Florida Senate - 2025 SB 554 By Senator Gaetz 1-00566E-25 2025554__ Page 1 of 15 CODING: Words stricken are deletions; words underlined are additions. A bill to be entitled 1

An act relating to insurance practices; amending s. 2 55.03, F.S.; revising the calculation that the Chief 3 Financial Officer performs to set the rate of interest 4 payable on judgments or decrees; amending s. 624.315, 5 F.S.; providing legislative findings; requiring the 6 Office of Insurance Regulation of the Financial 7 Services Commission to create specified reports on 8 related entities and compensation of executive 9 officers for insurers, licensees, and registrants; 10 specifying requirements for such reports; requiring 11 the office to publish the reports annually on its 12 website and submit the reports annually to specified 13 entities; requiring the office to use a reliable and 14 up-to-date methodology and software to create 15 specified reports and review such methodology and 16 software for accuracy; specifying that certain data is 17 not considered a trade secret and may be used for 18 certain purposes; prohibiting insurers from 19 withholding certain data from the office under certain 20 circumstances; amending s. 627.062, F.S.; revising the 21 facts the office must consider in determining whether 22 a rate is excessive, inadequate, or unfairly 23 discriminatory; amending s. 627.70131, F.S.; requiring 24 insurers to send policyholders a written estimate of 25 the amount of loss under certain circumstances; 26 specifying certain requirements for insurers when 27 creating and sending such estimates; prohibiting 28 insureds and insurers from waiving such requirements; 29

Florida Senate - 2025 SB 554 1-00566E-25 2025554__ Page 2 of 15 CODING: Words stricken are deletions; words underlined are additions. amending s. 627.7015, F.S.; conforming a cross-30 reference and provisions to changes made by the act; 31 amending s. 627.70152, F.S.; revising the manner in 32 which an insurer must respond to a notice to initiate 33 litigation; requiring a claimant and insurer to 34 participate in mandatory mediation under certain 35 circumstances; requiring the court to determine 36 attorney fees in a specified manner for cases arising 37 from a property insurance dispute; authorizing the 38 office to impose penalties for violations of certain 39 provisions; amending s. 627.70154, F.S.; requiring 40 insurers to disclose to policyholders the dollar 41 amount of a credit or premium discount for a mandatory 42 binding arbitration endorsement; reenacting ss. 43 627.151(1), 627.715(3)(b), and 627.7151(9)(b), F.S., 44 relating to workers’ compensation or employer’s 45 liability insurance filings, flood insurance, and 46 sinkhole coverage insurance, respectively, to 47 incorporate the amendment made to s. 627.062, F.S., in 48 references thereto; providing an effective date. 49 50 Be It Enacted by the Legislature of the State of Florida: 51 52

Section 1. Subsection (1) of

section 55.03, Florida 53 Statutes, is amended to read: 54 55.03 Judgments; rate of interest, generally.— 55

(1) On December 1, March 1, June 1, and September 1 of each 56 year, the Chief Financial Officer shall set the rate of interest 57 that shall be payable on judgments or decrees for the calendar 58

Florida Senate - 2025 SB 554 1-00566E-25 2025554__ Page 3 of 15 CODING: Words stricken are deletions; words underlined are additions. quarter beginning January 1 and adjust the rate quarterly on 59 April 1, July 1, and October 1 by averaging the discount rate of 60 the Federal Reserve Bank of New York for the preceding 12 61 months, then adding 800 400 basis points to the averaged federal 62 discount rate. The Chief Financial Officer shall inform the 63 clerk of the courts and chief judge for each judicial circuit of 64 the rate that has been established for the upcoming quarter.

