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| 8 | 8 | | hb1439-00 |
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| 9 | 9 | | Page 1 of 9 |
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| 10 | 10 | | 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 |
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| 14 | 14 | | A bill to be entitled 1 |
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| 15 | 15 | | An act relating to the resolution of disputed property 2 |
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| 16 | 16 | | insurance claims; amending s. 627.7015, F.S.; 3 |
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| 17 | 17 | | requiring, rather than authorizing, parties to a 4 |
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| 18 | 18 | | property insurance claims dispute to participate in 5 |
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| 19 | 19 | | mediation; providing that mediation is a condition 6 |
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| 20 | 20 | | precedent to commencing litigation; deleting 7 |
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| 21 | 21 | | provisions relating to the eligibility of claims for 8 |
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| 22 | 22 | | mediation; providing that the parties may mutually 9 |
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| 23 | 23 | | agree to conduct the mediation by teleconference or by 10 |
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| 24 | 24 | | telephone; requiring all insureds, or a representative 11 |
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| 25 | 25 | | thereof, to personally attend the mediation; revising 12 |
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| 26 | 26 | | and specifying duties as to bearing certain costs of 13 |
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| 27 | 27 | | mediation; requiring, rather than authorizing, the 14 |
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| 28 | 28 | | Department of Financial Services to adopt certain 15 |
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| 29 | 29 | | rules; authorizing the department to adopt certain 16 |
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| 30 | 30 | | emergency rules; requiring the policyholder to provide 17 |
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| 31 | 31 | | the insurer with certain documents within a certain 18 |
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| 32 | 32 | | timeframe after mediation is invoked; revising 19 |
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| 33 | 33 | | conditions under which a policyholder has a certain 20 |
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| 34 | 34 | | timeframe to rescind a settlement; revising the 21 |
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| 35 | 35 | | definition of the term "claim"; providing and revising 22 |
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| 36 | 36 | | construction; amending s. 627.7074, F.S.; conforming a 23 |
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| 37 | 37 | | provision to changes made by the act; providing an 24 |
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| 38 | 38 | | appropriation; providing effective dates. 25 |
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| 40 | 40 | | HB 1439 2024 |
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| 46 | 46 | | Page 2 of 9 |
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| 47 | 47 | | 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 |
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| 51 | 51 | | 26 |
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| 52 | 52 | | Be It Enacted by the Legislature of the State of Florida: 27 |
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| 53 | 53 | | 28 |
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| 54 | 54 | | Section 1. Section 627.7015, Florida Statutes, is amended 29 |
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| 55 | 55 | | to read: 30 |
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| 56 | 56 | | 627.7015 Mandatory mediation Alternative procedure for 31 |
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| 57 | 57 | | resolution of disputed property insurance claims. — 32 |
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| 58 | 58 | | (1) This section sets forth a nonadversarial alternative 33 |
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| 59 | 59 | | dispute resolution procedure for a mediated claim resolution 34 |
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| 60 | 60 | | conference prompted by the need for effective, fair, and timely 35 |
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| 61 | 61 | | handling of property insurance claims. There is a particular 36 |
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| 62 | 62 | | need for an informal, nonthreatening forum for helping parties 37 |
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| 63 | 63 | | who elect this procedure to resolve their claims disputes 38 |
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| 64 | 64 | | because most homeowner and commercial residential insurance 39 |
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| 65 | 65 | | policies obligate policyholders to participate in a potentially 40 |
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| 66 | 66 | | expensive and time-consuming adversarial appraisal process 41 |
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| 67 | 67 | | before litigation. The procedure set forth in this section is 42 |
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| 68 | 68 | | designed to bring the parties together for a mediated claims 43 |
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| 69 | 69 | | settlement conference without any of the trappings or drawback s 44 |
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| 70 | 70 | | of an adversarial process. Before resorting to these procedures, 45 |
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| 71 | 71 | | policyholders and insurers are encouraged to resolve claims as 46 |
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| 72 | 72 | | quickly and fairly as possible. This section applies is 47 |
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| 73 | 73 | | available with respect to claims under personal lines and 48 |
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| 74 | 74 | | commercial residential policies before commencing the appraisal 49 |
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| 75 | 75 | | process and is a condition precedent to , or before commencing 50 |
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| 83 | 83 | | Page 3 of 9 |
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| 84 | 84 | | 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 |
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| 85 | 85 | | |
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| 87 | 87 | | |
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| 88 | 88 | | litigation. Mediation may be requested only by the policyholder, 51 |
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| 89 | 89 | | as a first-party claimant, a third -party, as an assignee of the 52 |
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| 90 | 90 | | policy benefits, or the insurer. However, an insurer is not 53 |
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| 91 | 91 | | required to participate in any mediation requested by a third -54 |
