Florida Senate - 2023 SB 1340 By Senator Grall 29-01330A-23 20231340__ Page 1 of 31 CODING: Words stricken are deletions; words underlined are additions. A bill to be entitled 1

An act relating to insurance; amending s. 624.155, 2 F.S.; providing construction relating to the recovery 3 of damages under the common-law remedy of bad faith 4 against insurers; amending s. 624.3161, F.S.; 5 providing that specified property insurers shall, 6 rather than may, be subject to an additional market 7 conduct examination after a hurricane; amending s. 8 624.4055, F.S.; revising a prohibition against the 9 continued writing of private passenger automobile 10 insurance by certain insurers; amending ss. 624.407 11 and 624.408, F.S.; revising minimum surplus 12 requirements for certain residential property 13 insurers; amending s. 624.424, F.S.; revising 14 information required to be reported by property 15 insurers in certain supplemental reports; specifying 16 requirements for the Office of Insurance Regulation in 17 publicly reporting certain data; providing 18 construction; amending s. 626.9201, F.S.; prohibiting 19 insurers providing homeowners’ insurance or commercial 20 property insurance from canceling, nonrenewing, or 21 terminating a policy during a pending claim except 22 under certain circumstances; amending s. 626.9541, 23 F.S.; adding unfair claim settlement practices that 24 constitute unfair methods of competition or unfair or 25 deceptive acts or practices; prohibiting directors or 26 officers of insolvent or impaired insurers from 27 authorizing or permitting the payment of certain 28 bonuses; defining the term “bonus”; providing a 29

Florida Senate - 2023 SB 1340 29-01330A-23 20231340__ Page 2 of 31 CODING: Words stricken are deletions; words underlined are additions. criminal penalty; amending s. 627.0613, F.S.; 30 requiring the consumer advocate, in conjunction with 31 the Department of Financial Services and the office, 32 to annually prepare and make publicly available a 33 report relating to insurer rate increases; amending s. 34 627.351, F.S.; deleting a requirement that a Citizens 35 Property Insurance Corporation policyholder making a 36 claim for water damage has the burden of proving that 37 the damage was not caused by flooding; amending s. 38 627.35191, F.S.; requiring the corporation to provide 39 to the Legislature and the Financial Services 40 Commission an annual supplemental report relating to 41 closed claims; specifying requirements for the report; 42 amending s. 627.4133, F.S.; prohibiting insurers 43 providing homeowners’ insurance from canceling, 44 nonrenewing, or terminating a policy during a pending 45 claim except under certain circumstances; amending s. 46 627.420, F.S.; prohibiting certain actions by an 47 insurer issuing a homeowner’s insurance binder before 48 closing to a purchaser of residential property; 49 requiring such insurer to perform any required 50 inspections before binding coverage; requiring a 51 seller of a new home purchase to allow access to the 52 property for such inspection before closing; amending 53 s. 627.701, F.S.; providing that if a roof deductible 54 is applied under a personal lines residential property 55 insurance policy, no other deductible may be applied 56 to certain other losses; amending s. 627.7011, F.S.; 57 providing that if a homeowner’s insurance policy 58

Florida Senate - 2023 SB 1340 29-01330A-23 20231340__ Page 3 of 31 CODING: Words stricken are deletions; words underlined are additions. provides an option with limited coverage, the insurer 59 must offer a premium with a certain discount or 60 credit; creating s. 627.70111, F.S.; requiring a 61 specified notice period to a homeowner before any 62 inspection of the homeowner’s residential property for 63 insurance purposes, except under certain 64 circumstances; amending s. 627.70131, F.S.; providing 65 that repeated violations of certain prompt payment 66 requirements are an unfair method of competition and 67 an unfair or deceptive act or practice; deleting a 68 provision providing that failure to comply with 69 certain provisions does not form the sole basis for a 70 private cause of action; amending s. 627.70132, F.S.; 71 providing that certain timeframes to provide notice of 72 a property insurance claim are tolled during the 73 period of active duty for an insured in active 74 military service; amending s. 627.70152, F.S.; 75 requiring a property insurer to provide a certain 76 response to a presuit notice to the department; 77 deleting the authority for an insurer to require the 78 claimant to participate in appraisal; providing that a 79 policy must require a claimant’s consent; specifying a 80 limitation and restriction on invoking appraisal; 81 providing that a certain notice and response are 82 admissible as evidence in certain proceedings; 83 requiring that any alternative dispute resolution 84 process be authorized by statute; creating s. 85 627.70155, F.S.; specifying restrictions on property 86 insurance policies relating to venue and controlling 87

Florida Senate - 2023 SB 1340 29-01330A-23 20231340__ Page 4 of 31 CODING: Words stricken are deletions; words underlined are additions. law provisions; amending s. 627.702, F.S.; providing 88 that certain total losses under the valued policy law 89 may not be subject to any requirement for the insured 90 to participate in appraisal; amending s. 768.79, F.S.; 91 revising conditions for making, and parties who may 92 make, certain joint offers of judgment or settlement; 93 providing an effective date. 94 95 Be It Enacted by the Legislature of the State of Florida: 96 97

Section 1. Subsection (8) of

section 624.155, Florida 98 Statutes, is amended to read: 99 624.155 Civil remedy.— 100

(8) The civil remedy specified in this

section does not 101 preempt any other remedy or cause of action provided for 102 pursuant to any other statute or pursuant to the common law of 103 this state. Any person may obtain a judgment under either the 104 common-law remedy of bad faith or this statutory remedy, but 105 shall not be entitled to a judgment under both remedies. This 106

section shall not be construed to create a common-law cause of 107 action. The damages recoverable pursuant to this

section shall 108 include those damages which are a reasonably foreseeable result 109 of a specified violation of this

section by the authorized 110 insurer and may include an award or judgment in an amount that 111 exceeds the policy limits. This

section does not limit or 112 prohibit the recovery of any damages under the common-law remedy 113 of bad faith, and extracontractual, consequential damages may be 114 recovered under such remedy. 115