The 65 interest rate established by the Chief Financial Officer takes 66 shall take effect on the first day of each following calendar 67 quarter. Judgments obtained on or after January 1, 1995, must 68 shall use the previous statutory rate for time periods before 69 January 1, 1995, for which interest is due and must shall apply 70 the rate set by the Chief Financial Officer for time periods 71 after January 1, 1995, for which interest is due. This 72 subsection does not Nothing contained herein shall affect a rate 73 of interest established by written contract or obligation. 74

Section 2. Present paragraph (

c) of subsection (4) of 75

section 624.315, Florida Statutes, is redesignated as paragraph 76 (d), and a new paragraph (

c) is added to that subsection, to 77 read: 78 624.315 Annual reports; quarterly reports.— 79 (4) 80 (c)1. The Legislature finds that the state has a strong and 81 legitimate financial interest in the health and performance of 82 the property and casualty insurance market. Further, the costs 83 of property insurance may have a strong impact on the 84 performance of Florida’s housing market, to the benefit or 85 detriment of Florida residents. Therefore, it is in the interest 86 of Floridians that the office collect and analyze data regarding 87

Florida Senate - 2025 SB 554 1-00566E-25 2025554__ Page 6 of 15 CODING: Words stricken are deletions; words underlined are additions. 4.

Investment income reasonably expected by the insurer, 146 consistent with the insurer’s investment practices, from 147 investable premiums anticipated in the filing, plus any other 148 expected income from currently invested assets representing the 149 amount expected on unearned premium reserves and loss reserves. 150 The commission may adopt rules using reasonable techniques of 151 actuarial science and economics to specify the manner in which 152 insurers calculate investment income attributable to classes of 153 insurance written in this state and the manner in which 154 investment income is used to calculate insurance rates.

Such 155 manner must contemplate allowances for an underwriting profit 156 factor and full consideration of investment income that produces 157 a reasonable rate of return; however, investment income from 158 invested surplus may not be considered. 159 5. The reasonableness of the judgment reflected in the 160 filing. 161 6. Dividends, savings, or unabsorbed premium deposits 162 allowed or returned to policyholders, members, or subscribers in 163 this state. 164 7. The adequacy of loss reserves. 165 8. The cost of reinsurance.

The office may not disapprove a 166 rate as excessive solely due to the insurer having obtained 167 catastrophic reinsurance to cover the insurer’s estimated 250-168 year probable maximum loss or any lower level of loss. 169 9. Trend factors, including trends in actual losses per 170 insured unit for the insurer making the filing. 171 10. Conflagration and catastrophe hazards, if applicable. 172 11. Projected hurricane losses, if applicable, which must 173 be estimated using a model or method found to be acceptable or 174

Florida Senate - 2025 SB 554 1-00566E-25 2025554__ Page 7 of 15 CODING: Words stricken are deletions; words underlined are additions. reliable by the Florida Commission on Hurricane Loss Projection 175 Methodology, and as further provided in s. 627.0628. 176 12.

Projected flood losses for personal residential 177 property insurance, if applicable, which may be estimated using 178 a model or method, or a straight average of model results or 179 output ranges, independently found to be acceptable or reliable 180 by the Florida Commission on Hurricane Loss Projection 181 Methodology and as further provided in s. 627.0628. 182 13. A reasonable margin for underwriting profit and 183 contingencies. 184 14. The cost of medical services, if applicable. 185 15. Any report created by the office pursuant to s. 186 624.315(4). 187 16.

Other relevant factors that affect the frequency or 188 severity of claims or expenses. 189 190 The provisions of this subsection do not apply to workers’ 191 compensation, employer’s liability insurance, and motor vehicle 192 insurance. 193

Section 4. Paragraph (

e) of subsection (3) of

section 194 627.70131, Florida Statutes, is amended to read: 195 627.70131 Insurer’s duty to acknowledge communications 196 regarding claims; investigation.— 197 (3) 198 (e)1. The insurer shall must send the policyholder a 199 written copy of any detailed estimate of the amount of the loss 200 within 7 days after the estimate is generated by an insurer’s 201 adjuster. This paragraph does not require that an insurer create 202 a detailed estimate of the amount of the loss if such estimate 203

Florida Senate - 2025 SB 554 1-00566E-25 2025554__ Page 8 of 15 CODING: Words stricken are deletions; words underlined are additions. is not reasonably necessary as part of the claim investigation. 204 2. When creating and sending the written loss estimate as 205 required under subparagraph 1., the insurer shall comply with 206 all of the following: 207 a. Adjusters shall use an electronic estimating program to 208 create or modify loss estimates.

