Bill Text: FL H1187 | 2011 | Regular Session | Introduced

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Bill Title: Civil Remedies Against Insurers

Spectrum: Partisan Bill (Republican 2-0)

Status: (Introduced - Dead) 2011-05-07 - Indefinitely postponed and withdrawn from consideration [H1187 Detail]

Download: Florida-2011-H1187-Introduced.html

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HB 1187

1	A bill to be entitled
2	An act relating to civil remedies against insurers;
3	amending s. 624.155, F.S.; revising provisions relating to
4	civil actions against insurers; providing a definition;
5	revising the grounds for bringing an action based on the
6	insurer's failure to accept an offer to settle within
7	policy limits; providing who may bring such an action;
8	providing requirements for bringing such an action;
9	providing for the release of an insured if the insurer
10	offers to settle a third-party claim within a specified
11	time under certain circumstances; providing that the
12	insurer has an affirmative defense if a third-party
13	claimant or the insured fails to cooperate with the
14	insurer; providing that an insurer is not liable for two
15	or more claims that exceed the policy limits if it files
16	an interpleader action or makes the policy limits
17	available under arbitration; specifying responsibility for
18	the payment of liens; providing that an insurer is not
19	liable for amounts in excess of the policy limits if it
20	makes timely payment of the appraisal amount; providing
21	that certain refusals to act by the insurer are not
22	presumptive evidence of bad faith; revising requirements
23	relating to the preaction notice of a civil action sent to
24	the Department of Financial Regulation and the insurer;
25	specifying work-product protection requirements;
26	prohibiting an award of fees and costs from including any
27	form of multiplier or enhancement; providing that the
28	provisions of the act replace the common law; amending s.
29	627.311, F.S.; conforming a cross-reference; deleting an
30	obsolete provision; amending s. 627.727, F.S.; revising
31	and limiting the damages that are recoverable from an
32	uninsured motorist carrier in a civil action; providing
33	for severability; providing an effective date.
34
35	Be It Enacted by the Legislature of the State of Florida:
36
37	Section 1.  Section 624.155, Florida Statutes, is amended
38	to read:
39	624.155  Civil remedy.-
40	(1)  As used in the section, the term "third-party claim"
41	means a claim against an insured, by one other than the insured,
42	on account of harm or damage allegedly caused by an insured and
43	covered by a policy of liability insurance.
44	(2)(1)  Any person may bring a civil action against an
45	insurer if when such person is damaged:
46	(a)  By the insurer's a violation of any of the following
47	provisions by the insurer:
48	1.  Section 626.9541(1)(i), (o), or (x);
49	2.  Section 626.9551;
50	3.  Section 626.9705;
51	4.  Section 626.9706;
52	5.  Section 626.9707; or
53	6.  Section 627.7283.
54	(b)  By the insurer's commission of any of the following
55	acts by the insurer:
56	1.  Acting in gross disregard of the insured's interest by
57	failing to accept a Not attempting in good faith written demand
58	to settle claims within the policy limits if when, under all the
59	circumstances existing at the relevant time, it could and should
60	have done so, had it acted fairly and honestly toward its
61	insured and with due regard for her or his interests;
62	2.  Making claims payments to insureds or beneficiaries not
63	accompanied by a statement setting forth the coverage under
64	which payments are being made; or
65	3.  Except as to liability coverages, failing to promptly
66	settle claims, when the obligation to settle a claim has become
67	reasonably clear, under one portion of the insurance policy
68	coverage in order to influence settlements under other portions
69	of the insurance policy coverage.
70
71	Notwithstanding the provisions of the above to the contrary, a
72	person pursuing a remedy under this section need not prove that
73	such act was committed or performed with such frequency as to
74	indicate a general business practice.
75	(3)  If a civil action is brought against an insurer
76	pursuant to subparagraph (2)(b)1.:
77	(a)  Only an insured or the insured's assignee may bring
78	such an action.
79	(b)  With respect to a third-party claim, an insurer does
80	not violate the duty set forth in subparagraph (2)(b)1. if the
81	third-party claimant does not provide a demand to settle which:
82	1.  Is in writing, signed by the third-party claimant or
83	the claimant's authorized representative, and delivered to the
84	insurer and the insured;
85	2.  States that it is a demand to settle made pursuant to
86	this section;
87	3.  States a specified amount within the insured's policy
88	limits for which the third-party claimant offers to settle its
89	claim in full and to release the insured from liability;
90	4.  Is limited to one claimant and one line of coverage or,