Section 2. Subsection (7) of

section 624.3161, Florida 116

Florida Senate - 2023 SB 1340 29-01330A-23 20231340__ Page 5 of 31 CODING: Words stricken are deletions; words underlined are additions. Statutes, is amended to read: 117 624.3161 Market conduct examinations.— 118

(7) Notwithstanding subsection (1), any authorized insurer 119 transacting property insurance business in this state shall may 120 be subject to an additional market conduct examination after a 121 hurricane if the insurer: 122 (

a) Is among the top 20 percent of insurers based upon a 123 calculation of the ratio of hurricane-related property insurance 124 claims filed to the number of property insurance policies in 125 force; 126 (

b) Is among the top 20 percent of insurers based upon a 127 calculation of the ratio of consumer complaints made to the 128 department to hurricane-related claims; 129 (

c) Has made significant payments to its managing general 130 agent since the hurricane; or 131 (

d) Is identified by the office as necessitating a market 132 conduct exam for any other reason. 133 134 All relevant criteria under this

section and s. 624.316 shall be 135 applied to the market conduct examination under this subsection. 136 Such an examination must be initiated within 18 months after the 137 landfall of a hurricane that results in an executive order or a 138 state of emergency issued by the Governor. An examination of an 139 insurer under this subsection must also include an examination 140 of its managing general agent as if it were the insurer. 141

Section

Section 624.4055, Florida Statutes, is amended 142 to read: 143 624.4055 Restrictions on existing private passenger 144 automobile insurance.—An No insurer writing private passenger 145

Florida Senate - 2023 SB 1340 29-01330A-23 20231340__ Page 6 of 31 CODING: Words stricken are deletions; words underlined are additions. automobile insurance in this state may not continue to write 146 such insurance if the insurer: 147

(1) Writes homeowners’ insurance in another state but not 148 in this state; or 149

(2) Writes homeowners’ insurance in this state, but the 150 number of homeowners’ insurance policies that it writes or 151 renews in this state in any calendar year is less than 5 percent 152 of the total number of policies written or renewed by the 153 insurer for all kinds of insurance transacted in this state by 154 the insurer, unless the insurer writing private passenger 155 automobile insurance in this state is affiliated with an insurer 156 writing homeowners’ insurance in this state. 157

Section 4. Subsection (1) of

section 624.407, Florida 158 Statutes, is amended to read: 159 624.407 Surplus required; new insurers.— 160

(1) To receive authority to transact any one kind or 161 combinations of kinds of insurance, as defined in

part V of this 162 chapter, an insurer applying for its original certificate of 163 authority in this state shall possess surplus as to 164 policyholders at least the greater of: 165 (

a) For a property and casualty insurer, $5 million, or 166 $2.5 million for any other insurer; 167 (

b) For life insurers, 4 percent of the insurer’s total 168 liabilities; 169 (

c) For life and health insurers, 4 percent of the 170 insurer’s total liabilities, plus 6 percent of the insurer’s 171 liabilities relative to health insurance; 172 (

d) For all insurers other than life insurers and life and 173 health insurers, 10 percent of the insurer’s total liabilities; 174

Florida Senate - 2023 SB 1340 29-01330A-23 20231340__ Page 7 of 31 CODING: Words stricken are deletions; words underlined are additions. (

e) Notwithstanding paragraph (

a) or paragraph (d), for a 175 domestic insurer that transacts residential property insurance 176 and is: 177 1. Not a wholly owned subsidiary of an insurer domiciled in 178 any other state, $30 $15 million. 179 2. A wholly owned subsidiary of an insurer domiciled in any 180 other state, $50 million; 181 (

f) Notwithstanding paragraphs (a), (d), and (e), for a 182 domestic insurer that only transacts limited sinkhole coverage 183 insurance for personal lines residential property pursuant to s. 184 627.7151, $7.5 million; or 185 (

g) Notwithstanding paragraphs (a), (d), and (e), for an 186 insurer that only transacts residential property insurance in 187 the form of renter’s insurance, tenant’s coverage, cooperative 188 unit owner insurance, or any combination thereof, $10 million. 189

Section 5. Paragraphs (

f) and (

g) of subsection (1) of 190

section 624.408, Florida Statutes, are amended to read: 191 624.408 Surplus required; current insurers.— 192

(1) To maintain a certificate of authority to transact any 193 one kind or combinations of kinds of insurance, as defined in 194

part V of this chapter, an insurer in this state must at all 195 times maintain surplus as to policyholders at least the greater 196 of: 197 (

f) For residential property insurers not holding a 198 certificate of authority before July 1, 2011, $30 $15 million. 199 (

g) For residential property insurers holding a certificate 200 of authority before July 1, 2011, and until June 30, 2016, $5 201 million; on or after July 1, 2016, and until June 30, 2021, $10 202 million; on or after July 1, 2021, and until June 30, 2023, $15 203

Florida Senate - 2023 SB 1340 29-01330A-23 20231340__ Page 8 of 31 CODING: Words stricken are deletions; words underlined are additions. million; on or after July 1, 2023, $30 million. 204 205 The office may reduce the surplus requirement in paragraphs (f) 206 and (

g) if the insurer is not writing new business, has premiums 207 in force of less than $1 million per year in residential 208 property insurance, or is a mutual insurance company. 209

Section 6. Paragraph (

a) of subsection (10) and subsection 210 (11) of

section 624.424, Florida Statutes, are amended to read: 211 624.424 Annual statement and other information.— 212 (10)(

a) Each insurer or insurer group doing business in 213 this state shall file on a quarterly basis in conjunction with 214 financial reports required by paragraph (1)(

a) a supplemental 215 report on an individual and group basis on a form prescribed by 216 the commission with information on personal lines and commercial 217 lines residential property insurance policies in this state. The 218 supplemental report shall include separate information for 219 personal lines property policies and for commercial lines 220 property policies and totals for each item specified, including 221 premiums written for each of the property lines of business as 222 described in ss. 215.555(2)(

c) and 627.351(6)(a). The report 223 shall include the following information for each county on a 224 monthly basis: 225 1. Total number of policies in force at the end of each 226 month. 227 2. Total number of policies canceled. 228 3. Total number of policies nonrenewed. 229 4. Number of policies canceled due to hurricane risk. 230 5. Number of policies nonrenewed due to hurricane risk. 231 6. Number of new policies written. 232

Florida Senate - 2023 SB 1340 29-01330A-23 20231340__ Page 9 of 31 CODING: Words stricken are deletions; words underlined are additions. 7. Total dollar value of structure exposure under policies 233 that include wind coverage. 234 8. Number of policies that exclude wind coverage. 235 9. Number of claims open each month. 236 10. Number of claims closed each month. 237 11. Number of claims pending each month. 238 12.

