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A bill to be entitled 1
An act relating to court judgment interest rates and 2
insurance reports and practices; amending s. 55.03, 3
F.S.; revising the calculation that the Chief 4
Financial Officer performs to set the rate of interest 5
payable on judgments or decrees; amending s. 624.3 15, 6
F.S.; providing legislative findings; requiring the 7
Office of Insurance Regulation of the Financial 8
Services Commission to create specified reports on 9
insurance-related entities and compensation of 10
executive officers for insurers, licensees, and 11
registrants; specifying requirements for such reports; 12
requiring the office to publish the reports annually 13
on its website and submit the reports annually to 14
specified entities; requiring the office to use 15
reliable and up-to-date methodology and software to 16
create specified reports and review such and software 17
for accuracy; specifying that certain data is not 18
considered a trade secret and may be used for certain 19
purposes; prohibiting insurers from withholding 20
certain data from the office under certain 21
circumstances; amending s. 627.062, F.S.; revising the 22
factors the office must consider in determining 23
whether an insurance rate is excessive, inadequate, or 24
unfairly discriminatory; amending s. 627.70131, F.S.; 25
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requiring property insurers to send policyholders a 26
written estimate of the amount of loss under certain 27
circumstances; specifying certain requirements for 28
insurers when creating and sending such estimates; 29
prohibiting insureds and insurers from waiving such 30
requirements; amending s. 627.7015, F.S.; conforming 31
provisions to changes made by the act and conforming a 32
cross-reference; amending s. 627.70152, F.S.; revising 33
the manner in which a property insurer must respond to 34
a notice to initiate litigation; requiring a claimant 35
and insurer to participate in mandat ory mediation 36
under certain circumstances; requiring the court to 37
determine attorney fees in a specified manner for 38
cases arising from a property insurance dispute; 39
providing applicability; authorizing the office to 40
impose penalties for violations of certa in provisions; 41
amending s. 627.70154, F.S.; requiring property 42
insurers to disclose to policyholders the dollar 43
amount of a credit or premium discount for a mandatory 44
binding arbitration endorsement; reenacting ss. 45
627.151(1), 627.715(3)(b), and 627.7151(9 )(b), F.S., 46
relating to workers' compensation or employer's 47
liability insurance filings, flood insurance, and 48
sinkhole coverage insurance, respectively, to 49
incorporate the amendment made to s. 627.062, F.S., in 50
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references thereto; providing an effective da te. 51
52
Be It Enacted by the Legislature of the State of Florida: 53
54
Section 1. Subsection (1) of section 55.03, Florida 55
Statutes, is amended to read: 56
55.03 Judgments; rate of interest, generally. — 57
(1) On December 1, March 1, June 1, and September 1 of 58
each year, the Chief Financial Officer shall set the rate of 59
interest that shall be payable on judgments or decrees for the 60
calendar quarter beginning January 1 and adjust the rate 61
quarterly on April 1, July 1, and October 1 by averaging the 62
discount rate of the Federal Reserve Bank of New York for the 63
preceding 12 months, then adding 800 400 basis points to the 64
averaged federal discount rate. The Chief Financial Officer 65
shall inform the clerk of the courts and chief judge for each 66
judicial circuit of the rate that has been established for the 67
upcoming quarter. The interest rate established by the Chief 68
Financial Officer takes shall take effect on the first day of 69
each following calendar quarter. Judgments obtained on or after 70
January 1, 1995, must shall use the previous statutory rate for 71
time periods before January 1, 1995, for which interest is due 72
and must shall apply the rate set by the Chief Financial Officer 73
for time periods after January 1, 1995, for which interest is 74
due. This subsection does n ot Nothing contained herein shall 75
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affect a rate of interest established by written contract or 76
obligation. 77
Section 2. Present paragraph (c) of subsection (4) of 78
section 624.315, Florida Statutes, is redesignated as paragraph 79
(d), and a new paragraph (c ) is added to that subsection, to 80
read: 81
624.315 Annual reports; quarterly reports. — 82
(4) 83
(c)1. The Legislature finds that the state has a strong 84
and legitimate financial interest in the health and performance 85
of the property and casualty insurance mark et. Further, the 86
costs of property insurance may have a strong impact on the 87
performance of Florida's housing market, to the benefit or 88
detriment of Florida residents. Therefore, it is in the interest 89
of Floridians that the office collect and analyze data regarding 90
