contractor is prohibited from engaging in certain acts.
• Established that a public adjuster, public adjuster apprentice, or those acting on their behalf may not:
o Offer an incentive to a residential homeowner for allowing the inspection of the residential
property owner’s roof or for making an insurance claim for roof damage.
o Offer or receive any compensation or reward for referral of any services for which property
insurance proceeds would be used for roofing repairs or replacement.
• Provided that any contractor, public adjuster, public adjuster apprentice, or person acting on their
behalf may be subject to a fine of $10,000 per violation for each of the statutory prohibitions.
• Provided that any unlicensed person who engages in the prohibited acts shall be guilty of unlicensed
contracting or public adjusting, as applicable, and is subject to a fine of $10,000 per violation for each
of the statutory prohibitions.
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
PCS for CS/HB 305 ORIGINAL 2021
1 A bill to be entitled
2 An act relating to insurance; creating s. 489.147,
3 F.S.; providing definitions; prohibiting certain
4 practices by contractors; providing for disciplinary
5 proceedings; providing that the acts of any persons on
6 behalf of a contractor are considered the acts of a
7 contractor; providing that certain acts constitute
8 unlicensed contracting; providing penalties;
9 prohibiting a contractor from executing a contract
10 with a residential property owner for a roofing repair
11 or replacement unless certain notice is included;
12 authorizing the residential property owner to void the
13 contract within a specified timeframe when such notice
14 is not included; amending s. 624.316, F.S.;
15 authorizing the Office of Insurance Regulation to
16 examine insurer affiliates; amending s. 624.318, F.S.;
17 requiring insurer affiliates to provide certain items
18 and information to the office during examination or
19 investigation; amending s. 624.424, F.S.; requiring
20 property insurers, effective a certain date, to
21 include certain data regarding closed claims in their
22 annual reports to the office; requiring the office to
23 consider certain costs in determining whether payments
24 made by an insurer to an affiliate are fair and
25 reasonable; amending s. 626.7451, F.S; requiring
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26 managing general agents to enter into specified
27 contracts with insurers even when the managing general
28 agents control, or are controlled by, the insurers;
29 amending s. 626.7452, F.S.; providing that a managing
30 general agent may be examined as if it were the
31 insurer even if the managing general agent solely
32 represents a single domestic insurer; amending s.
33 626.854, F.S.; prohibiting certain acts by a public
34 adjuster, public adjuster apprentice, and certain
35 other persons; providing that certain acts constitute
36 unlicensed practice of public adjusting; providing
37 penalties; amending s. 627.351, F.S.; revising a
38 procedure that the plan of operation of Citizens
39 Property Insurance Corporation must provide; requiring
40 the corporation to include the costs of catastrophe
41 reinsurance to its projected 100-year probable maximum
42 loss in its rate calculations even if the corporation
43 does not purchase such reinsurance; deleting obsolete
44 language relating to the corporation's rate filings;
45 requiring the corporation to annually implement a rate
46 increase that does not exceed a certain percent for
47 specified years; requiring the corporation's budget
48 allocations for salaries for the corporation's
49 employees, all employee raises exceeding 10 percent,
50 and an employee compensation plan for the corporation
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51 to be approved by the corporation's board of
52 governors; amending s. 627.3518, F.S.; conforming a
53 cross-reference; amending s. 627.428,F.S.; providing
54 that, for an award of attorney fees for a claim under
55 a property insurance policy, the application of a
56 contingency risk multiplier may be considered only if
57 certain factors have been met; providing such factors;
58 amending s. 627.7011, F.S.; requiring written
59 acceptance of actual cash value coverage in a
60 homeowner's policy; requiring a specific statement in
61 a certain homeowner's policy; requiring notice of
62 availability of certain coverage in a homeowner's
63 policy; amending s. 627.70132, F.S.; revising the
64 definitions of the terms "supplemental claim" and
65 "reopened claim" to include all perils; providing that
66 claims and reopened claims under certain property
67 insurance policies for loss or damage caused by perils
68 are barred unless notice is given within a specified
69 timeframe; revising the timeframe for notice for loss
70 or damage caused by windstorm or hurricane; providing
71 date of loss for weather-related events; providing
72 circumstances under which supplemental claims are not
73 barred; providing construction; amending s. 627.7015,
74 F.S.; conforming a provision to changes made by the
75 act; creating s. 627.70152, F.S.; providing
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76 applicability; providing definitions; providing duties
77 of a claimant; requiring written notice to be provided
78 to an insurer before a suit is filed under an
79 insurance policy; requiring certain information to be
80 included in the notice; requiring notice to be served
81 within specified time limits; requiring an insurer to
82 provide a response to the notice within specified
83 timeframe; providing for tolling of time if
84 appropriate; requiring an insurer to investigate,
85 review, and evaluate a dispute stated in the notice;
86 requiring an insurer to investigate each claim in the
87 notice in accordance with the Florida Insurance Code;
88 requiring a court to dismiss without prejudice a
89 claimant's suit under certain circumstances; providing
90 for evidentiary requirements regarding the notice;
91 prohibiting a court from awarding attorney fees to a
92 claimant under certain circumstances; providing for
93 attorney fees in certain circumstances; amending s.
94 628.801, F.S.; authorizing the office to request
95 information from an insurer or its affiliates as
96 reasonably necessary; authorizing the office to obtain
97 staff to conduct examination at an insurer's expense;
98 requiring insurers to pay examination expenses; giving
99 the office the authority to examine all affiliates of
100 an insurer as reasonably necessary to ascertain the
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101 insurer's financial condition; prohibiting an
102 examination of an insurer's affiliate from extending
103 to specified investors under certain circumstances;
104 providing an effective date.
105
106 Be It Enacted by the Legislature of the State of Florida:
107
108 Section 1. Section 489.147, Florida Statutes, is created
109 to read:
110 489.147 Prohibited property insurance practices.—
111 (1) As used in this section, the term:
112 (a) "Prohibited advertisement" means any written or
113 electronic communication that encourages, instructs, or induces
114 a consumer to contact a contractor or public adjuster for the
115 purpose of making an insurance claim for roof damage. The term
116 includes, but is not limited to, door hangers, business cards,
117 magnets, flyers, pamphlets, and e-mails.
118 (b) "Soliciting" means contacting:
119 1. In person;
120 2. By electronic means, including, but not limited to, e-
121 mail, telephone, and any other real-time communication directed
122 to a specific person; or
123 3. By delivery to a specific person.
124 (2) A contractor may not directly or indirectly engage in
125 any of the following practices:
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126 (a) Soliciting a residential property owner by means of a
127 prohibited advertisement.
128 (b) Offering to a residential property owner a rebate,
129 gift, gift card, cash, coupon, waiver of any insurance
130 deductible, or any other thing of value in exchange for:
131 1. Allowing the contractor to conduct an inspection of the
132 residential property owner's roof; or
133 2. Making an insurance claim for damage to the residential
134 property owner's roof.
135 (c) Offering, delivering, receiving, or accepting any
136 compensation, inducement, or reward, for the referral of any
137 services for which property insurance proceeds are payable.
138 Payment by the residential property owner or insurance company
139 to a contractor for roofing services rendered does not
140 constitute compensation for a referral.
141 (d) Interpreting policy provisions or advising an insured
142 regarding coverages or duties under the insured's property
143 insurance policy or adjusting a property insurance claim on
144 behalf of the insured, unless the contractor holds a license as
145 a public adjuster pursuant to part VI of chapter 626.
146 (e) Providing an insured with an agreement authorizing
147 repairs without providing a good faith estimate of the itemized
148 and detailed cost of services and materials for repairs
149 undertaken pursuant to a property insurance claim. A contractor
150 does not violate this paragraph if, as a result of the process
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151 of the insurer adjusting a claim, the actual cost of repairs
152 differs from the initial estimate.
153 (3) A contractor who violates this section is subject to
154 disciplinary proceedings as set forth in s. 489.129. A
155 contractor may receive up to a $10,000 fine for each violation
156 of this section.
157 (4) For the purposes of this section:
158 (a) The acts of any person on behalf of a contractor,
159 including, but not limited to, the acts of a compensated
160 employee or a nonemployee who is compensated for soliciting,
161 shall be considered the actions of the contractor.
162 (b) An unlicensed person who engages in an act prohibited
163 by this section is guilty of unlicensed contracting and is
164 subject to the penalties set forth in s. 489.13. Notwithstanding
165 s. 489.13(3), an unlicensed person who violates this section may
166 be fined up to $10,000 for each violation.
167 (5) A contractor may not execute a contract with a
168 residential property owner to repair or replace a roof without
169 including a notice that the contractor may not engage in the
170 practices set forth in paragraph (2)(b). If the contractor fails
171 to include such notice, the residential property owner may void
172 the contract within 10 days after executing it.