Such program must generate an 209 itemized, per-unit estimate of loss to the property, including, 210 but not limited to, any loss of equipment, materials, labor, or 211 supplies. The program must also generate price data that 212 consists of unit-cost breakdowns consistent with contractor or 213 repair company rates in the relevant geographic market area. The 214 price data used by the program must be updated at least monthly 215 to reflect current market data. 216 b.

An adjuster may not modify price data unless the 217 adjuster documents that such modification is necessary for an 218 accurate estimate and reflects current market data. If the 219 adjuster modifies the loss estimate to reflect actual cash value 220 due to depreciation, such modification must be identified in a 221 separate line item. 222 c. An adjuster may not modify a loss estimate unless the 223 modified estimate meets all of the following requirements: 224 (

I) Clearly identifies all the modifications made to the 225 original estimate. 226 (II) Provides a detailed explanation for each modification. 227 (III) Specifies the identity of the adjuster who makes each 228 modification. 229 d. If an adjuster modifies the loss estimate pursuant to 230 sub-subparagraph c., the insurer must ensure that all versions 231 of the loss estimate are retained for at least 7 years after the 232

Florida Senate - 2025 SB 554 1-00566E-25 2025554__ Page 9 of 15 CODING: Words stricken are deletions; words underlined are additions. claim is resolved. 233 3. The insurer or insured may not waive any requirements of 234 subparagraph 2. 235

Section 5. Subsection (2) of

section 627.7015, Florida 236 Statutes, is amended to read: 237 627.7015 Alternative procedure for resolution of disputed 238 property insurance claims.— 239

(2) At the time of issuance and renewal of a policy or at 240 the time a first-party claim within the scope of this

section is 241 filed by the policyholder, the insurer shall notify the 242 policyholder of its right to participate in the mediation 243 program under this section. A claim becomes eligible for 244 mediation after the insurer complies with s. 627.70131(7) or 245 elects to reinspect pursuant to s. 627.70152(4)(a)3. If the 246 insurer has not complied with s. 627.70131(7) or elected to 247 reinspect pursuant to s. 627.70152(4)(a)3. within 90 days after 248 notice of the loss, the insurer may not require mediation under 249 this section. This subsection does not impair the right of an 250 insurance company to request mediation after a determination of 251 coverage pursuant to this

section or require appraisal or 252 another method of alternative dispute resolution pursuant to s. 253 627.70152(4)(

c) s. 627.70152(4)(b). The department shall prepare 254 a consumer information pamphlet for distribution to persons 255 participating in mediation. 256

Section 6. Subsection (4) of

section 627.70152, Florida 257 Statutes, is amended, and subsections (8) and (9) are added to 258 that section, to read: 259 627.70152 Suits arising under a property insurance policy.— 260

(4) INSURER DUTIES.—An insurer must have a procedure for 261

Florida Senate - 2025 SB 554 1-00566E-25 2025554__ Page 10 of 15 CODING: Words stricken are deletions; words underlined are additions. the prompt investigation, review, and evaluation of the dispute 262 stated in the notice and must investigate each claim contained 263 in the notice in accordance with the Florida Insurance Code. An 264 insurer shall must respond in writing within 10 business days 265 after receiving the notice specified in subsection (3). The 266 insurer must provide the response to the claimant by e-mail if 267 the insured has designated an e-mail address in the notice. 268 (

a) If an insurer is responding to a notice served on the 269 insurer following a denial of coverage by the insurer, the 270 insurer must respond by: 271 1. Accepting the presuit settlement demand coverage; 272 2. Making a counteroffer to the presuit settlement demand 273 Continuing to deny coverage; or 274 3. Providing a statement that indicates the insurer is 275 declining to respond to the notice Asserting the right to 276 reinspect the damaged property.