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| 92 | 92 | | party assignee of the policy benefits. If requested by the 55 |
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| 93 | 93 | | policyholder, Participation by legal counsel is permitted. 56 |
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| 94 | 94 | | Mediation under this section is also required of available to 57 |
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| 95 | 95 | | litigants referred to the department by a county court or 58 |
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| 96 | 96 | | circuit court. This section does not apply to commercial 59 |
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| 97 | 97 | | coverages, to private passenger motor vehicle insurance 60 |
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| 98 | 98 | | coverages, or to disputes relating to liability cove rages in 61 |
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| 99 | 99 | | policies of property insurance. 62 |
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| 100 | 100 | | (2) At the time of issuance and renewal of a policy or at 63 |
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| 101 | 101 | | the time a first-party claim within the scope of this section is 64 |
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| 102 | 102 | | filed by the policyholder, the insurer shall notify the 65 |
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| 103 | 103 | | policyholder of its right to participate in the mandatory 66 |
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| 104 | 104 | | mediation program under this section. A claim becomes eligible 67 |
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| 105 | 105 | | for mediation after the insurer complies with s. 627.70131(7) or 68 |
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| 106 | 106 | | elects to reinspect pursuant to s. 627.70152(4)(a)3. If the 69 |
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| 107 | 107 | | insurer has not complied with s. 627.70131(7 ) or elected to 70 |
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| 108 | 108 | | reinspect pursuant to s. 627.70152(4)(a)3. within 90 days after 71 |
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| 109 | 109 | | notice of the loss, the insurer may not require mediation under 72 |
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| 110 | 110 | | this section. This subsection does not impair the right of an 73 |
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| 111 | 111 | | insurance company to request mediation after a det ermination of 74 |
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| 112 | 112 | | coverage pursuant to this section or require appraisal or 75 |
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| 121 | 121 | | 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 |
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| 122 | 122 | | |
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| 124 | 124 | | |
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| 125 | 125 | | another method of alternative dispute resolution pursuant to s. 76 |
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| 126 | 126 | | 627.70152(4)(b). The department shall prepare a consumer 77 |
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| 127 | 127 | | information pamphlet for distribution to persons participating 78 |
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| 128 | 128 | | in mediation. 79 |
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| 129 | 129 | | (3) If the parties mutually agree, mediation may be 80 |
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| 130 | 130 | | conducted by teleconference or by telephone in lieu of appearing 81 |
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| 131 | 131 | | in person. All named insureds, or a representative thereof, must 82 |
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| 132 | 132 | | personally attend the mediation, regardless of how it is 83 |
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| 133 | 133 | | conducted. The costs of mediation must be reasonable, and the 84 |
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| 134 | 134 | | insurer must bear all of the cost of conducting mediation 85 |
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| 135 | 135 | | conferences, except as otherwise provided in this section. If a 86 |
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| 136 | 136 | | named insured or his or her representative policyholder fails to 87 |
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| 137 | 137 | | appear at the conference, thus preventing the mediation from 88 |
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| 138 | 138 | | proceeding, the conference must be rescheduled upon the 89 |
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| 139 | 139 | | policyholder's payment of the costs of a rescheduled conference. 90 |
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| 140 | 140 | | If the insurer fails to appear at the conference, the insurer 91 |
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| 141 | 141 | | must pay the policyh older's actual cash expenses incurred in 92 |
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| 142 | 142 | | attending the conference if the insurer's failure to attend was 93 |
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| 143 | 143 | | not due to a good cause acceptable to the department. An insurer 94 |
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| 144 | 144 | | is will be deemed to have failed to appear if the insurer's 95 |
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| 145 | 145 | | representative lacks autho rity to settle the full value of the 96 |
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| 146 | 146 | | claim. The insurer shall incur an additional fee for a 97 |
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| 147 | 147 | | rescheduled conference necessitated by the insurer's failure to 98 |
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| 148 | 148 | | appear at a scheduled conference. The fees assessed by the 99 |
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| 149 | 149 | | department must include a charge necessar y to defray the 100 |
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| 158 | 158 | | 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 |
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| 162 | 162 | | expenses of the department related to its duties under this 101 |
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| 163 | 163 | | section and must be deposited in the Insurance Regulatory Trust 102 |
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| 164 | 164 | | Fund. The department may suspend the insurer's authority to 103 |
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| 165 | 165 | | appoint licensees if the insurer does not timely pay the 104 |
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| 166 | 166 | | required fees. If a party elects to request an expert or a 105 |
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| 167 | 167 | | representative to attend the mediation, that party must bear any 106 |
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| 168 | 168 | | costs for the attendance of the expert or representative. 107 |
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| 169 | 169 | | (4) The department shall adopt by rule a property 108 |