market conduct and performance. 91
2. The office shall create a report that, for each 92
insurer, licensee, or registrant, provides a list of related 93
entities, including, but not limited to, subsidiaries, 94
management companies, captive vendors, and re insurers, which 95
share common executive officers, directors, or offices or at 96
least 10 percent common ownership with the insurer, licensee, or 97
registrant. The report must also detail the financial 98
relationship between the entities. The office shall publish the 99
report on its website and submit it to the commission, the 100
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President of the Senate, the Speaker of the House of 101
Representatives, and the legislative committees with 102
jurisdiction over matters of insurance on or before January 31 103
of each year. 104
3. The office shall create a report detailing the 105
compensation of executive officers for each insurer, licensee, 106
or registrant, including, but not limited to, salaries, 107
benefits, stock options, bonuses, stock buybacks, and other 108
taxable payments, expressed both as dollar amounts and as a 109
percentage of the entity's total revenue. The report must 110
include the profits and losses of each entity as reported in its 111
financial statements and highlight any compensation exceeding 112
the industry average. The office shall also in clude in the 113
report any rationale provided by the insurer justifying 114
compensation exceeding the industry average and, for each 115
insurer, an explanation of how specific data gathered during the 116
creation of the report informed the office's decisions on that 117
insurer's rate change requests. The office shall publish the 118
report on its website and submit it to the commission, the 119
President of the Senate, the Speaker of the House of 120
Representatives, and the legislative committees with 121
jurisdiction over matters of in surance on or before January 31 122
of each year. 123
4. To create the reports required under subparagraphs 2. 124
and 3., the office shall use reliable and up -to-date methodology 125
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and software and shall routinely review such methodology and 126
software for accuracy. 127
5. Any data provided by insurers to the office under this 128
paragraph is not considered a trade secret under s. 812.081, and 129
the office may use such data for market analysis, financial 130
assessments, rate-setting, and compliance reviews. Insurers may 131
not withhold any financial and other data requested by the 132
office under this paragraph as being business sensitive or a 133
trade secret. 134
Section 3. Paragraph (b) of subsection (2) of section 135
627.062, Florida Statutes, is amended to read: 136
627.062 Rate standards. — 137
(2) As to all such classes of insurance: 138
(b) Upon receiving a rate filing, the office shall review 139
the filing to determine whether if a rate is excessive, 140
inadequate, or unfairly discriminatory. In making that 141
determination, the office shall, in accor dance with generally 142
accepted and reasonable actuarial techniques, consider the 143
following factors: 144
1. Past and prospective loss experience within and without 145
this state. 146
2. Past and prospective expenses. 147
3. The degree of competition among insurers fo r the risk 148
insured. 149
4. Investment income reasonably expected by the insurer, 150
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consistent with the insurer's investment practices, from 151
investable premiums anticipated in the filing, plus any other 152
expected income from currently invested assets representin g the 153
amount expected on unearned premium reserves and loss reserves. 154
The commission may adopt rules using reasonable techniques of 155
actuarial science and economics to specify the manner in which 156
insurers calculate investment income attributable to classes of 157
insurance written in this state and the manner in which 158
investment income is used to calculate insurance rates. Such 159
manner must contemplate allowances for an underwriting profit 160
factor and full consideration of investment income that produces 161
a reasonable rate of return; however, investment income from 162
invested surplus may not be considered. 163
5. The reasonableness of the judgment reflected in the 164
filing. 165
6. Dividends, savings, or unabsorbed premium deposits 166
allowed or returned to policyholders, membe rs, or subscribers in 167
this state. 168
7. The adequacy of loss reserves. 169
8. The cost of reinsurance. The office may not disapprove 170
a rate as excessive solely due to the insurer having obtained 171
catastrophic reinsurance to cover the insurer's estimated 250 -172
year probable maximum loss or any lower level of loss. 173
9. Trend factors, including trends in actual losses per 174
insured unit for the insurer making the filing. 175
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10. Conflagration and catastrophe hazards, if applicable. 176