If the insurer responds by 277 asserting the right to reinspect the damaged property, it has 14 278 business days after the response asserting that right to 279 reinspect the property and accept or continue to deny coverage. 280 The time limits provided in s. 95.11 are tolled during the 281 reinspection period if such time limits expire before the end of 282 the reinspection period. If the insurer continues to deny 283 coverage, the claimant may file suit without providing 284 additional notice to the insurer. 285 (

b) After the response provided under paragraph (a), and 286 before initiating litigation, the claimant and insurer must 287 participate in mandatory mediation in the same manner as 288 provided in s. 627.7015 except that the mediation is mandatory 289 and the cost of mediation must be shared equally between the 290

Florida Senate - 2025 SB 554 1-00566E-25 2025554__ Page 11 of 15 CODING: Words stricken are deletions; words underlined are additions. parties, unless otherwise agreed upon. 291 (

c) If an insurer is responding to a notice provided to the 292 insurer alleging

an act or omission by the insurer other than a 293 denial of coverage, the insurer must respond by making a 294 settlement offer or requiring the claimant to participate in 295 appraisal or another method of alternative dispute resolution. 296 The time limits provided in s. 95.11 are tolled as long as 297 appraisal or other alternative dispute resolution is ongoing if 298 such time limits expire during the appraisal process or dispute 299 resolution process.

If the appraisal or alternative dispute 300 resolution has not been concluded within 90 days after the 301 expiration of the 10-day notice of intent to initiate litigation 302 specified in subsection (3), the claimant or claimant’s attorney 303 may immediately file suit without providing the insurer 304 additional notice. 305

(8) ATTORNEY FEES.—In cases arising from a property 306 insurance dispute, the court shall determine attorney fees as 307 provided in this subsection. 308 (

a) If the judgment entered is at least 80 percent greater 309 than the claimant’s presuit settlement demand, the prevailing 310 party’s attorney must be awarded 100 percent of the reasonably 311 incurred attorney fees. 312 (

b) If the judgment entered is between 20 percent and 80 313 percent, inclusive, of the claimant’s presuit settlement demand, 314 the prevailing party’s attorney must be awarded the percentage 315 of reasonably incurred attorney fees which is proportional to 316 the percentage of the judgement relative to the presuit demand. 317 (

c) If the judgment is less than 20 percent of the 318 claimant’s presuit settlement demand, the prevailing party’s 319

Florida Senate - 2025 SB 554 1-00566E-25 2025554__ Page 12 of 15 CODING: Words stricken are deletions; words underlined are additions. attorney may not be awarded attorney fees. 320 (

d) Paragraphs (a), (b), and (

c) do not apply in any of the 321 following circumstances: 322 1. The insurer fails to comply with statutory timelines for 323 responding to claims or engaging in mediation. 324 2. The claimant’s demand is deemed reasonable by the court, 325 regardless of judgment outcome. 326 3. The court finds evidence of bad faith or abuse of the 327 litigation process by either party. 328

(9) PENALTIES.—The office may impose any penalty authorized 329 under the Florida Insurance Code on a person who violates this 330 section, including injunctions, fines, and fees. 331

Section 7. Subsection (2) of

section 627.70154, Florida 332 Statutes, is amended to read: 333 627.70154 Mandatory binding arbitration.—A property 334 insurance policy issued in this state may not require that a 335 policyholder participate in mandatory binding arbitration unless 336 all of the following apply: 337

(2) The premium that a policyholder is charged for the 338 policy includes an actuarially sound credit or premium discount 339 for the mandatory binding arbitration endorsement. The insurer 340 shall disclose the dollar amount of such credit or discount when 341 providing a quote to the policyholder. 342

Section 8. For the purpose of incorporating the amendment 343 made by this act to

section 627.062, Florida Statutes, in a 344 reference thereto, subsection (1) of

section 627.151, Florida 345 Statutes, is reenacted to read: 346 627.151 Basis of approval or disapproval of workers’ 347 compensation or employer’s liability insurance filing; scope of 348

Florida Senate - 2025 SB 554 1-00566E-25 2025554__ Page 13 of 15 CODING: Words stricken are deletions; words underlined are additions. disapproval power.— 349

(1) In determining at any time whether to approve or 350 disapprove a filing as to workers’ compensation or employer’s 351 liability insurance, or to permit the filing otherwise to become 352 effective, the office shall give consideration only to the 353 applicable standards and factors referred to in ss. 627.062 and 354 627.072. 355