91	if not so limited, separately designates a demand for each
92	claimant and each line of coverage, each of which may be
93	accepted independently;
94	5.  Is submitted by a person having the legal authority to
95	accept payment and to execute the release;
96	6.  Does not contain any conditions for acceptance other
97	than payment of the specific amount demanded and compliance with
98	the disclosure requirements of s. 627.4137; and
99	7.  Includes a detailed explanation of the coverage and
100	liability issues and the facts giving rise to the claim,
101	including an explanation of injuries and damages claimed; the
102	names of known witnesses; and a listing and copy, if available,
103	of relevant documents, including medical records, which are
104	available to the third-party claimant or authorized
105	representative at the time of the demand to settle. The third-
106	party claimant and his or her representatives have a continuing
107	duty to supplement this information as it becomes available.
108	(c)  With respect to a third-party claim, an insurer does
109	not violate the duty set forth in subparagraph (2)(b)1. if,
110	within 60 days after the insurer's receipt of the third-party
111	claimant's written demand to settle, or within 90 days after the
112	insurer's receipt of the notice of the claim, whichever is
113	later, the insurer offers to pay the lesser of:
114	1.  The amount requested in the third-party claimant's
115	written demand to settle; or
116	2.  The insured's policy limits, in exchange for a release
117	of liability.
118	(d)  An insurer has an affirmative defense to any such
119	action if the third-party claimant, the insured, or their
120	representatives fail to fully cooperate in providing all
121	relevant information and in presenting the claim.
122	(4)  Notwithstanding subsection (3), if two or more third-
123	party claimants make competing claims arising out of a single
124	occurrence, which in total exceed the available policy limits of
125	one or more of the insured parties who may be liable to the
126	third-party claimants, an insurer is not liable beyond the
127	available policy limits for failure to pay all or any portion of
128	the available policy limits to one or more of the third-party
129	claimants if, within 90 days after receiving notice of the
130	competing claims in excess of the available policy limits, the
131	insurer:
132	(a)  Files an interpleader action under the Florida Rules
133	of Civil Procedure. If the claims of the competing third-party
134	claimants are found to be in excess of the policy limits, the
135	third-party claimants are entitled to a prorated share of the
136	policy limits as determined by the trier of fact. An insurer's
137	interpleader action does not alter or amend the insurer's
138	obligation to defend its insured; or
139	(b)  Pursuant to binding arbitration, makes the entire
140	amount of the policy limits available for payment to the
141	competing third-party claimants before a qualified arbitrator
142	selected by the insurer at the expense of the insurer. The
143	third-party claimants are entitled to a prorated share of the
144	policy limits as determined by the arbitrator, who shall
145	consider the comparative fault, if any, of each third-party
146	claimant, and the total likely outcome at trial based upon the
147	total of the economic and noneconomic damages submitted to the
148	arbitrator for consideration. A third-party claimant whose claim
149	is resolved by the arbitrator shall execute and deliver a
150	general release to the insured party whose claim is resolved by
151	the proceeding.
152	(5)  After settlement of a third-party claim, the third-
153	party claimant's attorney is responsible for the satisfaction of
154	any liens from the settlement funds to the extent such
155	settlement funds are sufficient. If the third-party claimant is
156	not represented by counsel, the third-party claimant shall
157	provide the insurer with a written accounting of all outstanding
158	liens.
159	(6)  An insurer is not liable for amounts in excess of the
160	policy limits or of the award, whichever is less, if it makes
161	timely payment of an appraisal award.
162	(7)  The fact that the insurer does not accept a demand to
163	settle or offer policy limits under paragraph (3)(c), pay an
164	appraisal award under subsection (6), or file an interpleader
165	action or make policy limits available for arbitration under
166	subsection (4) during the times specified does not give rise to
167	a presumption that the insurer acted in bad faith.
168	(8)(2)  Any party may bring a civil action against an
169	unauthorized insurer if such party is damaged by a violation of
170	s. 624.401 by the unauthorized insurer.
171	(9)(3)(a)  Except for an action relating to a third-party
172	claim, as a condition precedent to bringing an action under this
173	section, the department and the authorized insurer must be have
174	been given 60 days' written notice of the violation. If the
175	department returns a notice for lack of specificity, the 60-day
176	time period does shall not begin until a proper notice is filed.