11. Projected hurricane losses, if applicable, which must 177
be estimated using a model or method found to be acceptable or 178
reliable by the Florida Commission on Hurricane Loss Projection 179
Methodology, and as further provided in s. 627.0628. 180
12. Projected flood losses for personal residential 181
property insurance, if applicable, which may be estimated using 182
a model or method, or a straight average of model results or 183
output ranges, independently found to be acceptable or reliable 184
by the Florida Commission on Hurricane Loss Projection 185
Methodology and as further provided in s. 627.0628. 186
13. A reasonable margin for underwriting profit and 187
contingencies. 188
14. The cost of medical services, if applicable. 189
15. Any report created by the office pursuant to s. 190
624.315(4). 191
16. Other relevant factors that affect the frequency or 192
severity of claims or expenses. 193
194
The provisions of this subsection do not apply to workers' 195
compensation, employer's liability insurance, and motor vehicle 196
insurance. 197
Section 4. Paragraph (e) of subsection (3) of section 198
627.70131, Florida Statutes, is amended to read: 199
627.70131 Insurer's duty to acknowledge communications 200
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regarding claims; investigation. — 201
(3) 202
(e)1. The insurer shall must send the policyholder a 203
written copy of any detailed estimate of the amount of the loss 204
within 7 days after the estimate is generated by an insurer's 205
adjuster. This paragraph does not require that an insurer create 206
a detailed estimate of the amount of the loss if such estimate 207
is not reasonably necessary as part of the claim investigati on. 208
2. When creating and sending the written loss estimate as 209
required under subparagraph 1., the insurer shall comply with 210
all of the following: 211
a. Adjusters shall use an electronic estimating program to 212
create or modify loss estimates. Such program m ust generate an 213
itemized, per-unit estimate of loss to the property, including, 214
but not limited to, any loss of equipment, materials, labor, or 215
supplies. The program must also generate price data that 216
consists of unit-cost breakdowns consistent with contra ctor or 217
repair company rates in the relevant geographic market area. The 218
price data used by the program must be updated at least monthly 219
to reflect current market data. 220
b. An adjuster may not modify price data unless the 221
adjuster documents that such modi fication is necessary for an 222
accurate estimate and reflects current market data. If the 223
adjuster modifies the loss estimate to reflect actual cash value 224
due to depreciation, such modification must be identified in a 225
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separate line item. 226
c. An adjuster may not modify a loss estimate unless the 227
modified estimate meets all of the following requirements: 228
(I) Clearly identifies all the modifications made to the 229
original estimate. 230
(II) Provides a detailed explanation for each 231
modification. 232
(III) Specifies the identity of the adjuster who makes 233
each modification. 234
d. If an adjuster modifies the loss estimate pursuant to 235
sub-subparagraph c., the insurer must ensure that all versions 236
of the loss estimate are retained for at least 7 years after the 237
claim is resolved. 238
3. The insurer or insured may not waive any requirements 239
of subparagraph 2. 240
Section 5. Subsection (2) of section 627.7015, Florida 241
Statutes, is amended to read: 242
627.7015 Alternative procedure for resolution of disputed 243
property insurance cl aims.— 244
(2) At the time of issuance and renewal of a policy or at 245
the time a first-party claim within the scope of this section is 246
filed by the policyholder, the insurer shall notify the 247
policyholder of its right to participate in the mediation 248
program under this section. A claim becomes eligible for 249
mediation after the insurer complies with s. 627.70131(7) or 250
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elects to reinspect pursuant to s. 627.70152(4)(a)3 . If the 251
insurer has not complied with s. 627.70131(7) or elected to 252
reinspect pursuant to s. 627 .70152(4)(a)3. within 90 days after 253
notice of the loss, the insurer may not require mediation under 254
this section. This subsection does not impair the right of an 255
insurance company to request mediation after a determination of 256
coverage pursuant to this sect ion or require appraisal or 257
another method of alternative dispute resolution pursuant to s. 258
627.70152(4)(c) s. 627.70152(4)(b). The department shall prepare 259
a consumer information pamphlet for distribution to persons 260
participating in mediation. 261
Section 6. Subsection (4) of section 627.70152, Florida 262
Statutes, is amended, and subsections (8) and (9) are added to 263
that section, to read: 264
627.70152 Suits arising under a property insurance 265