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| 170 | 170 | | insurance mediation p rogram to be administered by the department 109 |
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| 171 | 171 | | or its designee. The department shall may also adopt special 110 |
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| 172 | 172 | | rules that which are applicable in cases of an emergency within 111 |
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| 173 | 173 | | this the state, including emergency rules as necessary to 112 |
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| 174 | 174 | | establish physical addresses for the mediation program in areas 113 |
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| 175 | 175 | | affected by natural disasters . The rules shall be modeled after 114 |
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| 176 | 176 | | practices and procedures set forth in mediation rules of 115 |
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| 177 | 177 | | procedure adopted by the Supreme Court. The rules shall provide 116 |
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| 178 | 178 | | for: 117 |
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| 179 | 179 | | (a) Reasonable requirements requirement for processing and 118 |
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| 180 | 180 | | scheduling of requests for mediation. 119 |
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| 181 | 181 | | (b) Qualifications and, denial of application, suspension, 120 |
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| 182 | 182 | | revocation of approval, and other penalties for mediators as 121 |
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| 183 | 183 | | provided in s. 627.745 and the Florida Rules for Certified and 122 |
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| 184 | 184 | | Court-Appointed Mediators. 123 |
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| 185 | 185 | | (c) Provisions governing who may attend mediation 124 |
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| 186 | 186 | | conferences. 125 |
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| 194 | 194 | | Page 6 of 9 |
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| 195 | 195 | | 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 |
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| 196 | 196 | | |
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| 197 | 197 | | |
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| 198 | 198 | | |
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| 199 | 199 | | (d) Selection of mediators. 126 |
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| 200 | 200 | | (e) Criteria for the conduct of mediation conferences. 127 |
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| 201 | 201 | | (f) Right to legal counsel. 128 |
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| 202 | 202 | | (5)(a) All statements made and documents produce d at a 129 |
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| 203 | 203 | | mediation conference shall be deemed to be settlement 130 |
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| 204 | 204 | | negotiations in anticipation of litigation within the scope of 131 |
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| 205 | 205 | | s. 90.408. All parties to the mediation must negotiate in good 132 |
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| 206 | 206 | | faith and must have the authority to immediately settle the 133 |
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| 207 | 207 | | claim. Mediators are deemed to be agents of the department and 134 |
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| 208 | 208 | | shall have the immunity from suit provided in s. 44.107. 135 |
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| 209 | 209 | | (b) Within 10 days after mediation is invoked, the 136 |
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| 210 | 210 | | policyholder must provide to the insurer any supporting 137 |
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| 211 | 211 | | documents and information that serve as the basis for the claim. 138 |
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| 212 | 212 | | (6)(a) Mediation is nonbinding; however, if a written 139 |
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| 213 | 213 | | settlement is reached and the policyholder is not represented by 140 |
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| 214 | 214 | | an attorney or a public adjuster , the policyholder has 3 141 |
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| 215 | 215 | | business days within which the policyholder may r escind the 142 |
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| 216 | 216 | | settlement unless the policyholder has cashed or deposited any 143 |
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| 217 | 217 | | check or draft disbursed to the policyholder for the disputed 144 |
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| 218 | 218 | | matters as a result of the conference. If a settlement agreement 145 |
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| 219 | 219 | | is reached and is not rescinded, it is binding and acts as a 146 |
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| 220 | 220 | | release of all specific claims that were presented in that 147 |
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| 221 | 221 | | mediation conference. 148 |
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| 222 | 222 | | (b) At the conclusion of the mediation, the mediator shall 149 |
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| 223 | 223 | | provide a written report of the results of mediation, including 150 |
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| 232 | 232 | | 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 |
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| 233 | 233 | | |
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| 234 | 234 | | |
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| 235 | 235 | | |
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| 236 | 236 | | any settlement amount, to the insurer, the p olicyholder, and the 151 |
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| 237 | 237 | | policyholder's representative if the policyholder is represented 152 |
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| 238 | 238 | | at the mediation. 153 |
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| 239 | 239 | | (7) If the insurer fails to comply with subsection (2) by 154 |
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| 240 | 240 | | failing to notify a policyholder of its right to participate in 155 |
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| 241 | 241 | | the mediation program under this section or if the insurer 156 |
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| 242 | 242 | | requests the mediation, and the mediation results are rejected 157 |
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| 243 | 243 | | by either party, the policyholder is not required to submit to 158 |
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| 244 | 244 | | or participate in any contractual loss appraisal process of the 159 |
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| 245 | 245 | | property loss damage as a precondit ion to legal action for 160 |