Number of claims in which either the insurer or insured 239 invoked any form of alternative dispute resolution;, which party 240 invoked alternative dispute resolution; the pre-alternative 241 dispute resolution payment made by the insurer, if any; the 242 post-alternative dispute resolution payment made by the insurer, 243 if any; and the specifying which form of alternative dispute 244 resolution was used. 245

(11) Beginning January 1, 2022, each authorized insurer or 246 insurer group issuing personal lines or commercial lines 247 residential property insurance policies in this state shall file 248 with the office on an annual basis in conjunction with the 249 statements required by paragraph (1)(

a) a supplemental report on 250 an individual and group basis for closed claims. The office 251 shall compile the data for each insurer or insurer group on a 252 statewide basis and make such data publicly available on its 253 website monthly. Such data, when aggregated on a statewide basis 254 as to an individual insurer or insurer group, is not a trade 255 secret as defined in s. 688.002 or s. 812.081(1) and is not 256 subject to the public records exemption for trade secrets 257 provided in s. 119.0715.

By January 1, 2024, the office shall 258 also make publicly available the data required to be reported by 259 each insurer or insurer group for the 2021 calendar year, the 260 2022 calendar year, and the 2023 calendar year through July 1, 261

Florida Senate - 2023 SB 1340 29-01330A-23 20231340__ Page 10 of 31 CODING: Words stricken are deletions; words underlined are additions. 2023, and collected by the office during the 2022 calendar year 262 and subsequent years. The report must be on a form prescribed by 263 the commission and must include the following information for 264 each claim closed, excluding liability only claims, within the 265 reporting period in this state: 266 (

a) The unique claim identification number. 267 (

b) The type of policy. 268 (

c) The zip code of the property where the claim occurred. 269 (

d) The county where the claim occurred. 270 (

e) The date of loss. 271 (

f) The peril or type of loss, including information about: 272 1. The types of vendors used for mitigation, repair, or 273 replacement; and 274 2. The names of vendors used, if known. 275 (

g) The date the claim was reported to insurer. 276 (

h) The initial date the claim was closed, including 277 information about whether the claim was closed with or without 278 payment. 279 (

i) The date the claim was most recently reopened, if 280 applicable. 281 (

j) The date a supplemental claim was filed, if applicable. 282 (

k) The date the claim was most recently closed, if 283 different from the initial date the claim was closed. 284 (

l) The name of the public adjuster on the claim, if any. 285 (

m) The Florida Bar number and name of the attorney for the 286 claimant, if any. 287 (

n) The total indemnity paid by the insurer. 288 (

o) The total loss adjustment expenses paid by the insurer. 289 (

p) The amounts, listed separately, amount paid for any 290

Florida Senate - 2023 SB 1340 29-01330A-23 20231340__ Page 11 of 31 CODING: Words stricken are deletions; words underlined are additions. claimant’s and insurer’s attorney fees, and specifying the 291 amount incurred during prelitigation or appraisal and the amount 292 incurred during arbitration or litigation, as applicable if any. 293 (

q) The amounts, listed separately, amount paid in costs 294 for claimant’s and insurer’s attorney attorney’s expenses, 295 including, but not limited to, expert witness fees. 296 (

r) The contingency risk multiplier, if any, that the 297 claimant’s attorney requested to be applied in calculating the 298 attorney fees awarded to the claimant’s attorney. 299 (

s) The contingency risk multiplier, if any, that a court 300 applied in calculating the attorney fees awarded to the 301 claimant’s attorney. 302 (

t) Data submitted by each claimant and each insurer or 303 insurer group pursuant to s. 627.70152(3) and (4) to the 304 department. 305 (

u) Any other information deemed necessary by the 306 commission to provide the office with the ability to track 307 litigation and claims trends occurring in the property market. 308

Section 7. Subsection (4) is added to

section 626.9201, 309 Florida Statutes, to read: 310 626.9201 Notice of cancellation or nonrenewal.— 311

(4) Notwithstanding this

section or any other law to the 312 contrary, an insurer providing homeowners’ insurance or 313 commercial property insurance may not cancel, nonrenew, or 314 terminate a policy during a pending claim, except for nonpayment 315 of premium. 316

Section 8. Paragraphs (i), (o), and (

w) of subsection (1) 317 of

section 626.9541, Florida Statutes, are amended to read: 318 626.9541 Unfair methods of competition and unfair or 319

Florida Senate - 2023 SB 1340 29-01330A-23 20231340__ Page 12 of 31 CODING: Words stricken are deletions; words underlined are additions. deceptive acts or practices defined.— 320

(1) UNFAIR METHODS OF COMPETITION AND UNFAIR OR DECEPTIVE 321 ACTS.—The following are defined as unfair methods of competition 322 and unfair or deceptive acts or practices: 323 (

i) Unfair claim settlement practices.— 324 1. Attempting to settle claims on the basis of an 325 application, when serving as a binder or intended to become a 326 part of the policy, or any other material document which was 327 altered without notice to, or knowledge or consent of, the 328 insured; 329 2.

A material misrepresentation made to an insured or any 330 other person having an interest in the proceeds payable under 331 such contract or policy, for the purpose and with the intent of 332 effecting settlement of such claims, loss, or damage under such 333 contract or policy on less favorable terms than those provided 334 in, and contemplated by, such contract or policy; 335 3. Committing or performing with such frequency as to 336 indicate a general business practice any of the following: 337 a. Failing to adopt and implement standards for the proper 338 investigation of claims; 339 b.