Section 9. For the purpose of incorporating the amendment 356 made by this act to

section 627.062, Florida Statutes, in a 357 reference thereto, paragraph (

b) of subsection (3) of

section 358 627.715, Florida Statutes, is reenacted to read: 359 627.715 Flood insurance.—An authorized insurer may issue an 360 insurance policy, contract, or endorsement providing personal 361 lines residential coverage for the peril of flood or excess 362 coverage for the peril of flood on any structure or the contents 363 of personal property contained therein, subject to this section. 364 This

section does not apply to commercial lines residential or 365 commercial lines nonresidential coverage for the peril of flood. 366 An insurer may issue flood insurance policies, contracts, 367 endorsements, or excess coverage on a standard, preferred, 368 customized, flexible, or supplemental basis. 369 (3) 370 (

b) For flood coverage rates filed with the office before 371 October 1, 2025, the insurer may also establish and use such 372 rates in accordance with the rates, rating schedules, or rating 373 manuals filed by the insurer with the office which allow the 374 insurer a reasonable rate of return on flood coverage written in 375 this state. Flood coverage rates established pursuant to this 376 paragraph are not subject to s. 627.062(2)(

a) and (f). An 377

Florida Senate - 2025 SB 554 1-00566E-25 2025554__ Page 14 of 15 CODING: Words stricken are deletions; words underlined are additions. insurer shall notify the office of any change to such rates 378 within 30 days after the effective date of the change. The 379 notice must include the name of the insurer and the average 380 statewide percentage change in rates. Actuarial data with regard 381 to such rates for flood coverage must be maintained by the 382 insurer for 2 years after the effective date of such rate change 383 and is subject to examination by the office.

The office may 384 require the insurer to incur the costs associated with an 385 examination. Upon examination, the office, in accordance with 386 generally accepted and reasonable actuarial techniques, shall 387 consider the rate factors in s. 627.062(2)(b), (c), and (d), and 388 the standards in s. 627.062(2)(e), to determine if the rate is 389 excessive, inadequate, or unfairly discriminatory.

If the office 390 determines that a rate is excessive or unfairly discriminatory, 391 the office shall require the insurer to provide appropriate 392 credit to affected insureds or an appropriate refund to affected 393 insureds who no longer receive coverage from the insurer. 394

Section 10. For the purpose of incorporating the amendment 395 made by this act to

section 627.062, Florida Statutes, in a 396 reference thereto, paragraph (

b) of subsection (9) of

section 397 627.7151, Florida Statutes, is reenacted to read: 398 627.7151 Limited sinkhole coverage insurance.— 399 (9) 400 (

b) For limited sinkhole coverage insurance rates filed 401 with the office before October 1, 2019, the insurer may also 402 establish and use rates in accordance with the rates, rating 403 schedules, or rating manuals filed by the insurer with the 404 office which allow the insurer a reasonable rate of return on 405 limited sinkhole coverage insurance written in this state. 406

Florida Senate - 2025 SB 554 1-00566E-25 2025554__ Page 15 of 15 CODING: Words stricken are deletions; words underlined are additions. Limited sinkhole coverage insurance rates established pursuant 407 to this paragraph are not subject to s. 627.062(2)(

a) or (f). An 408 insurer shall notify the office of any change to such rates 409 within 30 days after the effective date of the change. The 410 notice must include the name of the insurer and the average 411 statewide percentage change in rates. Actuarial data with regard 412 to such rates for limited sinkhole coverage insurance must be 413 maintained by the insurer for 2 years after the effective date 414 of such rate change and is subject to examination by the office. 415 The office may require the insurer to incur the costs associated 416 with an examination.

Upon examination, the office, in accordance 417 with generally accepted and reasonable actuarial techniques, 418 shall consider the rate factors in s. 627.062(2)(

b) and (

d) and 419 the standards in s. 627.062(2)(

e) to determine whether the rate 420 is excessive, inadequate, or unfairly discriminatory. 421

Section 11. This act shall take effect July 1, 2025. 422