173 Section 2. Paragraph (a) of subsection (2) of section
174 624.316, Florida Statutes, is amended to read:
175 624.316 Examination of insurers.—
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176 (2)(a) Except as provided in paragraph (f), the office may
177 examine each insurer, including affiliates, as often as may be
178 warranted for the protection of the policyholders and in the
179 public interest, and shall examine each domestic insurer not
180 less frequently than once every 5 years. The examination shall
181 cover the preceding 5 fiscal years of the insurer and shall be
182 commenced within 12 months after the end of the most recent
183 fiscal year being covered by the examination. The examination
184 may cover any period of the insurer's operations since the last
185 previous examination. The examination may include examination of
186 events subsequent to the end of the most recent fiscal year and
187 the events of any prior period that affect the present financial
188 condition of the insurer.
189 Section 3. Subsection (2) of section 624.318, Florida
190 Statutes, is amended to read:
191 624.318 Conduct of examination or investigation; access to
192 records; correction of accounts; appraisals.—
193 (2) Every person, including an affiliate, being examined
194 or investigated, and its officers, attorneys, employees, agents,
195 and representatives, shall make freely available to the
196 department or office or its examiners or investigators the
197 accounts, records, documents, files, information, assets, and
198 matters in their possession or control relating to the subject
199 of the examination or investigation. An agent who provides other
200 products or services or maintains customer information not
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201 related to insurance must maintain records relating to insurance
202 products and transactions separately if necessary to give the
203 department or office access to such records. If records relating
204 to the insurance transactions are maintained by an agent on
205 premises owned or operated by a third party, the agent and the
206 third party must provide access to the records by the department
207 or office.
208 Section 4. Subsection (11) of section 624.424, Florida
209 Statutes, is renumbered as subsection (12), and a new subsection
210 (11) and subsection (13) are added to that section, to read:
211 624.424 Annual statement and other information.—
212 (11) Beginning January 1, 2022, each authorized insurer or
213 insurer group issuing personal lines or commercial lines
214 residential property insurance policies in this state shall file
215 with the office on an annual basis in conjunction with the
216 statements required by paragraph (1)(a) a supplemental report on
217 an individual and group basis for closed claims. The report must
218 be on a form prescribed by the commission and must include the
219 following information for each claim closed, excluding liability
220 only claims, within the reporting period in this state:
221 (a) The unique claim identification number.
222 (b) The type of policy.
223 (c) The zip code of the property where the claim occurred.
224 (d) The county where the claim occurred.
225 (e) The date of loss.
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226 (f) The peril or type of loss, including information
227 about:
228 1. The types of vendors used for mitigation, repair, or
229 replacement; and
230 2. The names of vendors used, if known.
231 (g) The date the claim was reported to insurer.
232 (h) The initial date the claim was closed, including
233 information about whether the claim was closed with or without
234 payment.
235 (i) The date the claim was most recently reopened, if
236 applicable.
237 (j) The date a supplemental claim was filed, if
238 applicable.
239 (k) The date the claim was most recently closed, if
240 different from the initial date the claim was closed.
241 (l) The name of the public adjuster on the claim, if any.
242 (m) The Florida Bar number and name of the attorney for
243 the claimant, if any.
244 (n) The total indemnity paid by the insurer.
245 (o) The total loss adjustment expenses paid by the
246 insurer.
247 (p) The amount paid for claimant's attorney fees, if any.
248 (q) The amount paid in costs for claimant's attorney's
249 expenses, including, but not limited to, expert witness fees.
250 (r) The contingency fee multiplier, if any, that the
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251 claimant's attorney requested to be applied in calculating the
252 attorney fees awarded to the claimant's attorney.
253 (s) The contingency risk multiplier, if any, that a court
254 applied in calculating the attorney fees awarded to the
255 claimant's attorney.
256 (t) Any other information deemed necessary by the
257 commission to provide the office with the ability to track
258 litigation and claims trends occurring in the property market.
259 (13) Each insurer doing business in this state which pays
260 a fee, commission, or other financial consideration or payment
261 to any affiliate directly or indirectly is required upon request
262 to provide to the office any information the office deems
263 necessary. The fee, commission, or other financial consideration
264 or payment to any affiliate must be fair and reasonable. In
265 determining whether the fee, commission, or other financial
266 consideration or payment is fair and reasonable, the office
267 shall consider, among other things, the actual cost of the
268 service being provided.
269 Section 5. Subsection (6) of section 626.7451, Florida
270 Statutes, is amended to read:
271 626.7451 Managing general agents; required contract
272 provisions.—No person acting in the capacity of a managing
273 general agent shall place business with an insurer unless there
274 is in force a written contract between the parties which sets
275 forth the responsibility for a particular function, specifies
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276 the division of responsibilities, and contains the following
277 minimum provisions:
278 (6) The contract shall specify appropriate underwriting
279 guidelines, including:
280 (a) The maximum annual premium volume.
281 (b) The basis of the rates to be charged.
282 (c) The types of risks which may be written.
283 (d) Maximum limits of liability.
284 (e) Applicable exclusions.
285 (f) Territorial limitations.
286 (g) Policy cancellation provisions.
287 (h) The maximum policy period.
288
289 This subsection shall not apply when the managing general agent
290 is a controlled or controlling person.
291
292 For the purposes of this section and ss. 626.7453 and 626.7454,
293 the term "controlling person" or "controlling" has the meaning
294 set forth in s. 625.012(5)(b)1., and the term "controlled
295 person" or "controlled" has the meaning set forth in s.
296 625.012(5)(b)2.
297 Section 6. Section 626.7452, Florida Statutes, is amended
298 to read:
299 626.7452 Managing general agents; examination authority.—
300 The acts of the managing general agent are considered to be the
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301 acts of the insurer on whose behalf it is acting. A managing
302 general agent may be examined as if it were the insurer except
303 in the case where the managing general agent solely represents a
304 single domestic insurer.
305 Section 7. Subsection (15) is amended and subsection (20)
306 is added to section 626.854, Florida Statutes, to read:
307 626.854 "Public adjuster" defined; prohibitions.—The
308 legislature finds that it is necessary for the protection of the
309 public to regulate public insurance adjusters and to prevent the
310 unauthorized practice of law.
311 (15) A licensed contractor under part I of chapter 489, or
312 a subcontractor of such licensee, may not advertise, solicit,
313 offer to handle, handle, or perform public adjuster services as
314 provided in s. 626.854(1) adjust a claim on behalf of an insured
315 unless licensed and compliant as a public adjuster under this
316 chapter. The prohibition against solicitation does not preclude
317 a contractor from suggesting or otherwise recommending to a
318 consumer that the consumer consider contacting his or her
319 insurer to determine if the proposed repair is covered under the
320 consumer's insurance policy except as it relates to solicitation
321 prohibited in s. 489.147. In addition However, the contractor
322 may discuss or explain a bid for construction or repair of
323 covered property with the residential property owner who has
324 suffered loss or damage covered by a property insurance policy,
325 or the insurer of such property, if the contractor is doing so
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326 for the usual and customary fees applicable to the work to be
327 performed as stated in the contract between the contractor and
328 the insured.
329 (20)(a) Any following act by a public adjuster, a public
330 adjuster apprentice, or a person acting on behalf of a public
331 adjuster or public adjuster apprentice is prohibited and shall
332 result in discipline as applicable under part VI of this
333 chapter:
334 1. Offering to a residential property owner a rebate,
335 gift, gift card, cash, coupon, waiver of any insurance
336 deductible, or any other thing of value in exchange for:
337 a. Allowing a contractor, a public adjuster, a public
338 adjuster apprentice, or a person acting on behalf of a public
339 adjuster or public adjuster apprentice to conduct an inspection
340 of the residential property owner's roof; or
341 b. Making an insurance claim for damage to the residential
342 property owner's roof.
343 2. Offering, delivering, receiving, or accepting any
344 compensation, inducement, or reward for the referral of any
345 services for which property insurance proceeds would be used for
346 roofing repairs or replacement.
347 (b) Notwithstanding the fine set forth in s. 626.8698, a
348 public adjuster or public adjuster apprentice may be subject to
349 a fine not to exceed $10,000 per act for a violation of this
350 subsection.
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351 (c) A person who engages in an act prohibited by this
352 subsection and who is not a public adjuster or a public adjuster
353 apprentice, or is not otherwise exempt from licensure, is guilty
354 of the unlicensed practice of public adjusting and may be:
355 1. Subject to all applicable penalties set forth in part
356 VI of this chapter.
357 2. Notwithstanding subparagraph 1., subject to a fine not
358 to exceed $10,000 per act for a violation of this subsection.
359 Section 8. Paragraphs (c) and (n) of subsection (6) of
360 section 627.351, Florida Statutes, are amended, and paragraph
361 (jj) is added to subsection (6) of that section, to read:
362 627.351 Insurance risk apportionment plans.—
363 (6) CITIZENS PROPERTY INSURANCE CORPORATION.—
364 (c) The corporation's plan of operation:
365 1. Must provide for adoption of residential property and
366 casualty insurance policy forms and commercial residential and
367 nonresidential property insurance forms, which must be approved
368 by the office before use. The corporation shall adopt the
369 following policy forms:
370 a. Standard personal lines policy forms that are
371 comprehensive multiperil policies providing full coverage of a
372 residential property equivalent to the coverage provided in the
373 private insurance market under an HO-3, HO-4, or HO-6 policy.