Misrepresenting pertinent facts or insurance policy 340 provisions relating to coverages at issue; 341 c. Failing to acknowledge and act promptly upon 342 communications with respect to claims; 343 d. Denying claims without conducting reasonable 344 investigations based upon available information; 345 e. Failing to affirm or deny full or partial coverage of 346 claims, and, as to partial coverage, the dollar amount or extent 347 of coverage, or failing to provide a written statement that the 348

Florida Senate - 2023 SB 1340 29-01330A-23 20231340__ Page 13 of 31 CODING: Words stricken are deletions; words underlined are additions. claim is being investigated, upon the written request of the 349 insured within 30 days after proof-of-loss statements have been 350 completed; 351 f. Failing to promptly provide a reasonable explanation in 352 writing to the insured of the basis in the insurance policy, in 353 relation to the facts or applicable law, for denial of a claim 354 or for the offer of a compromise settlement; 355 g.

Failing to promptly notify the insured of any additional 356 information necessary for the processing of a claim; 357 h. Failing to clearly explain the nature of the requested 358 information and the reasons why such information is necessary; 359 or 360 i. Failing to pay personal injury protection insurance 361 claims within the time periods required by s. 627.736(4)(b).

The 362 office may order the insurer to pay restitution to a 363 policyholder, medical provider, or other claimant, including 364 interest at a rate consistent with the amount set forth in s. 365 55.03(1), for the time period within which an insurer fails to 366 pay claims as required by law. Restitution is in addition to any 367 other penalties allowed by law, including, but not limited to, 368 the suspension of the insurer’s certificate of authority; or 369 j.

Compelling insureds to institute litigation to recover 370 amounts due under an insurance policy by offering substantially 371 less than the amounts ultimately recovered in actions brought by 372 such insureds; 373 k. Altering a field adjuster’s initial estimate, report, 374 photographs, or written comments regarding photographs or 375 observations of an insured risk without the express written 376 approval of the adjuster obtained within 5 days after the 377

Florida Senate - 2023 SB 1340 29-01330A-23 20231340__ Page 14 of 31 CODING: Words stricken are deletions; words underlined are additions. alteration which clearly explains in detail the nature and 378 extent of the changes; 379 l. Failing to provide an insured with a complete, 380 unredacted, and unaltered copy of a field adjuster’s initial 381 report, estimate, and photographs within 10 business days after 382 receipt of such materials; or 383 m.

Failing to provide an insured with a complete, 384 unredacted, and unaltered copy of any report or estimate 385 obtained from an engineer, an environmental consultant, a 386 contractor, or another specialist retained by the insurer to 387 investigate the claim within 10 business days after receipt of 388 such report or estimate; 389 4.

Failing to pay undisputed amounts of partial or full 390 benefits owed under first-party property insurance policies 391 within 60 days after an insurer receives notice of a residential 392 property insurance claim, determines the amounts of partial or 393 full benefits, and agrees to coverage, unless payment of the 394 undisputed benefits is prevented by factors beyond the control 395 of the insurer as defined in s. 627.70131(5); 396 5. Repeatedly failing to comply with s. 627.70131(7)(a); or 397 6.

Assigning three or more adjusters within a 6-month 398 period on a claim arising from a natural disaster, including a 399 tropical storm or hurricane, which is the subject of a state of 400 emergency declared by executive order or proclamation of the 401 Governor pursuant to s. 252.36. 402 (

o) Illegal dealings in premiums; excess or reduced charges 403 for insurance.— 404 1. Knowingly collecting any sum as a premium or charge for 405 insurance, which is not then provided, or is not in due course 406

Florida Senate - 2023 SB 1340 29-01330A-23 20231340__ Page 15 of 31 CODING: Words stricken are deletions; words underlined are additions. to be provided, subject to acceptance of the risk by the 407 insurer, by an insurance policy issued by an insurer as 408 permitted by this code. 409 2.

Knowingly collecting as a premium or charge for 410 insurance any sum in excess of or less than the premium or 411 charge applicable to such insurance, in accordance with the 412 applicable classifications and rates as filed with and approved 413 by the office, and as specified in the policy; or, in cases when 414 classifications, premiums, or rates are not required by this 415 code to be so filed and approved, premiums and charges collected 416 from a Florida resident in excess of or less than those 417 specified in the policy and as fixed by the insurer. 418 Notwithstanding any other provision of law, this provision shall 419 not be deemed to prohibit the charging and collection, by 420 surplus lines agents licensed under

part VIII of this chapter, 421 of the amount of applicable state and federal taxes, or fees as 422 authorized by s. 626.916(4), in addition to the premium required 423 by the insurer or the charging and collection, by licensed 424 agents, of the exact amount of any discount or other such fee 425 charged by a credit card facility in connection with the use of 426 a credit card, as authorized by subparagraph (q)3., in addition 427 to the premium required by the insurer.

This subparagraph shall 428 not be construed to prohibit collection of a premium for a 429 universal life or a variable or indeterminate value insurance 430 policy made in accordance with the terms of the contract. 431 3. Imposing or requesting an additional premium for a 432 policy of homeowner’s insurance because the insured filed a 433 claim, unless the insurer’s file contains information from which 434 the insurer in good faith determines that the insured acted 435

Florida Senate - 2023 SB 1340 29-01330A-23 20231340__ Page 16 of 31 CODING: Words stricken are deletions; words underlined are additions. negligently or intentionally caused damages that led to the 436 claim. 437 4.a.3.a.

Imposing or requesting an additional premium for a 438 policy of motor vehicle liability, personal injury protection, 439 medical payment, or collision insurance or any combination 440 thereof or refusing to renew the policy solely because the 441 insured was involved in a motor vehicle accident unless the 442 insurer’s file contains information from which the insurer in 443 good faith determines that the insured was substantially at 444 fault in the accident. 445 b.