policy.— 266
(4) INSURER DUTIES. —An insurer must have a procedure for 267
the prompt investigation, review, and evaluation of the dispute 268
stated in the notice and must investigate each claim contained 269
in the notice in accordance with the Florida Insurance Code. An 270
insurer shall must respond in writing within 10 business days 271
after receiving the notice specified in subsection (3). The 272
insurer must provide the response to the claimant by e -mail if 273
the insured has designated an e -mail address in the notice. 274
(a) If an insurer is responding to a notice served on the 275
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insurer following a denial of coverage by the insurer, the 276
insurer must respond by: 277
1. Accepting the presuit settlement demand coverage; 278
2. Making a counteroffer to the presuit settlement demand 279
Continuing to deny coverage ; or 280
3. Providing a statement that indicates the insurer is 281
declining to respond to the notice Asserting the right to 282
reinspect the damaged property . If the insurer responds by 283
asserting the right to reinspect the damaged property, it has 14 284
business days after the response asserting that right to 285
reinspect the property and accept or continue to deny coverage. 286
The time limits provided in s. 95.11 are tolled during the 287
reinspection period if such time limits expire before the end of 288
the reinspection period. If the insurer continues to deny 289
coverage, the claimant may file suit without providing 290
additional notice to the insurer. 291
(b) After the response provided under paragraph (a), and 292
before initiating litigation, the claimant and insurer must 293
participate in mandatory mediation in the same manner as 294
provided in s. 627.7015 except that the mediation is mandatory 295
and the cost of mediation must be shared equally between the 296
parties, unless otherwise agreed upon. 297
(c)(b) If an insurer is responding to a notice provided to 298
the insurer alleging an act or omi ssion by the insurer other 299
than a denial of coverage, the insurer must respond by making a 300
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settlement offer or requiring the claimant to participate in 301
appraisal or another method of alternative dispute resolution. 302
The time limits provided in s. 95.11 are tolled as long as 303
appraisal or other alternative dispute resolution is ongoing if 304
such time limits expire during the appraisal process or dispute 305
resolution process. If the appraisal or alternative dispute 306
resolution has not been concluded within 90 days a fter the 307
expiration of the 10 -day notice of intent to initiate litigation 308
specified in subsection (3), the claimant or claimant's attorney 309
may immediately file suit without providing the insurer 310
additional notice. 311
(8) ATTORNEY FEES.—In cases arising from a property 312
insurance dispute, the court shall determine attorney fees as 313
provided in this subsection. 314
(a) If the judgment entered is greater than 80 percent of 315
the claimant's presuit settlement demand, the prevailing party's 316
attorney must be awarded 100 percent of the reasonably incurred 317
attorney fees. 318
(b) If the judgment entered is between 20 percent and 80 319
percent, inclusive, of the claimant's presuit settlement demand, 320
the prevailing party's attorney must be awarded the percentage 321
of reasonably incurred attorney fees which is proportional to 322
the percentage of the judgement relative to the presuit demand. 323
(c) If the judgment is less than 20 percent of the 324
claimant's presuit settlement demand, the prevailing party's 325
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attorney may not be awarded attorn ey fees. 326
(d) Paragraphs (a), (b), and (c) do not apply in any of 327
the following circumstances: 328
1. The insurer fails to comply with statutory timelines 329
for responding to claims or engaging in mediation. 330
2. The claimant's demand is deemed reasonable by the 331
court, regardless of judgment outcome. 332
3. The court finds evidence of bad faith or abuse of the 333
litigation process by either party. 334
(9) PENALTIES.—The office may impose any penalty 335
authorized under the Florida Insurance Code on a person who 336
violates this section, including injunctions, fines, and fees. 337
Section 7. Subsection (2) of section 627.70154, Florida 338
Statutes, is amended to read: 339
627.70154 Mandatory binding arbitration. —A property 340
insurance policy issued in this state may not require th at a 341
policyholder participate in mandatory binding arbitration unless 342
all of the following apply: 343
(2) The premium that a policyholder is charged for the 344
policy includes an actuarially sound credit or premium discount 345
for the mandatory binding arbitration endorsement. The insurer 346
shall disclose the dollar amount of such credit or discount when 347
providing a quote to the policyholder. 348
Section 8. For the purpose of incorporating the amendment 349