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| 246 | 246 | | breach of contract against the insurer for its failure to pay 161 |
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| 247 | 247 | | the policyholder's claims covered by the policy. 162 |
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| 248 | 248 | | (8) The department may designate an entity or person to 163 |
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| 249 | 249 | | serve as administrator to carry out any of the provisions of 164 |
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| 250 | 250 | | this section and may take this action by means of a written 165 |
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| 251 | 251 | | contract or agreement. 166 |
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| 252 | 252 | | (9) For purposes of this section, the term "claim" refers 167 |
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| 253 | 253 | | to any dispute between an insurer and a policyholder relating to 168 |
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| 254 | 254 | | a material issue of fact other than a dispute: 169 |
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| 255 | 255 | | (a) With respect to which the insurer has a reasonable 170 |
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| 256 | 256 | | basis to suspect fraud; 171 |
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| 257 | 257 | | (b) When the insurer has determined , based on agreed-upon 172 |
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| 258 | 258 | | facts as to the cause of loss, there is no coverage under the 173 |
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| 259 | 259 | | policy; 174 |
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| 260 | 260 | | (c) With respect to which the insurer has a re asonable 175 |
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| 269 | 269 | | 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 |
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| 270 | 270 | | |
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| 271 | 271 | | |
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| 272 | 272 | | |
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| 273 | 273 | | basis to believe that the policyholder has intentionally made a 176 |
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| 274 | 274 | | material misrepresentation of fact which is relevant to the 177 |
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| 275 | 275 | | claim, and the entire request for payment of a loss has been 178 |
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| 276 | 276 | | denied on the basis of the material misrepresentation; 179 |
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| 277 | 277 | | (d) With respect to which the amount in controversy is 180 |
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| 278 | 278 | | less than $500, unless the parties agree to mediate a dispute 181 |
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| 279 | 279 | | involving a lesser amount; or 182 |
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| 280 | 280 | | (e) With respect to a loss that does not comply with s. 183 |
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| 281 | 281 | | 627.70132. 184 |
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| 282 | 282 | | (10) Participation in mediation under this section before 185 |
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| 283 | 283 | | the policyholder's filing of a notice under s. 627.70152 does 186 |
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| 284 | 284 | | not prohibit or waive an insurer's right to invoke and 187 |
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| 285 | 285 | | participate in mediation under this section in response to the 188 |
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| 286 | 286 | | notice. 189 |
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| 287 | 287 | | Section 2. Subsection (3) of section 627.7074, Florida 190 |
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| 288 | 288 | | Statutes, is amended to read: 191 |
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| 289 | 289 | | 627.7074 Alternative procedure for resolution of disputed 192 |
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| 290 | 290 | | sinkhole insurance claims. — 193 |
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| 291 | 291 | | (3) If there is coverage available under the policy and 194 |
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| 292 | 292 | | the claim was submitted within the timeframe provided in s. 195 |
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| 293 | 293 | | 627.706(5), following the receipt of the report provided under 196 |
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| 294 | 294 | | s. 627.7073 or the denial of a claim for a sinkhole loss, the 197 |
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| 295 | 295 | | insurer shall notify the policyholder of his or her right to 198 |
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| 296 | 296 | | participate in the neutral evaluation program under this 199 |
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| 297 | 297 | | section. Neutral evaluati on supersedes the mediation alternative 200 |
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| 306 | 306 | | 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 |
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| 307 | 307 | | |
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| 308 | 308 | | |
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| 309 | 309 | | |
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| 310 | 310 | | dispute resolution process under s. 627.7015 but does not 201 |
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| 311 | 311 | | invalidate the appraisal clause of the insurance policy. The 202 |
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| 312 | 312 | | insurer shall provide to the policyholder the consumer 203 |
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| 313 | 313 | | information pamphlet prepared by the depar tment pursuant to 204 |
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| 314 | 314 | | subsection (1) electronically or by United States mail. 205 |
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| 315 | 315 | | Section 3. Effective July 1, 2024, for the 2024 -2025 206 |
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| 316 | 316 | | fiscal year, the sum of $1 million in recurring funds is 207 |
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| 317 | 317 | | appropriated from the Insurance Regulatory Trust Fund to the 208 |
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| 318 | 318 | | Department of Financial Services for the purpose of 209 |
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| 319 | 319 | | administering the amendment made by this act to s. 627.7015, 210 |
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| 320 | 320 | | Florida Statutes. 211 |
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| 321 | 321 | | Section 4. Except as otherwise expressly provided in this 212 |
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| 322 | 322 | | act and except for this section, which shall take effect July 1, 213 |
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| 323 | 323 | | 2024, this act shall take effect January 1, 2025. 214 |
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