An insurer which imposes and collects such a surcharge 446 or which refuses to renew such policy shall, in conjunction with 447 the notice of premium due or notice of nonrenewal, notify the 448 named insured that he or she is entitled to reimbursement of 449 such amount or renewal of the policy under the conditions listed 450 below and will subsequently reimburse him or her or renew the 451 policy, if the named insured demonstrates that the operator 452 involved in the accident was: 453 (

I) Lawfully parked; 454 (II) Reimbursed by, or on behalf of, a person responsible 455 for the accident or has a judgment against such person; 456 (III) Struck in the rear by another vehicle headed in the 457 same direction and was not convicted of a moving traffic 458 violation in connection with the accident; 459 (IV) Hit by a “hit-and-run” driver, if the accident was 460 reported to the proper authorities within 24 hours after 461 discovering the accident; 462 (

V) Not convicted of a moving traffic violation in 463 connection with the accident, but the operator of the other 464

Florida Senate - 2023 SB 1340 29-01330A-23 20231340__ Page 17 of 31 CODING: Words stricken are deletions; words underlined are additions. automobile involved in such accident was convicted of a moving 465 traffic violation; 466 (VI) Finally adjudicated not to be liable by a court of 467 competent jurisdiction; 468 (VII) In receipt of a traffic citation which was dismissed 469 or nolle prossed; or 470 (VIII) Not at fault as evidenced by a written statement 471 from the insured establishing facts demonstrating lack of fault 472 which are not rebutted by information in the insurer’s file from 473 which the insurer in good faith determines that the insured was 474 substantially at fault. 475 c.

In addition to the other provisions of this 476 subparagraph, an insurer may not fail to renew a policy if the 477 insured has had only one accident in which he or she was at 478 fault within the current 3-year period. However, an insurer may 479 nonrenew a policy for reasons other than accidents in accordance 480 with s. 627.728. This subparagraph does not prohibit nonrenewal 481 of a policy under which the insured has had three or more 482 accidents, regardless of fault, during the most recent 3-year 483 period. 484 5.4.

Imposing or requesting an additional premium for, or 485 refusing to renew, a policy for motor vehicle insurance solely 486 because the insured committed a noncriminal traffic infraction 487 as described in s. 318.14 unless the infraction is: 488 a. A second infraction committed within an 18-month period, 489 or a third or subsequent infraction committed within a 36-month 490 period. 491 b. A violation of s. 316.183, when such violation is a 492 result of exceeding the lawful speed limit by more than 15 miles 493

Florida Senate - 2023 SB 1340 29-01330A-23 20231340__ Page 18 of 31 CODING: Words stricken are deletions; words underlined are additions. per hour. 494 6.5. Upon the request of the insured, the insurer and 495 licensed agent shall supply to the insured the complete proof of 496 fault or other criteria which justifies the additional charge or 497 cancellation. 498 7.6.

No insurer shall impose or request an additional 499 premium for motor vehicle insurance, cancel or refuse to issue a 500 policy, or refuse to renew a policy because the insured or the 501 applicant is a handicapped or physically disabled person, so 502 long as such handicap or physical disability does not 503 substantially impair such person’s mechanically assisted driving 504 ability. 505 8.7.

No insurer may cancel or otherwise terminate any 506 insurance contract or coverage, or require execution of a 507 consent to rate endorsement, during the stated policy term for 508 the purpose of offering to issue, or issuing, a similar or 509 identical contract or coverage to the same insured with the same 510 exposure at a higher premium rate or continuing an existing 511 contract or coverage with the same exposure at an increased 512 premium. 513 9.8.

No insurer may issue a nonrenewal notice on any 514 insurance contract or coverage, or require execution of a 515 consent to rate endorsement, for the purpose of offering to 516 issue, or issuing, a similar or identical contract or coverage 517 to the same insured at a higher premium rate or continuing an 518 existing contract or coverage at an increased premium without 519 meeting any applicable notice requirements. 520 10.9. No insurer shall, with respect to premiums charged 521 for motor vehicle insurance, unfairly discriminate solely on the 522

Florida Senate - 2023 SB 1340 29-01330A-23 20231340__ Page 19 of 31 CODING: Words stricken are deletions; words underlined are additions. basis of age, sex, marital status, or scholastic achievement. 523 11.10. Imposing or requesting an additional premium for 524 motor vehicle comprehensive or uninsured motorist coverage 525 solely because the insured was involved in a motor vehicle 526 accident or was convicted of a moving traffic violation. 527 12.11.

No insurer shall cancel or issue a nonrenewal notice 528 on any insurance policy or contract without complying with any 529 applicable cancellation or nonrenewal provision required under 530 the Florida Insurance Code. 531 13.12. No insurer shall impose or request an additional 532 premium, cancel a policy, or issue a nonrenewal notice on any 533 insurance policy or contract because of any traffic infraction 534 when adjudication has been withheld and no points have been 535 assessed pursuant to s. 318.14(9) and (10).

However, this 536 subparagraph does not apply to traffic infractions involving 537 accidents in which the insurer has incurred a loss due to the 538 fault of the insured. 539 (

w) Soliciting or accepting new or renewal insurance risks 540 or payment of certain bonuses by insolvent or impaired insurer 541 prohibited; penalty.— 542 1. Whether or not delinquency proceedings as to the insurer 543 have been or are to be initiated, but while such insolvency or 544 impairment exists, no director or officer of an insurer, except 545 with the written permission of the office, shall authorize or 546 permit the insurer to solicit or accept new or renewal insurance 547 risks in this state after such director or officer knew, or 548 reasonably should have known, that the insurer was insolvent or 549 impaired. 550 2. Regardless of whether delinquency proceedings as to the 551

Florida Senate - 2023 SB 1340 29-01330A-23 20231340__ Page 20 of 31 CODING: Words stricken are deletions; words underlined are additions. insurer have been or are to be initiated, but while such 552 insolvency or impairment exists, a director or an officer of an 553 impaired insurer may not authorize or permit the insurer to pay 554 a bonus to any officer or director of the insurer. 555 3.