made by this act to section 627.062, Florida Statutes, in a 350
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reference thereto, subsection (1) of section 627.151, Florida 351
Statutes, is reenacted to read: 352
627.151 Basis of approval or disapproval of workers' 353
compensation or employer's liability insurance filing; scope of 354
disapproval power.— 355
(1) In determining at any time whether to approve or 356
disapprove a filing as to workers' compensation or employer's 357
liability insurance, or to permit the filing otherwise to become 358
effective, the office shall give consideration only to the 359
applicable standards and factors refer red to in ss. 627.062 and 360
627.072. 361
Section 9. For the purpose of incorporating the amendment 362
made by this act to section 627.062, Florida Statutes, in a 363
reference thereto, paragraph (b) of subsection (3) of section 364
627.715, Florida Statutes, is reenact ed to read: 365
627.715 Flood insurance. —An authorized insurer may issue 366
an insurance policy, contract, or endorsement providing personal 367
lines residential coverage for the peril of flood or excess 368
coverage for the peril of flood on any structure or the cont ents 369
of personal property contained therein, subject to this section. 370
This section does not apply to commercial lines residential or 371
commercial lines nonresidential coverage for the peril of flood. 372
An insurer may issue flood insurance policies, contracts, 373
endorsements, or excess coverage on a standard, preferred, 374
customized, flexible, or supplemental basis. 375
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(3) 376
(b) For flood coverage rates filed with the office before 377
October 1, 2025, the insurer may also establish and use such 378
rates in accordance with t he rates, rating schedules, or rating 379
manuals filed by the insurer with the office which allow the 380
insurer a reasonable rate of return on flood coverage written in 381
this state. Flood coverage rates established pursuant to this 382
paragraph are not subject to s . 627.062(2)(a) and (f). An 383
insurer shall notify the office of any change to such rates 384
within 30 days after the effective date of the change. The 385
notice must include the name of the insurer and the average 386
statewide percentage change in rates. Actuarial d ata with regard 387
to such rates for flood coverage must be maintained by the 388
insurer for 2 years after the effective date of such rate change 389
and is subject to examination by the office. The office may 390
require the insurer to incur the costs associated with a n 391
examination. Upon examination, the office, in accordance with 392
generally accepted and reasonable actuarial techniques, shall 393
consider the rate factors in s. 627.062(2)(b), (c), and (d), and 394
the standards in s. 627.062(2)(e), to determine if the rate is 395
excessive, inadequate, or unfairly discriminatory. If the office 396
determines that a rate is excessive or unfairly discriminatory, 397
the office shall require the insurer to provide appropriate 398
credit to affected insureds or an appropriate refund to affected 399
insureds who no longer receive coverage from the insurer. 400
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Section 10. For the purpose of incorporating the amendment 401
made by this act to section 627.062, Florida Statutes, in a 402
reference thereto, paragraph (b) of subsection (9) of section 403
627.7151, Florida Statutes, is reenacted to read: 404
627.7151 Limited sinkhole coverage insurance. — 405
(9) 406
(b) For limited sinkhole coverage insurance rates filed 407
with the office before October 1, 2019, the insurer may also 408
establish and use rates in accordance with the rat es, rating 409
schedules, or rating manuals filed by the insurer with the 410
office which allow the insurer a reasonable rate of return on 411
limited sinkhole coverage insurance written in this state. 412
Limited sinkhole coverage insurance rates established pursuant 413
to this paragraph are not subject to s. 627.062(2)(a) or (f). An 414
insurer shall notify the office of any change to such rates 415
within 30 days after the effective date of the change. The 416
notice must include the name of the insurer and the average 417
statewide percentage change in rates. Actuarial data with regard 418
to such rates for limited sinkhole coverage insurance must be 419
maintained by the insurer for 2 years after the effective date 420
of such rate change and is subject to examination by the office. 421
The office may require the insurer to incur the costs associated 422
with an examination. Upon examination, the office, in accordance 423
with generally accepted and reasonable actuarial techniques, 424
shall consider the rate factors in s. 627.062(2)(b) and (d) and 425
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the standards in s. 627.062(2)(e) to determine whether the rate 426
is excessive, inadequate, or unfairly discriminatory. 427
Section 11. This act shall take effect July 1, 2025. 428