177	(a)(b)  The notice shall be on a form provided by the
178	department, sent by certified mail to the claim handler if known
179	or, if unknown, to the specific office handling the claim, and
180	shall state with specificity the following information, and such
181	other information as the department may require:
182	1.  The statutory provision, including the specific
183	language of the statute, which the authorized insurer allegedly
184	violated.
185	2.  The facts and circumstances reasonably known to the
186	insurer giving rise to the violation, stated with specificity,
187	and the corrective action that the insurer needs to take to
188	remedy the alleged violation.
189	3.  The name of any individual involved in the violation.
190	4.  Reference to specific policy language that is relevant
191	to the violation, if any. If the person bringing the civil
192	action is a third party claimant, she or he shall not be
193	required to reference the specific policy language if the
194	authorized insurer has not provided a copy of the policy to the
195	third party claimant pursuant to written request.
196	5.  A statement that the notice is given in order to
197	perfect the right to pursue the civil remedy authorized by this
198	section.
199	6.  Such other information as the department may require.
200	(b)(c)  Within 20 days after of receipt of the notice, the
201	department may return any notice that does not provide the
202	specific information required by this section, and the
203	department shall indicate the specific deficiencies contained in
204	the notice. A determination by the department to return a notice
205	for lack of specificity is shall be exempt from the requirements
206	of chapter 120.
207	(c)(d)  No action shall lie if, within 60 days after filing
208	notice, the damages are paid or the circumstances giving rise to
209	the violation are corrected.
210	(d)(e)  The authorized insurer that is the recipient of the
211	a notice must filed pursuant to this section shall report to the
212	department on the disposition of the alleged violation.
213	(e)(f)  The applicable statute of limitations for an action
214	under this section is shall be tolled for a period of 65 days by
215	the mailing of the notice required by this subsection or the
216	mailing of a subsequent notice required by this subsection.
217	(10)  With respect to:
218	(a)  A first-party claim, the insurer does not owe a
219	fiduciary duty to the insured and retains the right to protect
220	materials covered by the work-product privilege found within the
221	claim processing file. The privilege must yield to inspection if
222	an appropriate showing is made under the Florida Rules of Civil
223	Procedure. The attorney-client privilege remains absolute.
224	(b)  A third-party claim, until a claim or action for
225	payment on a policy of insurance is final, all files of an
226	insurer, including papers, communications, investigatory
227	reports, or other documents in the insurer's files are the
228	insurer's work product and immune from production or discovery.
229	Thereafter, discovery shall be determined in accordance with the
230	Florida Rules of Civil Procedure. Communications between an
231	insurer and its counsel which are protected under s. 90.502
232	remain protected.
233	(11)(4)  Upon adverse adjudication at trial or upon appeal,
234	the authorized insurer is shall be liable for damages, together
235	with court costs and reasonable attorney's fees incurred by the
236	plaintiff. An award of fees and costs may not include any form
237	of multiplier or enhancement.
238	(12)(5)  No Punitive damages may not shall be awarded under
239	this section unless the acts giving rise to the violation occur
240	with such frequency as to indicate a general business practice
241	and these acts are:
242	(a)  Willful, wanton, and malicious;
243	(b)  In reckless disregard for the rights of any insured;
244	or
245	(c)  In reckless disregard for the rights of a beneficiary
246	under a life insurance contract.
247
248	Any person who pursues a claim under this subsection must shall
249	post in advance the costs of discovery. Such costs shall be
250	awarded to the authorized insurer if no punitive damages are not
251	awarded to the plaintiff.
252	(13)(6)  This section does shall not be construed to
253	authorize a class action suit against an authorized insurer or a
254	civil action against the commission, the office, or the
255	department or any of their employees, or to create a cause of
256	action if when an authorized health insurer refuses to pay a
257	claim for reimbursement on the ground that the charge for a
258	service was unreasonably high or that the service provided was
259	not medically necessary.
260	(14)(7)  In the absence of expressed language to the
261	contrary, This section does shall not be construed to authorize
262	a civil action or create a cause of action against an authorized
263	insurer or its employees who, in good faith, release information
264	about an insured or an insurance policy to a law enforcement