As used in this paragraph, the term: 556 a. “Bonus” means a payment, in addition to an officer’s or 557 a director’s usual compensation, which is in addition to any 558 amounts contracted for or otherwise legally due. 559 b. “Impaired” includes impairment of capital or surplus, as 560 defined in s. 631.011(12) and (13). 561 4.2. Any such director or officer, upon conviction of a 562 violation of this paragraph, commits is guilty of a felony of 563 the third degree, punishable as provided in s. 775.082, s. 564 775.083, or s. 775.084. 565

Section

Section 627.0613, Florida Statutes, is amended 566 to read: 567 627.0613 Consumer advocate.— 568

(1) The Chief Financial Officer must appoint a consumer 569 advocate who must represent the general public of the state 570 before the department and the office. The consumer advocate must 571 report directly to the Chief Financial Officer, but is not 572 otherwise under the authority of the department or of any 573 employee of the department. The consumer advocate has such 574 powers as are necessary to carry out the duties of the office of 575 consumer advocate, including, but not limited to, the powers to: 576 (a)

(1) Recommend to the department or office, by petition, 577 the commencement of any proceeding or action; appear in any 578 proceeding or action before the department or office; or appear 579 in any proceeding before the Division of Administrative Hearings 580

Florida Senate - 2023 SB 1340 29-01330A-23 20231340__ Page 21 of 31 CODING: Words stricken are deletions; words underlined are additions. relating to subject matter under the jurisdiction of the 581 department or office. 582 (b)

(2) Have access to and use of all files, records, and 583 data of the department or office. 584 (c)

(3) Examine rate and form filings submitted to the 585 office, hire consultants as necessary to aid in the review 586 process, and recommend to the department or office any position 587 deemed by the consumer advocate to be in the public interest. 588 (d)

(4) Prepare an annual budget for presentation to the 589 Legislature by the department, which budget must be adequate to 590 carry out the duties of the office of consumer advocate. 591

(2) By March 1 of each year, and in conjunction with the 592 department and the office, the consumer advocate shall prepare 593 and make publicly available a report analyzing rate filings in 594 the previous year in which a rate increase was requested and 595 approved by the office and summarizing the grounds on which each 596 increase was approved. 597

Section 10. Paragraph (kk) of subsection (6) of

section 598 627.351, Florida Statutes, is amended to read: 599 627.351 Insurance risk apportionment plans.— 600

(6) CITIZENS PROPERTY INSURANCE CORPORATION.— 601 (kk) A corporation policyholder making a claim for water 602 damage against the corporation has the burden of proving that 603 the damage was not caused by flooding. 604

Section 11. Subsection (3) is added to

section 627.35191, 605 Florida Statutes, to read: 606 627.35191 Required reports.— 607

(3) By January 1 of each year, Citizens Property Insurance 608 Corporation shall also provide to the Legislature and the 609

Florida Senate - 2023 SB 1340 29-01330A-23 20231340__ Page 22 of 31 CODING: Words stricken are deletions; words underlined are additions. Financial Services Commission a supplemental report on an 610 individual and group basis for closed claims. The report must be 611 on a form prescribed by the commission and must include the 612 following information for each claim closed, excluding liability 613 only claims, within the reporting period in this state: 614 (

a) The unique claim identification number. 615 (

b) The type of policy. 616 (

c) The zip code of the property where the claim occurred. 617 (

d) The county where the claim occurred. 618 (

e) The date of loss. 619 (

f) The peril or type of loss, including information about: 620 1. The types of vendors used for mitigation, repair, or 621 replacement; and 622 2. The names of vendors used, if known. 623 (

g) The date the claim was reported to the corporation. 624 (

h) The initial date the claim was closed, including 625 information about whether the claim was closed with or without 626 payment. 627 (

i) The date the claim was most recently reopened, if 628 applicable. 629 (

j) The date a supplemental claim was filed, if applicable. 630 (

k) The date the claim was most recently closed, if 631 different from the initial date the claim was closed. 632 (

l) The name of the public adjuster on the claim, if any. 633 (

m) The Florida Bar number and name of the attorney for the 634 claimant, if any. 635 (

n) The total indemnity paid by the corporation. 636 (

o) The total loss adjustment expenses paid by the 637 corporation. 638

Florida Senate - 2023 SB 1340 29-01330A-23 20231340__ Page 23 of 31 CODING: Words stricken are deletions; words underlined are additions. (

p) The amounts, listed separately, paid for the claimant’s 639 and the corporation’s attorney fees, if any, specifying the 640 amount incurred during prelitigation or appraisal and the amount 641 incurred during arbitration or litigation, as applicable. 642 (

q) The amounts, listed separately, paid in costs for the 643 claimant’s and corporation’s attorney’s expenses, including, but 644 not limited to, expert witness fees. 645 (

r) The contingency risk multiplier, if any, that the 646 claimant’s attorney requested to be applied in calculating the 647 attorney fees awarded to the claimant’s attorney. 648 (

s) The contingency risk multiplier, if any, that a court 649 applied in calculating the attorney fees awarded to the 650 claimant’s attorney. 651 (

t) Any other information deemed necessary by the 652 commission to provide the corporation with the ability to track 653 litigation and claims trends occurring in the property market. 654

Section 12. Paragraph (

f) is added to subsection (2) of 655

section 627.4133, Florida Statutes, to read: 656 627.4133 Notice of cancellation, nonrenewal, or renewal 657 premium.— 658

(2) With respect to any personal lines or commercial 659 residential property insurance policy, including, but not 660 limited to, any homeowner, mobile home owner, farmowner, 661 condominium association, condominium unit owner, apartment 662 building, or other policy covering a residential structure or 663 its contents: 664 (

f) Notwithstanding this

section or any other law to the 665 contrary, an insurer providing homeowners’ insurance may not 666 cancel, nonrenew, or terminate a policy during a pending claim, 667

Florida Senate - 2023 SB 1340 29-01330A-23 20231340__ Page 24 of 31 CODING: Words stricken are deletions; words underlined are additions. except for nonpayment of premium. 668

Section

Section 627.420, Florida Statutes, is amended 669 to read: 670 627.420 Binders.— 671