374 b. Basic personal lines policy forms that are policies
375 similar to an HO-8 policy or a dwelling fire policy that provide
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376 coverage meeting the requirements of the secondary mortgage
377 market, but which is more limited than the coverage under a
378 standard policy.
379 c. Commercial lines residential and nonresidential policy
380 forms that are generally similar to the basic perils of full
381 coverage obtainable for commercial residential structures and
382 commercial nonresidential structures in the admitted voluntary
383 market.
384 d. Personal lines and commercial lines residential
385 property insurance forms that cover the peril of wind only. The
386 forms are applicable only to residential properties located in
387 areas eligible for coverage under the coastal account referred
388 to in sub-subparagraph (b)2.a.
389 e. Commercial lines nonresidential property insurance
390 forms that cover the peril of wind only. The forms are
391 applicable only to nonresidential properties located in areas
392 eligible for coverage under the coastal account referred to in
393 sub-subparagraph (b)2.a.
394 f. The corporation may adopt variations of the policy
395 forms listed in sub-subparagraphs a.-e. which contain more
396 restrictive coverage.
397 g. Effective January 1, 2013, the corporation shall offer
398 a basic personal lines policy similar to an HO-8 policy with
399 dwelling repair based on common construction materials and
400 methods.
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401 2. Must provide that the corporation adopt a program in
402 which the corporation and authorized insurers enter into quota
403 share primary insurance agreements for hurricane coverage, as
404 defined in s. 627.4025(2)(a), for eligible risks, and adopt
405 property insurance forms for eligible risks which cover the
406 peril of wind only.
407 a. As used in this subsection, the term:
408 (I) "Quota share primary insurance" means an arrangement
409 in which the primary hurricane coverage of an eligible risk is
410 provided in specified percentages by the corporation and an
411 authorized insurer. The corporation and authorized insurer are
412 each solely responsible for a specified percentage of hurricane
413 coverage of an eligible risk as set forth in a quota share
414 primary insurance agreement between the corporation and an
415 authorized insurer and the insurance contract. The
416 responsibility of the corporation or authorized insurer to pay
417 its specified percentage of hurricane losses of an eligible
418 risk, as set forth in the agreement, may not be altered by the
419 inability of the other party to pay its specified percentage of
420 losses. Eligible risks that are provided hurricane coverage
421 through a quota share primary insurance arrangement must be
422 provided policy forms that set forth the obligations of the
423 corporation and authorized insurer under the arrangement,
424 clearly specify the percentages of quota share primary insurance
425 provided by the corporation and authorized insurer, and
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426 conspicuously and clearly state that the authorized insurer and
427 the corporation may not be held responsible beyond their
428 specified percentage of coverage of hurricane losses.
429 (II) "Eligible risks" means personal lines residential and
430 commercial lines residential risks that meet the underwriting
431 criteria of the corporation and are located in areas that were
432 eligible for coverage by the Florida Windstorm Underwriting
433 Association on January 1, 2002.
434 b. The corporation may enter into quota share primary
435 insurance agreements with authorized insurers at corporation
436 coverage levels of 90 percent and 50 percent.
437 c. If the corporation determines that additional coverage
438 levels are necessary to maximize participation in quota share
439 primary insurance agreements by authorized insurers, the
440 corporation may establish additional coverage levels. However,
441 the corporation's quota share primary insurance coverage level
442 may not exceed 90 percent.
443 d. Any quota share primary insurance agreement entered
444 into between an authorized insurer and the corporation must
445 provide for a uniform specified percentage of coverage of
446 hurricane losses, by county or territory as set forth by the
447 corporation board, for all eligible risks of the authorized
448 insurer covered under the agreement.
449 e. Any quota share primary insurance agreement entered
450 into between an authorized insurer and the corporation is
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451 subject to review and approval by the office. However, such
452 agreement shall be authorized only as to insurance contracts
453 entered into between an authorized insurer and an insured who is
454 already insured by the corporation for wind coverage.
455 f. For all eligible risks covered under quota share
456 primary insurance agreements, the exposure and coverage levels
457 for both the corporation and authorized insurers shall be
458 reported by the corporation to the Florida Hurricane Catastrophe
459 Fund. For all policies of eligible risks covered under such
460 agreements, the corporation and the authorized insurer must
461 maintain complete and accurate records for the purpose of
462 exposure and loss reimbursement audits as required by fund
463 rules. The corporation and the authorized insurer shall each
464 maintain duplicate copies of policy declaration pages and
465 supporting claims documents.
466 g. The corporation board shall establish in its plan of
467 operation standards for quota share agreements which ensure that
468 there is no discriminatory application among insurers as to the
469 terms of the agreements, pricing of the agreements, incentive
470 provisions if any, and consideration paid for servicing policies
471 or adjusting claims.
472 h. The quota share primary insurance agreement between the
473 corporation and an authorized insurer must set forth the
474 specific terms under which coverage is provided, including, but
475 not limited to, the sale and servicing of policies issued under
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476 the agreement by the insurance agent of the authorized insurer
477 producing the business, the reporting of information concerning
478 eligible risks, the payment of premium to the corporation, and
479 arrangements for the adjustment and payment of hurricane claims
480 incurred on eligible risks by the claims adjuster and personnel
481 of the authorized insurer. Entering into a quota sharing
482 insurance agreement between the corporation and an authorized
483 insurer is voluntary and at the discretion of the authorized
484 insurer.
485 3. May provide that the corporation may employ or
486 otherwise contract with individuals or other entities to provide
487 administrative or professional services that may be appropriate
488 to effectuate the plan. The corporation may borrow funds by
489 issuing bonds or by incurring other indebtedness, and shall have
490 other powers reasonably necessary to effectuate the requirements
491 of this subsection, including, without limitation, the power to
492 issue bonds and incur other indebtedness in order to refinance
493 outstanding bonds or other indebtedness. The corporation may
494 seek judicial validation of its bonds or other indebtedness
495 under chapter 75. The corporation may issue bonds or incur other
496 indebtedness, or have bonds issued on its behalf by a unit of
497 local government pursuant to subparagraph (q)2. in the absence
498 of a hurricane or other weather-related event, upon a
499 determination by the corporation, subject to approval by the
500 office, that such action would enable it to efficiently meet the
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501 financial obligations of the corporation and that such
502 financings are reasonably necessary to effectuate the
503 requirements of this subsection. The corporation may take all
504 actions needed to facilitate tax-free status for such bonds or
505 indebtedness, including formation of trusts or other affiliated
506 entities. The corporation may pledge assessments, projected
507 recoveries from the Florida Hurricane Catastrophe Fund, other
508 reinsurance recoverables, policyholder surcharges and other
509 surcharges, and other funds available to the corporation as
510 security for bonds or other indebtedness. In recognition of s.
511 10, Art. I of the State Constitution, prohibiting the impairment
512 of obligations of contracts, it is the intent of the Legislature
513 that no action be taken whose purpose is to impair any bond
514 indenture or financing agreement or any revenue source committed
515 by contract to such bond or other indebtedness.
516 4. Must require that the corporation operate subject to
517 the supervision and approval of a board of governors consisting
518 of nine individuals who are residents of this state and who are
519 from different geographical areas of the state, one of whom is
520 appointed by the Governor and serves solely to advocate on
521 behalf of the consumer. The appointment of a consumer
522 representative by the Governor is deemed to be within the scope
523 of the exemption provided in s. 112.313(7)(b) and is in addition
524 to the appointments authorized under sub-subparagraph a.
525 a. The Governor, the Chief Financial Officer, the
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526 President of the Senate, and the Speaker of the House of
527 Representatives shall each appoint two members of the board. At
528 least one of the two members appointed by each appointing
529 officer must have demonstrated expertise in insurance and be
530 deemed to be within the scope of the exemption provided in s.
531 112.313(7)(b). The Chief Financial Officer shall designate one
532 of the appointees as chair. All board members serve at the
533 pleasure of the appointing officer. All members of the board are
534 subject to removal at will by the officers who appointed them.
535 All board members, including the chair, must be appointed to
536 serve for 3-year terms beginning annually on a date designated
537 by the plan. However, for the first term beginning on or after
538 July 1, 2009, each appointing officer shall appoint one member
539 of the board for a 2-year term and one member for a 3-year term.
540 A board vacancy shall be filled for the unexpired term by the
541 appointing officer. The Chief Financial Officer shall appoint a
542 technical advisory group to provide information and advice to
543 the board in connection with the board's duties under this
544 subsection. The executive director and senior managers of the
545 corporation shall be engaged by the board and serve at the
546 pleasure of the board. Any executive director appointed on or
547 after July 1, 2006, is subject to confirmation by the Senate.