265	agency in furtherance of an investigation of a criminal or
266	fraudulent act relating to a motor vehicle theft or a motor
267	vehicle insurance claim.
268	(15)  The civil remedies specified in this section are the
269	sole remedies and causes of action for extracontractual damages
270	for bad-faith failure to settle under an insurance contract. Any
271	related common-law causes of action are replaced and superseded
272	by this section. The provisions of this section apply to all
273	cases brought pursuant to this section unless specifically
274	controlled by s. 766.1185.
275	(8)  The civil remedy specified in this section does not
276	preempt any other remedy or cause of action provided for
277	pursuant to any other statute or pursuant to the common law of
278	this state. Any person may obtain a judgment under either the
279	common-law remedy of bad faith or this statutory remedy, but
280	shall not be entitled to a judgment under both remedies. This
281	section shall not be construed to create a common-law cause of
282	action. The damages recoverable pursuant to this section shall
283	include those damages which are a reasonably foreseeable result
284	of a specified violation of this section by the authorized
285	insurer and may include an award or judgment in an amount that
286	exceeds the policy limits.
287	(16)(9)  A surety issuing a payment or performance bond on
288	the construction or maintenance of a building or roadway project
289	is not an insurer for purposes of subsection (2) (1).
290	Section 2.  Paragraph (k) of subsection (3) of section
291	627.311, Florida Statutes, is amended to read:
292	627.311  Joint underwriters and joint reinsurers; public
293	records and public meetings exemptions.-
294	(3)  The office may, after consultation with insurers
295	licensed to write automobile insurance in this state, approve a
296	joint underwriting plan for purposes of equitable apportionment
297	or sharing among insurers of automobile liability insurance and
298	other motor vehicle insurance, as an alternate to the plan
299	required in s. 627.351(1). All insurers authorized to write
300	automobile insurance in this state shall subscribe to the plan
301	and participate therein. The plan shall be subject to continuous
302	review by the office which may at any time disapprove the entire
303	plan or any part thereof if it determines that conditions have
304	changed since prior approval and that in view of the purposes of
305	the plan changes are warranted. Any disapproval by the office
306	shall be subject to the provisions of chapter 120. The Florida
307	Automobile Joint Underwriting Association is created under the
308	plan. The plan and the association:
309	(k)1.  Shall have no liability, and no cause of action of
310	any nature shall arise against any member insurer or its agents
311	or employees, agents or employees of the association, members of
312	the board of governors of the association, the Chief Financial
313	Officer, or the office or its representatives for any action
314	taken by them in the performance of their duties or
315	responsibilities under this subsection. Such immunity does not
316	apply to actions for or arising out of a breach of any contract
317	or agreement pertaining to insurance, or any willful tort.
318	2.  Notwithstanding the requirements of s. 624.155(3)(a),
319	as a condition precedent to bringing an action against the plan
320	under s. 624.155, the department and the plan must have been
321	given 90 days' written notice of the violation. If the
322	department returns a notice for lack of specificity, the 90-day
323	time period shall not begin until a proper notice is filed. This
324	notice must comply with the information requirements of s.
325	624.155(3)(b). Effective October 1, 2007, this subparagraph
326	shall expire unless reenacted by the Legislature prior to that
327	date.
328	Section 3.  Subsection (10) of section 627.727, Florida
329	Statutes, is amended to read:
330	627.727  Motor vehicle insurance; uninsured and
331	underinsured vehicle coverage; insolvent insurer protection.-
332	(10)  The damages recoverable from an uninsured motorist
333	carrier in an action brought under s. 624.155 shall include the
334	total amount of the claimant's damages, including the amount in
335	excess of the policy limits but not exceeding two times the
336	policy limits, any interest on unpaid benefits, and reasonable
337	attorney's fees and costs, and any damages caused by a violation
338	of a law of this state. The total amount of the claimant's
339	damages is recoverable whether caused by an insurer or by a
340	third-party tortfeasor.
341	Section 4.  If any provision of this act or its application
342	to any person or circumstance is held invalid, the invalidity
343	does not affect other provisions or applications of the act
344	which can be given effect without the invalid provision or
345	application, and to this end the provisions of this act are
346	severable.
347	Section 5.  This act shall take effect July 1, 2011.

CODING: Words stricken are deletions; words underlined are additions.