(1) Binders or other contracts for temporary property, 672 marine, casualty, or surety insurance may be made orally or in 673 writing, and shall be deemed to include all the usual terms of 674 the policy as to which the binder was given together with such 675 applicable endorsements as are designated in the binder, except 676 as superseded by the clear and express terms of the binder. No 677 notice of cancellation or notice of nonrenewal otherwise 678 required by this

chapter shall be required unless the duration 679 of the binder exceeds 60 days. However, for purposes of ss. 680 627.728 and 627.7281, an insurer shall give 5 days’ prior notice 681 of cancellation of a binder, unless the binder is replaced by a 682 policy or another binder in the same or another company. 683

(2) Notwithstanding subsection (1) and any other law, an 684 insurer that issues a homeowners’ insurance binder before 685 closing to a purchaser of residential property may not cancel 686 coverage, require additional repairs as a condition of coverage, 687 or increase the policy premium for the first contract year of 688 the homeowner’s insurance policy. An insurer must perform any 689 required inspections before binding coverage. For a new home 690 purchase, a seller must allow access to the property for the 691 purpose of such inspection before closing. 692

Section 14. Paragraph (

a) of subsection (10) of

section 693 627.701, Florida Statutes, is amended to read: 694 627.701 Liability of insureds; coinsurance; deductibles.— 695 (10)(

a) Notwithstanding any other provision of law, an 696

Florida Senate - 2023 SB 1340 29-01330A-23 20231340__ Page 25 of 31 CODING: Words stricken are deletions; words underlined are additions. insurer issuing a personal lines residential property insurance 697 policy may include in such policy a separate roof deductible 698 that meets all of the following requirements: 699 1. The insurer has complied with the offer requirements 700 under subsection (7) regarding a deductible applicable to losses 701 from perils other than a hurricane. 702 2.

The roof deductible may not exceed the lesser of 2 703 percent of the Coverage A limit of the policy or 50 percent of 704 the cost to replace the roof. 705 3. The premium that a policyholder is charged for the 706 policy includes an actuarially sound credit or premium discount 707 for the roof deductible. 708 4. The roof deductible applies only to a claim adjusted on 709 a replacement cost basis. 710 5. The roof deductible does not apply to any of the 711 following events: 712 a.

A total loss to a primary structure in accordance with 713 the valued policy law under s. 627.702 which is caused by a 714 covered peril. 715 b. A roof loss resulting from a hurricane as defined in s. 716 627.4025(2)(c). 717 c. A roof loss resulting from a tree fall or other hazard 718 that damages the roof and punctures the roof deck. 719 d. A roof loss requiring the repair of less than 50 percent 720 of the roof. 721 722 If a roof deductible is applied, no other deductible under the 723 policy may be applied to the loss or to any other loss to the 724 property caused by the same covered peril. 725

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Section 15. Paragraph (

c) is added to subsection (1) of 726

section 627.7011, Florida Statutes, to read: 727 627.7011 Homeowners’ policies; offer of replacement cost 728 coverage and law and ordinance coverage.— 729

(1) Prior to issuing a homeowner’s insurance policy, the 730 insurer must offer each of the following: 731 (

c) If a homeowner’s insurance policy provides an option 732 with limited coverage, a premium for such reduced coverage which 733 includes a substantial, actuarially sound premium discount or 734 credit for the impact of the reduced coverage. 735 736 An insurer is not required to make the offers required by this 737 subsection with respect to the issuance or renewal of a 738 homeowner’s policy that contains the provisions specified in 739 paragraph (

b) for law and ordinance coverage limited to 25 740 percent of the dwelling limit, except that the insurer must 741 offer the law and ordinance coverage limited to 50 percent of 742 the dwelling limit. This subsection does not prohibit the offer 743 of a guaranteed replacement cost policy. 744

Section

Section 627.70111, Florida Statutes, is created 745 to read: 746 627.70111 Inspections of residential property; required 747 notice to homeowners.—A homeowner must be notified at least 48 748 hours before any inspection of the homeowner’s residential 749 property which is required for insurance purposes, unless the 750 homeowner agrees to a shorter timeframe. 751

Section 17. Paragraph (

a) of subsection (7) of

section 752 627.70131, Florida Statutes, is amended to read: 753 627.70131 Insurer’s duty to acknowledge communications 754

Florida Senate - 2023 SB 1340 29-01330A-23 20231340__ Page 27 of 31 CODING: Words stricken are deletions; words underlined are additions. regarding claims; investigation.— 755 (7)(

a) Within 90 days after an insurer receives notice of 756 an initial, reopened, or supplemental property insurance claim 757 from a policyholder, the insurer shall pay or deny such claim or 758 a portion of the claim unless the failure to pay is caused by 759 factors beyond the control of the insurer which reasonably 760 prevent such payment. The insurer shall provide a reasonable 761 explanation in writing to the policyholder of the basis in the 762 insurance policy, in relation to the facts or applicable law, 763 for the payment, denial, or partial denial of a claim.

If the 764 insurer’s claim payment is less than specified in any insurer’s 765 detailed estimate of the amount of the loss, the insurer must 766 provide a reasonable explanation in writing of the difference to 767 the policyholder. Any payment of an initial or supplemental 768 claim or portion of such claim made 90 days after the insurer 769 receives notice of the claim, or made more than 15 days after 770 there are no longer factors beyond the control of the insurer 771 which reasonably prevented such payment, whichever is later, 772 bears interest at the rate set forth in s. 55.03.

Interest 773 begins to accrue from the date the insurer receives notice of 774 the claim. The provisions of this subsection may not be waived, 775 voided, or nullified by the terms of the insurance policy. If 776 there is a right to prejudgment interest, the insured must 777 select whether to receive prejudgment interest or interest under 778 this subsection. Interest is payable when the claim or portion 779 of the claim is paid.