548 The executive director is responsible for employing other staff
549 as the corporation may require, subject to review and
550 concurrence by the board.
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551 b. The board shall create a Market Accountability Advisory
552 Committee to assist the corporation in developing awareness of
553 its rates and its customer and agent service levels in
554 relationship to the voluntary market insurers writing similar
555 coverage.
556 (I) The members of the advisory committee consist of the
557 following 11 persons, one of whom must be elected chair by the
558 members of the committee: four representatives, one appointed by
559 the Florida Association of Insurance Agents, one by the Florida
560 Association of Insurance and Financial Advisors, one by the
561 Professional Insurance Agents of Florida, and one by the Latin
562 American Association of Insurance Agencies; three
563 representatives appointed by the insurers with the three highest
564 voluntary market share of residential property insurance
565 business in the state; one representative from the Office of
566 Insurance Regulation; one consumer appointed by the board who is
567 insured by the corporation at the time of appointment to the
568 committee; one representative appointed by the Florida
569 Association of Realtors; and one representative appointed by the
570 Florida Bankers Association. All members shall be appointed to
571 3-year terms and may serve for consecutive terms.
572 (II) The committee shall report to the corporation at each
573 board meeting on insurance market issues which may include rates
574 and rate competition with the voluntary market; service,
575 including policy issuance, claims processing, and general
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576 responsiveness to policyholders, applicants, and agents; and
577 matters relating to depopulation.
578 5. Must provide a procedure for determining the
579 eligibility of a risk for coverage, as follows:
580 a. Subject to s. 627.3517, with respect to personal lines
581 residential risks, if the risk is offered coverage from an
582 authorized insurer at the insurer's approved rate under a
583 standard policy including wind coverage or, if consistent with
584 the insurer's underwriting rules as filed with the office, a
585 basic policy including wind coverage, for a new application to
586 the corporation for coverage, the risk is not eligible for any
587 policy issued by the corporation unless the premium for coverage
588 from the authorized insurer is more than 20 15 percent greater
589 than the premium for comparable coverage from the corporation.
590 Whenever an offer of coverage for a personal lines residential
591 risk is received for a policyholder of the corporation at
592 renewal from an authorized insurer, if the offer is equal to or
593 less than the corporation's renewal premium for comparable
594 coverage, the risk is not eligible for coverage with the
595 corporation. If the risk is not able to obtain such offer, the
596 risk is eligible for a standard policy including wind coverage
597 or a basic policy including wind coverage issued by the
598 corporation; however, if the risk could not be insured under a
599 standard policy including wind coverage regardless of market
600 conditions, the risk is eligible for a basic policy including
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601 wind coverage unless rejected under subparagraph 8. However, a
602 policyholder removed from the corporation through an assumption
603 agreement remains eligible for coverage from the corporation
604 until the end of the assumption period. The corporation shall
605 determine the type of policy to be provided on the basis of
606 objective standards specified in the underwriting manual and
607 based on generally accepted underwriting practices.
608 (I) If the risk accepts an offer of coverage through the
609 market assistance plan or through a mechanism established by the
610 corporation other than a plan established by s. 627.3518, before
611 a policy is issued to the risk by the corporation or during the
612 first 30 days of coverage by the corporation, and the producing
613 agent who submitted the application to the plan or to the
614 corporation is not currently appointed by the insurer, the
615 insurer shall:
616 (A) Pay to the producing agent of record of the policy for
617 the first year, an amount that is the greater of the insurer's
618 usual and customary commission for the type of policy written or
619 a fee equal to the usual and customary commission of the
620 corporation; or
621 (B) Offer to allow the producing agent of record of the
622 policy to continue servicing the policy for at least 1 year and
623 offer to pay the agent the greater of the insurer's or the
624 corporation's usual and customary commission for the type of
625 policy written.
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626
627 If the producing agent is unwilling or unable to accept
628 appointment, the new insurer shall pay the agent in accordance
629 with sub-sub-sub-subparagraph (A).
630 (II) If the corporation enters into a contractual
631 agreement for a take-out plan, the producing agent of record of
632 the corporation policy is entitled to retain any unearned
633 commission on the policy, and the insurer shall:
634 (A) Pay to the producing agent of record, for the first
635 year, an amount that is the greater of the insurer's usual and
636 customary commission for the type of policy written or a fee
637 equal to the usual and customary commission of the corporation;
638 or
639 (B) Offer to allow the producing agent of record to
640 continue servicing the policy for at least 1 year and offer to
641 pay the agent the greater of the insurer's or the corporation's
642 usual and customary commission for the type of policy written.
643
644 If the producing agent is unwilling or unable to accept
645 appointment, the new insurer shall pay the agent in accordance
646 with sub-sub-sub-subparagraph (A).
647 b. With respect to commercial lines residential risks, for
648 a new application to the corporation for coverage, if the risk
649 is offered coverage under a policy including wind coverage from
650 an authorized insurer at its approved rate, the risk is not
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651 eligible for a policy issued by the corporation unless the
652 premium for coverage from the authorized insurer is more than 15
653 percent greater than the premium for comparable coverage from
654 the corporation. Whenever an offer of coverage for a commercial
655 lines residential risk is received for a policyholder of the
656 corporation at renewal from an authorized insurer, if the offer
657 is equal to or less than the corporation's renewal premium for
658 comparable coverage, the risk is not eligible for coverage with
659 the corporation. If the risk is not able to obtain any such
660 offer, the risk is eligible for a policy including wind coverage
661 issued by the corporation. However, a policyholder removed from
662 the corporation through an assumption agreement remains eligible
663 for coverage from the corporation until the end of the
664 assumption period.
665 (I) If the risk accepts an offer of coverage through the
666 market assistance plan or through a mechanism established by the
667 corporation other than a plan established by s. 627.3518, before
668 a policy is issued to the risk by the corporation or during the
669 first 30 days of coverage by the corporation, and the producing
670 agent who submitted the application to the plan or the
671 corporation is not currently appointed by the insurer, the
672 insurer shall:
673 (A) Pay to the producing agent of record of the policy,
674 for the first year, an amount that is the greater of the
675 insurer's usual and customary commission for the type of policy
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676 written or a fee equal to the usual and customary commission of
677 the corporation; or
678 (B) Offer to allow the producing agent of record of the
679 policy to continue servicing the policy for at least 1 year and
680 offer to pay the agent the greater of the insurer's or the
681 corporation's usual and customary commission for the type of
682 policy written.
683
684 If the producing agent is unwilling or unable to accept
685 appointment, the new insurer shall pay the agent in accordance
686 with sub-sub-sub-subparagraph (A).
687 (II) If the corporation enters into a contractual
688 agreement for a take-out plan, the producing agent of record of
689 the corporation policy is entitled to retain any unearned
690 commission on the policy, and the insurer shall:
691 (A) Pay to the producing agent of record, for the first
692 year, an amount that is the greater of the insurer's usual and
693 customary commission for the type of policy written or a fee
694 equal to the usual and customary commission of the corporation;
695 or
696 (B) Offer to allow the producing agent of record to
697 continue servicing the policy for at least 1 year and offer to
698 pay the agent the greater of the insurer's or the corporation's
699 usual and customary commission for the type of policy written.
700
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701 If the producing agent is unwilling or unable to accept
702 appointment, the new insurer shall pay the agent in accordance
703 with sub-sub-sub-subparagraph (A).
704 c. For purposes of determining comparable coverage under
705 sub-subparagraphs a. and b., the comparison must be based on
706 those forms and coverages that are reasonably comparable. The
707 corporation may rely on a determination of comparable coverage
708 and premium made by the producing agent who submits the
709 application to the corporation, made in the agent's capacity as
710 the corporation's agent. A comparison may be made solely of the
711 premium with respect to the main building or structure only on
712 the following basis: the same coverage A or other building
713 limits; the same percentage hurricane deductible that applies on
714 an annual basis or that applies to each hurricane for commercial
715 residential property; the same percentage of ordinance and law
716 coverage, if the same limit is offered by both the corporation
717 and the authorized insurer; the same mitigation credits, to the
718 extent the same types of credits are offered both by the
719 corporation and the authorized insurer; the same method for loss
720 payment, such as replacement cost or actual cash value, if the
721 same method is offered both by the corporation and the
722 authorized insurer in accordance with underwriting rules; and
723 any other form or coverage that is reasonably comparable as
724 determined by the board. If an application is submitted to the
725 corporation for wind-only coverage in the coastal account, the
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726 premium for the corporation's wind-only policy plus the premium
727 for the ex-wind policy that is offered by an authorized insurer
728 to the applicant must be compared to the premium for multiperil
729 coverage offered by an authorized insurer, subject to the
730 standards for comparison specified in this subparagraph. If the
731 corporation or the applicant requests from the authorized
732 insurer a breakdown of the premium of the offer by types of
733 coverage so that a comparison may be made by the corporation or
734 its agent and the authorized insurer refuses or is unable to
735 provide such information, the corporation may treat the offer as
736 not being an offer of coverage from an authorized insurer at the
737 insurer's approved rate.