Failure to comply with this subsection 780 constitutes a violation of this code, and repeated violations 781 constitute an unfair method of competition and an unfair or 782 deceptive act or practice as defined in s. 626.9541. However, 783

Florida Senate - 2023 SB 1340 29-01330A-23 20231340__ Page 28 of 31 CODING: Words stricken are deletions; words underlined are additions. failure to comply with this subsection does not form the sole 784 basis for a private cause of action. 785

Section 18. Subsection (2) of

section 627.70132, Florida 786 Statutes, is amended to read: 787 627.70132 Notice of property insurance claim.— 788

(2) A claim or reopened claim, but not a supplemental 789 claim, under an insurance policy that provides property 790 insurance, as defined in s. 624.604, including a property 791 insurance policy issued by an eligible surplus lines insurer, 792 for loss or damage caused by any peril is barred unless notice 793 of the claim was given to the insurer in accordance with the 794 terms of the policy within 1 year after the date of loss.

A 795 supplemental claim is barred unless notice of the supplemental 796 claim was given to the insurer in accordance with the terms of 797 the policy within 18 months after the date of loss. The time 798 limitations of this subsection are tolled during the period of 799 active duty for an insured in active military service. 800

Section 19. Subsection (4) and paragraph (

a) of subsection 801 (6) of

section 627.70152, Florida Statutes, are amended, and 802 subsection (8) is added to that section, to read: 803 627.70152 Suits arising under a property insurance policy.— 804

(4) INSURER DUTIES.—An insurer must have a procedure for 805 the prompt investigation, review, and evaluation of the dispute 806 stated in the notice and must investigate each claim contained 807 in the notice in accordance with the Florida Insurance Code. An 808 insurer must respond in writing within 10 business days after 809 receiving the notice specified in subsection (3). The insurer 810 must provide the response to the department by e-mail and, to 811 the claimant by e-mail if the insured has designated an e-mail 812

Florida Senate - 2023 SB 1340 29-01330A-23 20231340__ Page 29 of 31 CODING: Words stricken are deletions; words underlined are additions. address in the notice, must provide the response to the insured 813 by e-mail. 814 (

a) If an insurer is responding to a notice served on the 815 insurer following a denial of coverage by the insurer, the 816 insurer must respond by: 817 1. Accepting coverage; 818 2. Continuing to deny coverage; or 819 3. Asserting the right to reinspect the damaged property. 820 If the insurer responds by asserting the right to reinspect the 821 damaged property, it has 14 business days after the response 822 asserting that right to reinspect the property and accept or 823 continue to deny coverage.

The time limits provided in s. 95.11 824 are tolled during the reinspection period if such time limits 825 expire before the end of the reinspection period. If the insurer 826 continues to deny coverage, the claimant may file suit without 827 providing additional notice to the insurer. 828 (

b) If an insurer is responding to a notice provided to the 829 insurer alleging

an act or omission by the insurer other than a 830 denial of coverage, the insurer must respond by making a 831 settlement offer or requesting requiring the claimant to 832 participate in appraisal or another method of alternative 833 dispute resolution. A policy must require a claimant’s consent 834 to participate in appraisal. Appraisal must be invoked within 30 835 days after presentation of a dispute, but may not be initially 836 invoked after the filing of a lawsuit.

The time limits provided 837 in s. 95.11 are tolled as long as appraisal or other alternative 838 dispute resolution is ongoing if such time limits expire during 839 the appraisal process or dispute resolution process. If the 840 appraisal or alternative dispute resolution has not been 841

Florida Senate - 2023 SB 1340 29-01330A-23 20231340__ Page 30 of 31 CODING: Words stricken are deletions; words underlined are additions. concluded within 90 days after the expiration of the 10-day 842 notice of intent to initiate litigation specified in subsection 843 (3), the claimant or claimant’s attorney may immediately file 844 suit without providing the insurer additional notice. 845

(6) ADMISSIBILITY OF NOTICE AND RESPONSE.—The notice 846 provided pursuant to subsection (3) and, if applicable, the 847 documentation to support the information provided in the notice: 848 (

a) Are not admissible as evidence only in a any proceeding 849 regarding attorney fees. 850

(8) ALTERNATIVE DISPUTE RESOLUTION PROCESS.—Notwithstanding 851 any contractual provision to the contrary, any alternative 852 dispute resolution process entered into pursuant to this

section 853 must be authorized by statute. 854

Section

Section 627.70155, Florida Statutes, is created 855 to read: 856 627.70155 Prohibited venue and controlling law provisions.—857 A residential or commercial property insurance policy, including 858 a residential or commercial property insurance policy issued by 859 an eligible surplus lines insurer, may not require: 860

(1) An insured to bring an administrative or legal action 861 in a venue outside of this state; 862

(2) Any arbitration, mediation, or other legal proceeding 863 to be conducted outside of this state; or 864

(3) That a law of a state other than Florida be applied to 865 any legal proceeding between the insured and insurer. 866

Section 21. Paragraph (

a) of subsection (1) of

section 867 627.702, Florida Statutes, is amended to read: 868 627.702 Valued policy law.— 869 (1)(

a) In the event of the total loss of any building, 870

Florida Senate - 2023 SB 1340 29-01330A-23 20231340__ Page 31 of 31 CODING: Words stricken are deletions; words underlined are additions. structure, mobile home as defined in s. 320.01(2), or 871 manufactured building as defined in s. 553.36(13), located in 872 this state and insured by any insurer as to a covered peril, in 873 the absence of any change increasing the risk without the 874 insurer’s consent and in the absence of fraudulent or criminal 875 fault on the part of the insured or one acting in her or his 876 behalf, the insurer’s liability under the policy for such total 877 loss, if caused by a covered peril, shall be in the amount of 878 money for which such property was so insured as specified in the 879 policy and for which a premium has been charged and paid.

A 880 total loss under this paragraph may not be subject to any 881 requirement for the insured to participate in appraisal. 882

Section 22. Subsection (6) of

section 768.79, Florida 883 Statutes, is amended to read: 884 768.79 Offer of judgment and demand for judgment.— 885

(6) For a first-party property insurance breach of contract 886 action, a property insurer may make a joint offer of judgment or 887 settlement, and a plaintiff may make a joint demand for judgment 888 or settlement, which that is conditioned on the mutual 889 acceptance of all the joint offerees. 890

Section 23. This act shall take effect July 1, 2023. 891