738 6. Must include rules for classifications of risks and
739 rates.
740 7. Must provide that if premium and investment income for
741 an account attributable to a particular calendar year are in
742 excess of projected losses and expenses for the account
743 attributable to that year, such excess shall be held in surplus
744 in the account. Such surplus must be available to defray
745 deficits in that account as to future years and used for that
746 purpose before assessing assessable insurers and assessable
747 insureds as to any calendar year.
748 8. Must provide objective criteria and procedures to be
749 uniformly applied to all applicants in determining whether an
750 individual risk is so hazardous as to be uninsurable. In making
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751 this determination and in establishing the criteria and
752 procedures, the following must be considered:
753 a. Whether the likelihood of a loss for the individual
754 risk is substantially higher than for other risks of the same
755 class; and
756 b. Whether the uncertainty associated with the individual
757 risk is such that an appropriate premium cannot be determined.
758
759 The acceptance or rejection of a risk by the corporation shall
760 be construed as the private placement of insurance, and the
761 provisions of chapter 120 do not apply.
762 9. Must provide that the corporation make its best efforts
763 to procure catastrophe reinsurance at reasonable rates, to cover
764 its projected 100-year probable maximum loss as determined by
765 the board of governors. If catastrophe reinsurance is not
766 available at reasonable rates, the corporation need not purchase
767 it, but the corporation shall include the costs of reinsurance
768 to cover its projected 100-year probable maximum loss in its
769 rate calculations even if it does not purchase catastrophe
770 reinsurance.
771 10. The policies issued by the corporation must provide
772 that if the corporation or the market assistance plan obtains an
773 offer from an authorized insurer to cover the risk at its
774 approved rates, the risk is no longer eligible for renewal
775 through the corporation, except as otherwise provided in this
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776 subsection.
777 11. Corporation policies and applications must include a
778 notice that the corporation policy could, under this section, be
779 replaced with a policy issued by an authorized insurer which
780 does not provide coverage identical to the coverage provided by
781 the corporation. The notice must also specify that acceptance of
782 corporation coverage creates a conclusive presumption that the
783 applicant or policyholder is aware of this potential.
784 12. May establish, subject to approval by the office,
785 different eligibility requirements and operational procedures
786 for any line or type of coverage for any specified county or
787 area if the board determines that such changes are justified due
788 to the voluntary market being sufficiently stable and
789 competitive in such area or for such line or type of coverage
790 and that consumers who, in good faith, are unable to obtain
791 insurance through the voluntary market through ordinary methods
792 continue to have access to coverage from the corporation. If
793 coverage is sought in connection with a real property transfer,
794 the requirements and procedures may not provide an effective
795 date of coverage later than the date of the closing of the
796 transfer as established by the transferor, the transferee, and,
797 if applicable, the lender.
798 13. Must provide that, with respect to the coastal
799 account, any assessable insurer with a surplus as to
800 policyholders of $25 million or less writing 25 percent or more
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801 of its total countrywide property insurance premiums in this
802 state may petition the office, within the first 90 days of each
803 calendar year, to qualify as a limited apportionment company. A
804 regular assessment levied by the corporation on a limited
805 apportionment company for a deficit incurred by the corporation
806 for the coastal account may be paid to the corporation on a
807 monthly basis as the assessments are collected by the limited
808 apportionment company from its insureds, but a limited
809 apportionment company must begin collecting the regular
810 assessments not later than 90 days after the regular assessments
811 are levied by the corporation, and the regular assessments must
812 be paid in full within 15 months after being levied by the
813 corporation. A limited apportionment company shall collect from
814 its policyholders any emergency assessment imposed under sub-
815 subparagraph (b)3.d. The plan must provide that, if the office
816 determines that any regular assessment will result in an
817 impairment of the surplus of a limited apportionment company,
818 the office may direct that all or part of such assessment be
819 deferred as provided in subparagraph (q)4. However, an emergency
820 assessment to be collected from policyholders under sub-
821 subparagraph (b)3.d. may not be limited or deferred.
822 14. Must provide that the corporation appoint as its
823 licensed agents only those agents who throughout such
824 appointments also hold an appointment as defined in s. 626.015
825 by an insurer who is authorized to write and is actually writing
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826 or renewing personal lines residential property coverage,
827 commercial residential property coverage, or commercial
828 nonresidential property coverage within the state.
829 15. Must provide a premium payment plan option to its
830 policyholders which, at a minimum, allows for quarterly and
831 semiannual payment of premiums. A monthly payment plan may, but
832 is not required to, be offered.
833 16. Must limit coverage on mobile homes or manufactured
834 homes built before 1994 to actual cash value of the dwelling
835 rather than replacement costs of the dwelling.
836 17. Must provide coverage for manufactured or mobile home
837 dwellings. Such coverage must also include the following
838 attached structures:
839 a. Screened enclosures that are aluminum framed or
840 screened enclosures that are not covered by the same or
841 substantially the same materials as those of the primary
842 dwelling;
843 b. Carports that are aluminum or carports that are not
844 covered by the same or substantially the same materials as those
845 of the primary dwelling; and
846 c. Patios that have a roof covering that is constructed of
847 materials that are not the same or substantially the same
848 materials as those of the primary dwelling.
849
850 The corporation shall make available a policy for mobile homes
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851 or manufactured homes for a minimum insured value of at least
852 $3,000.
853 18. May provide such limits of coverage as the board
854 determines, consistent with the requirements of this subsection.
855 19. May require commercial property to meet specified
856 hurricane mitigation construction features as a condition of
857 eligibility for coverage.
858 20. Must provide that new or renewal policies issued by
859 the corporation on or after January 1, 2012, which cover
860 sinkhole loss do not include coverage for any loss to
861 appurtenant structures, driveways, sidewalks, decks, or patios
862 that are directly or indirectly caused by sinkhole activity. The
863 corporation shall exclude such coverage using a notice of
864 coverage change, which may be included with the policy renewal,
865 and not by issuance of a notice of nonrenewal of the excluded
866 coverage upon renewal of the current policy.
867 21. As of January 1, 2012, must require that the agent
868 obtain from an applicant for coverage from the corporation an
869 acknowledgment signed by the applicant, which includes, at a
870 minimum, the following statement:
871
872 ACKNOWLEDGMENT OF POTENTIAL SURCHARGE
873 AND ASSESSMENT LIABILITY:
874
875 1. AS A POLICYHOLDER OF CITIZENS PROPERTY INSURANCE
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876 CORPORATION, I UNDERSTAND THAT IF THE CORPORATION SUSTAINS A
877 DEFICIT AS A RESULT OF HURRICANE LOSSES OR FOR ANY OTHER REASON,
878 MY POLICY COULD BE SUBJECT TO SURCHARGES, WHICH WILL BE DUE AND
879 PAYABLE UPON RENEWAL, CANCELLATION, OR TERMINATION OF THE
880 POLICY, AND THAT THE SURCHARGES COULD BE AS HIGH AS 45 PERCENT
881 OF MY PREMIUM, OR A DIFFERENT AMOUNT AS IMPOSED BY THE FLORIDA
882 LEGISLATURE.
883 2. I UNDERSTAND THAT I CAN AVOID THE CITIZENS POLICYHOLDER
884 SURCHARGE, WHICH COULD BE AS HIGH AS 45 PERCENT OF MY PREMIUM,
885 BY OBTAINING COVERAGE FROM A PRIVATE MARKET INSURER AND THAT TO
886 BE ELIGIBLE FOR COVERAGE BY CITIZENS, I MUST FIRST TRY TO OBTAIN
887 PRIVATE MARKET COVERAGE BEFORE APPLYING FOR OR RENEWING COVERAGE
888 WITH CITIZENS. I UNDERSTAND THAT PRIVATE MARKET INSURANCE RATES
889 ARE REGULATED AND APPROVED BY THE STATE.
890 3. I UNDERSTAND THAT I MAY BE SUBJECT TO EMERGENCY
891 ASSESSMENTS TO THE SAME EXTENT AS POLICYHOLDERS OF OTHER
892 INSURANCE COMPANIES, OR A DIFFERENT AMOUNT AS IMPOSED BY THE
893 FLORIDA LEGISLATURE.
894 4. I ALSO UNDERSTAND THAT CITIZENS PROPERTY INSURANCE
895 CORPORATION IS NOT SUPPORTED BY THE FULL FAITH AND CREDIT OF THE
896 STATE OF FLORIDA.
897
898 a. The corporation shall maintain, in electronic format or
899 otherwise, a copy of the applicant's signed acknowledgment and
900 provide a copy of the statement to the policyholder as part of
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901 the first renewal after the effective date of this subparagraph.
902 b. The signed acknowledgment form creates a conclusive
903 presumption that the policyholder understood and accepted his or
904 her potential surcharge and assessment liability as a
905 policyholder of the corporation.
906 (n)1. Rates for coverage provided by the corporation must
907 be actuarially sound and subject to s. 627.062, except as
908 otherwise provided in this paragraph. The corporation shall file
909 its recommended rates with the office at least annually. The
910 corporation shall provide any additional information regarding
911 the rates which the office requires. The office shall consider
912 the recommendations of the board and issue a final order
913 establishing the rates for the corporation within 45 days after
914 the recommended rates are filed. The corporation may not pursue
915 an administrative challenge or judicial review of the final
916 order of the office.
917 2. In addition to the rates otherwise determined pursuant
918 to this paragraph, the corporation shall impose and collect an
919 amount equal to the premium tax provided in s. 624.509 to
920 augment the financial resources of the corporation.
921 3. After the public hurricane loss-projection model under
922 s. 627.06281 has been found to be accurate and reliable by the
923 Florida Commission on Hurricane Loss Projection Methodology, the
924 model shall be considered when establishing the windstorm
925 portion of the corporation's rates. The corporation may use the
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926 public model results in combination with the results of private
927 models to calculate rates for the windstorm portion of the
928 corporation's rates. This subparagraph does not require or allow
929 the corporation to adopt rates lower than the rates otherwise
930 required or allowed by this paragraph.
931 4. The rate filings for the corporation which were
932 approved by the office and took effect January 1, 2007, are
933 rescinded, except for those rates that were lowered. As soon as
934 possible, the corporation shall begin using the lower rates that
935 were in effect on December 31, 2006, and provide refunds to
936 policyholders who paid higher rates as a result of that rate
937 filing. The rates in effect on December 31, 2006, remain in
938 effect for the 2007 and 2008 calendar years except for any rate
939 change that results in a lower rate. The next rate change that
940 may increase rates shall take effect pursuant to a new rate
941 filing recommended by the corporation and established by the
942 office, subject to this paragraph.
943 4.5. Beginning on July 15, 2009, and annually thereafter,
944 The corporation must make a recommended actuarially sound rate
945 filing for each personal and commercial line of business it
946 writes, to be effective no earlier than January 1, 2010.
947 5.6. Beginning on or after January 1, 2010, and
948 Notwithstanding the board's recommended rates and the office's
949 final order regarding the corporation's filed rates under
950 subparagraph 1., the corporation shall annually implement a rate
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951 increase which, except for sinkhole coverage, does not exceed
952 the following 10 percent for any single policy issued by the
953 corporation, excluding coverage changes and surcharges:
954 a. Eleven percent for 2022.
955 b. Twelve percent for 2023.
956 c. Thirteen percent for 2024.
957 d. Fourteen percent for 2025.
958 e. Fifteen percent for 2026 and all subsequent years.
959 6.7. The corporation may also implement an increase to
960 reflect the effect on the corporation of the cash buildup factor
961 pursuant to s. 215.555(5)(b).
962 7.8. The corporation's implementation of rates as
963 prescribed in subparagraph 5. 6. shall cease for any line of
964 business written by the corporation upon the corporation's
965 implementation of actuarially sound rates. Thereafter, the
966 corporation shall annually make a recommended actuarially sound
967 rate filing for each commercial and personal line of business
968 the corporation writes.
969 (jj) The corporation's budget allocations for the
970 compensation of all corporation employees and any proposed raise
971 for an individual employee exceeding 10 percent of that
972 employee's current salary must be approved by the board of
973 governors. The corporation must have an overall employee
974 compensation plan approved by the board of governors.
975 Section 9. Subsection (5) of section 627.3518, Florida
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976 Statutes, is amended to read:
977 627.3518 Citizens Property Insurance Corporation
978 policyholder eligibility clearinghouse program.—The purpose of
979 this section is to provide a framework for the corporation to
980 implement a clearinghouse program by January 1, 2014.
981 (5) Notwithstanding s. 627.3517, any applicant for new
982 coverage from the corporation is not eligible for coverage from
983 the corporation if provided an offer of coverage from an
984 authorized insurer through the program at a premium that is at
985 or below the eligibility threshold established in s.
986 627.351(6)(c)5.a. Whenever an offer of coverage for a personal
987 lines risk is received for a policyholder of the corporation at
988 renewal from an authorized insurer through the program, if the
989 offer is equal to or less than the corporation's renewal premium
990 for comparable coverage, the risk is not eligible for coverage
991 with the corporation. In the event an offer of coverage for a
992 new applicant is received from an authorized insurer through the
993 program, and the premium offered exceeds the eligibility
994 threshold contained in s. 627.351(6)(c)5.a., the applicant or
995 insured may elect to accept such coverage, or may elect to
996 accept or continue coverage with the corporation. In the event
997 an offer of coverage for a personal lines risk is received from
998 an authorized insurer at renewal through the program, and the
999 premium offered is more than the corporation's renewal premium
1000 for comparable coverage, the insured may elect to accept such
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1001 coverage, or may elect to accept or continue coverage with the
1002 corporation. Section 627.351(6)(c)5.a.(I) does not apply to an
1003 offer of coverage from an authorized insurer obtained through
1004 the program. An applicant for coverage from the corporation who
1005 was declared ineligible for coverage at renewal by the
1006 corporation in the previous 36 months due to an offer of
1007 coverage pursuant to this subsection shall be considered a
1008 renewal under this section if the corporation determines that
1009 the authorized insurer making the offer of coverage pursuant to
1010 this subsection continues to insure the applicant and increased
1011 the rate on the policy in excess of the increase allowed for the
1012 corporation under s. 627.351(6)(n)5. s. 627.351(6)(n)6.
1013 Section 10. Subsection (4) is added to section 627.428,
1014 Florida Statutes, to read:
1015 627.428 Attorney fees.—
1016 (4) In an award of attorney fees under this section for a
1017 claim arising under a property insurance policy, upon the
1018 request of an insured a court may apply a contingency risk
1019 multiplier in rare and exceptional circumstances as determined
1020 by the court based on a written finding that at least one of the
1021 following factors has been met:
1022 (a) The type of property insurance claim in dispute is
1023 complex in nature and uncommon in occurrence.
1024 (b) The property insurer has denied that the insured is
1025 entitled to coverage for the claim that is in dispute.
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1026 (c) The insured cannot find competent counsel within a
1027 reasonable distance from the location of the property that is
1028 the subject of the claim. At a minimum, reasonable distance
1029 includes the counties contiguous to the county where the
1030 property that is the subject of the claim is located.
1031 (d) The difference between the insurer’s initial offer and
1032 the insured’s initial demand for damages to settle the loss was
1033 at least $5,000 or at least 15 percent of the difference,
1034 whichever is greater, and the insured recovered more than the
1035 initial offer.
1036 (e) The amount of damages that the insured recovered for
1037 the claim exceeded the insurer's initial offer by at least 200
1038 percent.
1039 Section 11. Paragraph (c) of subsection (4) of section
1040 627.7011, Florida Statutes, is redesignated as paragraph (d),
1041 and a new paragraph (c) is added to that subsection, to read:
1042 627.7011 Homeowners' policies; offer of replacement cost
1043 coverage and law and ordinance coverage.—
1044 (4)
1045 (c) An insurer that issues a homeowner's insurance policy
1046 or schedule providing that any loss that is repaired or replaced
1047 will be adjusted on the basis of actual cash value must:
1048 1. Provide a policyholder with a form, approved by the
1049 office, that the policyholder must sign at the initial policy or
1050 schedule issuance, and must fully advise the policyholder of the
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1051 nature of the coverage being accepted if the policyholder
1052 chooses to purchase a policy providing actual cash value
1053 coverage. The signed form creates the conclusive presumption
1054 that there was an informed, knowing acceptance of actual cash
1055 value coverage and rejection of replacement cost coverage.
1056 2. Include with the policy or schedule providing actual
1057 cash value coverage at the initial issuance and every renewal,
1058 in bold type no smaller than 18 points, the following statement:
1059
1060 "YOU ARE ELECTING TO PURCHASE COVERAGE ON YOUR HOME THAT
1061 PROVIDES THAT ANY LOSS THAT IS REPAIRED OR REPLACED WILL BE
1062 ADJUSTED ON THE BASIS OF ACTUAL CASH VALUE. THIS MEANS THAT
1063 DEPRECIATION IN THE VALUE OF YOUR LOST OR DAMAGED PROPERTY WILL
1064 BE CONSIDERED IN DETERMINING WHAT THE INSURER PAYS YOU FOR YOUR
1065 LOSS OR DAMAGE. BE ADVISED THIS MAY RESULT IN YOUR HAVING TO PAY
1066 SIGNIFICANT COSTS TO REPAIR OR REPLACE YOUR PROPERTY. PLEASE
1067 DISCUSS WITH YOUR INSURANCE AGENT."
1068
1069 3. At least once every 3 years, provide a policyholder who
1070 has a policy or schedule providing actual cash value coverage
1071 with notice, on a form approved by the office, that replacement
1072 cost coverage is available.
1073 Section 12. Section 627.70132, Florida Statutes, is
1074 amended to read:
1075 627.70132 Notice of property insurance windstorm or
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1076 hurricane claim.—
1077 (1) As used in this section, the term:
1078 (a) "Reopened claim" means a claim that an insurer has
1079 previously closed, but that has been reopened upon an insured's
1080 request for additional costs for loss or damage previously
1081 disclosed to the insurer.
1082 (b) "Supplemental claim" means a claim for additional loss
1083 or damage from the same peril which the insurer has previously
1084 adjusted discovered while completing repairs or replacement
1085 pursuant to an open claim for which timely notice was previously
1086 provided to the insurer.
1087 (2) A claim or reopened claim, but not a supplemental
1088 claim, or reopened claim under an insurance policy that provides
1089 property insurance, as defined in s. 624.604, including a
1090 property insurance policy issued by an eligible surplus lines
1091 insurer, for loss or damage caused by any the peril of windstorm
1092 or hurricane is barred unless notice of the claim, supplemental
1093 claim, or reopened claim was given to the insurer in accordance
1094 with the terms of the policy within 2 3 years after the date of
1095 loss hurricane first made landfall or the windstorm caused the
1096 covered damage.
1097 (3) For claims resulting from hurricanes, tornadoes,
1098 windstorms, severe rain, or other weather-related events that
1099 are tracked by weather services and media, the date of loss is
1100 the date that the hurricane made landfall, or the tornado,
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1101 windstorm, severe rain, or other weather-related event is
1102 verified by the National Oceanic and Atmospheric Administration
1103 or another disinterested verifiable third party to have
1104 occurred, in the location of the property that is the subject of
1105 the claim For purposes of this section, the term "supplemental
1106 claim" or "reopened claim" means any additional claim for
1107 recovery from the insurer for losses from the same peril
1108 hurricane or windstorm which the insurer has previously adjusted
1109 pursuant to the initial claim.
1110 (4) A supplemental claim is not barred as long as notice
1111 of that claim is given to the insurer while the claim to which
1112 the supplemental claim is related remains open.
1113 (5) For the purposes of this section, a claim that an
1114 insurer has closed without providing an insured with the total
1115 amount due for the loss or damage is not considered a closed
1116 claim.
1117 (6) This section does not affect any applicable limitation
1118 on civil actions provided in s. 95.11 for claims, supplemental
1119 claims, or reopened claims timely filed under this section.
1120 Section 13. Paragraph (e) of subsection (9) of section
1121 627.7015, Florida Statutes, is amended to read:
1122 627.7015 Alternative procedure for resolution of disputed
1123 property insurance claims.—
1124 (9) For purposes of this section, the term "claim" refers
1125 to any dispute between an insurer and a policyholder relating to
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1126 a material issue of fact other than a dispute:
1127 (e) With respect to a windstorm or hurricane loss that
1128 does not comply with s. 627.70132.
1129 Section 14. Section 627.70152, Florida Statutes, is
1130 created to read:
1131 627.70152 Suits arising under a property insurance
1132 policy.—
1133 (1) APPLICATION.—This section applies exclusively to all
1134 suits arising under a residential or commercial property
1135 insurance policy not brought by an assignee which is issued or
1136 renewed on or after July 1, 2021.
1137 (2) DEFINITIONS.—As used in this section, the term:
1138 (a) "Claimant" means an insured who is filing suit under a
1139 residential or commercial property insurance policy.
1140 (b) "Disputed amount" means the difference between the
1141 claimant's presuit settlement demand, not including attorney
1142 fees and costs listed in the demand, and the insurer's presuit
1143 settlement offer, not including attorney fees and costs, if part
1144 of the offer.
1145 (c) "Judgment obtained" means damages recovered, if any,
1146 but does not include any amount awarded for attorney fees,
1147 costs, or interest.
1148 (d) "Presuit settlement demand" means the demand made by
1149 the claimant in the written notice of intent to initiate
1150 litigation as required by paragraph (3)(e). The demand must
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1151 include the amount of reasonable and necessary attorney fees and
1152 costs incurred by the claimant, to be calculated by multiplying
1153 the number of hours actually worked on the claim, by the
1154 claimant's attorney as of the date of the notice by a reasonable
1155 hourly rate.
1156 (e) "Presuit settlement offer" means the offer made by the
1157 insurer in its written response to the notice as required by
1158 subsection (4).
1159 (3) CLAIMANT DUTIES AND NOTICE.—A claimant must timely:
1160 (a) Cooperate with the insurer in the claim investigation.
1161 (b) Provide the insurer with requested records and
1162 documents related to any services that have been provided.
1163 (c) Provide the insurer with accurate and up-to-date
1164 estimates of the scope of work needed to be performed, including
1165 supplemental or additional repairs, if required.
1166 (d) Allow the insurer to inspect, photograph, or evaluate,
1167 in a reasonable manner and at a reasonable time, the property
1168 that is the subject of the claim.
1169 (e) As a condition precedent to filing a suit under a
1170 property insurance policy, provide the department with written
1171 notice of intent to initiate litigation on a form provided by
1172 the department. Such notice must be given at least 10 business
1173 days before filing suit under the policy, but may not be given
1174 before the 90-day period under s. 627.70131 has expired or the
1175 insurer has denied coverage, whichever is earlier. Notice to the
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1176 insurer must be provided by the department to the e-mail address
1177 designated by the insurer under s. 624.422. The notice must
1178 state with specificity all of the following information:
1179 1. That the notice is being provided pursuant to this
1180 section.
1181 2. The alleged acts or omissions of the insurer giving
1182 rise to the suit, which may include a denial of coverage.
1183 3. If provided by an attorney or other representative,
1184 that a copy of the notice was provided to the claimant.
1185 4. If the notice is being provided to an insurer following
1186 a denial of coverage, the notice must also include an estimate
1187 of damages, if known.
1188 5. If the notice is provided to an insurer following
1189 alleging an act or omission by the insurer other than denial of
1190 coverage, the notice must also include both of the following:
1191 a. The presuit settlement demand, which must itemize the
1192 damages, attorney fees, and costs.
1193 b. The disputed amount.
1194
1195 Documentation to support the information provided in this
1196 paragraph may be provided along with the notice to the insurer.
1197 (f) Serve a notice of intent to initiate litigation within
1198 the time limits provided in s. 95.11. However, the notice is not
1199 required if the suit is a counterclaim. Service of a notice
1200 tolls the time limits provided in s. 95.11 for 10 business days
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1201 if such time limits will expire before the end of the 10-day
1202 notice period.
1203 (4) INSURER DUTIES.—An insurer must have a procedure for
1204 the prompt investigation, review, and evaluation of the dispute
1205 stated in the notice and must investigate each claim contained
1206 in the notice in accordance with the Florida Insurance Code.
1207 An insurer must respond in writing within 10 business days after
1208 receiving the notice specified in subsection (3).
1209 1. If an insurer is responding to a notice served on the
1210 insurer following a denial of coverage by the insurer, the
1211 insurer must respond by:
1212 a. Accepting coverage;
1213 b. Continuing to deny coverage; or
1214 c. Asserting the right to reinspect the damaged property.
1215 If the insurer responds by asserting the right to reinspect the
1216 damaged property, it has 14 business days from the response
1217 asserting that right, to reinspect the property and accept or
1218 continue to deny coverage. If the insurer continues to deny
1219 coverage, the claimant may file suit without providing
1220 additional notice to the insurer.
1221 2. If an insurer is responding to a notice provided to the
1222 insurer alleging an act or omission by the insurer other than a
1223 denial of coverage, the insurer must respond by making a
1224 settlement offer or requiring the claimant to participate in
1225 appraisal or another method of alternative dispute resolution.
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1226 The time limits provided in s. 95.11 are tolled as long as
1227 appraisal or other alternative dispute resolution is ongoing.
1228 However, if the appraisal or alternative dispute resolution has
1229 not been concluded within 90 days after the expiration of the
1230 10-day notice of intent to initiate litigation specified in
1231 subsection (3), the claimant or claimant's attorney may
1232 immediately file suit without providing the insurer additional
1233 notice.
1234 (5) DISMISSAL OF SUIT.—A court must dismiss without
1235 prejudice any claimant's suit relating to a claim for which a
1236 notice of intent to initiate litigation is given as required by
1237 this section if such suit is commenced before the expiration of
1238 the 10-day notice period.
1239 (6) ADMISSIBILITY OF NOTICE AND RESPONSE.—The notice
1240 provided pursuant to subsection (3) and, if applicable, the
1241 documentation to support the information provided in the notice:
1242 (a) Are admissible as evidence in a civil suit or an
1243 alternative dispute resolution proceeding relating to the claim
1244 for which the notice is given.
1245 (b) Do not limit the evidence of attorney fees or costs,
1246 damages, or loss which may be offered at trial.
1247 (c) Do not relieve any obligation that an insured or
1248 assignee has to give notice under any other provision of law.
1249 (7) ATTORNEY FEES.—Notwithstanding any other provisions of
1250 law, in a suit arising under a residential or commercial
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
PCS for CS/HB 305 ORIGINAL 2021
1251 property insurance policy not brought by an assignee, attorney
1252 fees and costs may be recovered by a claimant only under s.
1253 57.105, s. 627.428(4), and this section.
1254 (a) If a court dismisses a claimant's suit pursuant to
1255 subsection (5), the court may not award to the claimant any
1256 incurred attorney fees for services rendered before the
1257 dismissal of the suit.
1258 (b) The claimant is entitled to an award of reasonable
1259 attorney fees and costs as follows:
1260 1. If the difference between the judgment obtained by the
1261 claimant and the presuit settlement offer, excluding reasonable
1262 attorney fees and costs, is less than 20 percent of the disputed
1263 amount, each party pays its own attorney fees and costs.
1264 2. If the difference between the judgment obtained by the
1265 claimant and the presuit settlement offer, excluding reasonable
1266 attorney fees and costs, is at least 20 percent but less than 50
1267 percent of the disputed amount, the insurer pays the claimant's
1268 attorney fees and costs equal to the percentage of the disputed
1269 amount obtained times the total attorney fees and costs.
1270 3. If the difference between the judgment obtained by the
1271 claimant and the presuit settlement offer, excluding reasonable
1272 attorney fees and costs, is at least 50 percent of the disputed
1273 amount, the insurer pays the claimant's full attorney fees and
1274 costs.
1275 (8) SUPPLEMENTAL OR REOPENED CLAIMS.—The time frames for
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
PCS for CS/HB 305 ORIGINAL 2021
1276 giving notice of supplemental or reopened claims set forth in s.
1277 627.70132 are tolled during litigation that is brought pursuant
1278 to this section.
1279 Section 15. Subsection (3) of section 628.801, Florida
1280 Statutes, is amended to read:
1281 628.801 Insurance holding companies; registration;
1282 regulation.—
1283 (3) In addition to the powers which the office has under
1284 Effective January 1, 2015, pursuant to chapter 624 relating to
1285 the examination of insurers, the office may examine any insurer
1286 registered under this section and its affiliates to ascertain
1287 the financial condition of the insurer, including the enterprise
1288 risk to the insurer by the ultimate controlling party, or by any
1289 entity or combination of entities within the insurance holding
1290 company system, or by the insurance holding company system on a
1291 consolidated basis.
1292 (a) The office may require any insurer registered under
1293 this section to produce such records, books, or other
1294 information and papers in the possession of the insurer or its
1295 affiliates as are reasonably necessary.
1296 (b) The office may retain at the registered insurer's
1297 expense such attorneys, actuaries, accountants and other experts
1298 not otherwise a part of the office's staff as shall be
1299 reasonably necessary to assist in the conduct of the examination
1300 under this subsection. Any persons so retained shall be under
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
PCS for CS/HB 305 ORIGINAL 2021
1301 the direction and control of the office and shall act in a
1302 purely advisory capacity.
1303 (c) Each registered insurer producing for examination
1304 records, books, and papers pursuant to this subsection is liable
1305 for and shall pay the expense of examination in accordance with
1306 s. 624.320.
1307 (d) The office shall have the power to examine the
1308 affiliates of the registered insurer. The scope of the
1309 examination of an insurer's affiliates under this subsection
1310 must be limited to information reasonably necessary. An
1311 examination of an insurer's affiliate under this section, unless
1312 reasonably necessary to ascertain the financial condition of the
1313 insurer, may not extend to the passive investors of affiliates
1314 in the holding company system which do not provide services
1315 directly or indirectly to the insurer or have direct or indirect
1316 relationships with the insurer.
1317 Section 16. This act shall take effect July 1, 2021.
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COMMERCE COMMITTEE
PCS for CS/HB 305 by Rep. Rommel
Insurance
AMENDMENT SUMMARY
April 23, 2021
Amendment 1 by Rep. Geller (Line 114): Eliminates public adjuster from the definition of
prohibited advertisement so that the prohibition on advertising that encourages, instructs, or
induces a consumer to contact a contractor or public adjuster for the purpose of making an
insurance claim for roof damage no longer applies to public adjusters.
Amendment 2 by Rep. Geller (Line 1316): Prohibits an insurer from applying a rate change to
any homeowners’ policy before December 31, 2021, and requires homeowners’ policy rates to
decrease by 6.2 percent during 2022, 2023, and 2024.
Amendment 3 by Rep. Rommel (Line 1016): Clarifies in the existing one-way attorney fees
statute that attorney fees for property insurance litigation may only be recovered under s.
57.105, s. 627.428(4), and s. 627.70152, F.S.
Amendment 4 by Rep. Rommel (Line 1239): Establishes that a presuit notice is only
admissible as evidence in a proceeding regarding attorney fees rather than for all civil suits and
alternative dispute resolution.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. PCS for CS/HB 305 (2021)
Amendment No. 1
COMMITTEE/SUBCOMMITTEE ACTION
ADOPTED (Y/N)
ADOPTED AS AMENDED (Y/N)
ADOPTED W/O OBJECTION (Y/N)
FAILED TO ADOPT (Y/N)
WITHDRAWN (Y/N)
OTHER
1 Committee/Subcommittee hearing bill: Commerce Committee
2 Representative Geller offered the following:
3
4 Amendment
5 Remove line 114 and insert:
6 a consumer to contact a contractor for the
PCS for CSHB 305 a1
Published On: 4/22/2021 9:31:35 PM
Page 1 of 1
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. PCS for CS/HB 305 (2021)
Amendment No. 2
COMMITTEE/SUBCOMMITTEE ACTION
ADOPTED (Y/N)
ADOPTED AS AMENDED (Y/N)
ADOPTED W/O OBJECTION (Y/N)
FAILED TO ADOPT (Y/N)
WITHDRAWN (Y/N)
OTHER
1 Committee/Subcommittee hearing bill: Commerce Committee
2 Representative Geller offered the following:
3
4 Amendment (with title amendment)
5 Between lines 1316 and 1317, insert:
6 Section 16. Before December 31, 2021, a property insurer
7 may not apply any rate change to an HO-3, HO-4, or HO-6 policy.
8 During 2022, 2023, and 2024, the rate paid by a policyholder for
9 an HO-3, HO-4, or HO-6 policy must decrease by at least 6.2
10 percent per year compared to a similar property insurance policy
11 from the previous year with substantially the same coverage. The
12 6.2 percent rate reduction may be provided through rate
13 decreases, discounts, or credits toward the insurance policy
14 issued or renewed in years 2022, 2023, and 2024.
15
16 -----------------------------------------------------
PCS for CSHB 305 a2
Published On: 4/22/2021 9:34:18 PM
Page 1 of 2
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. PCS for CS/HB 305 (2021)
Amendment No. 2
17 T I T L E A M E N D M E N T
18 Between lines 103 and 104, insert:
19 prohibiting rate changes in property insurance for
20 certain policies before a specified date; requiring a
21 minimum percent in policy rate reduction for specified
22 years; providing possible types of rate reduction;
PCS for CSHB 305 a2
Published On: 4/22/2021 9:34:18 PM
Page 2 of 2
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. PCS for CS/HB 305 (2021)
Amendment No. 3
COMMITTEE/SUBCOMMITTEE ACTION
ADOPTED (Y/N)
ADOPTED AS AMENDED (Y/N)
ADOPTED W/O OBJECTION (Y/N)
FAILED TO ADOPT (Y/N)
WITHDRAWN (Y/N)
OTHER
1 Committee/Subcommittee hearing bill: Commerce Committee
2 Representative Rommel offered the following:
3
4 Amendment
5 Remove lines 1016-1017 and insert:
6 (4) Notwithstanding any other provisions of law, in a suit
7 arising under a residential or commercial property insurance
8 policy not brought by an assignee, attorney fees and costs may
9 be recovered by a claimant only under s. 57.105, s. 627.70152,
10 and this subsection. In an award of attorney fees under this
11 subsection, upon the
PCS for CSHB 305 a3
Published On: 4/22/2021 9:36:15 PM
Page 1 of 1
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. PCS for CS/HB 305 (2021)
Amendment No. 4
COMMITTEE/SUBCOMMITTEE ACTION
ADOPTED (Y/N)
ADOPTED AS AMENDED (Y/N)
ADOPTED W/O OBJECTION (Y/N)
FAILED TO ADOPT (Y/N)
WITHDRAWN (Y/N)
OTHER
1 Committee/Subcommittee hearing bill: Commerce Committee
2 Representative Rommel offered the following:
3
4 Amendment
5 Remove lines 1239-1244 and insert:
6 (6) ADMISSIBILITY OF NOTICE AND RESPONSE.—The notice
7 provided pursuant to subsection (3) and, if applicable, the
8 documentation to support the information provided in the notice:
9 (a) Are admissible as evidence only in a proceeding
10 regarding attorney fees.
11
PCS for CSHB 305 a4
Published On: 4/22/2021 9:37:08 PM
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