March 31, 2025 by William Rabb

March 31, 2025 by William Rabb

The Florida House subcommittee on insurance advanced two hotly debated bills Thursday, one supported by insurance agents but another that was opposed by agents and carriers alike.

And another subcommittee voted to repeal the auto insurance personal injury protection law and increase the minimum liability coverage limits. But it’s far from certain if House Bill 1181 or the Senate version will pass both chambers of the Legislature. Gov. Ron DeSantis seems set to veto the PIP measure if it does pass.

On property insurance, the House Commerce Committee’s subcommittee on insurance and banking approved a new version of House Bill 643, by Rep. John Snyder, a payroll and staffing company owner. The bill, if it is signed into law, would ease the workload for agents searching for surplus lines coverage for hard-to-place properties, by repealing the “diligent effort” currently required by state law. The statute now requires agents to seek coverage from at least three admitted carriers before writing with a surplus lines insurer. That would be removed under the bill.

The Florida Association of Insurance Agents has supported that part of the bill.

“The diligent effort requirement has just been a bureaucratic roadblock that has added delays,” B.G. Murphy, government affairs director for FAIA, said after the meeting.

Well-known plaintiffs’ attorney Chip Merlin argued against the bill, contending that it would weaken consumer protections by allowing insurance agents to move policyholders too quickly to more expensive and less-regulated surplus lines.

“This bill favors those companies that do not want to invest in the admitted market in Florida,” Merlin said in the meeting.

An earlier version of the bill also would have repealed the statutory requirement that agents be appointed with three carriers before writing policies with the state-created Citizens Property Insurance Corp. That section was removed from the pared-down House committee substitute adopted Thursday, but it remains in a Senate bill, SB 1184.

The Senate Banking and Insurance Committee has approved that bill, and it is now in the Senate Judiciary Committee.

A part of HB 643 that saw extensive debate in the House subcommittee on Thursday would give Citizens’ policyholders an upfront option on litigation versus state-managed arbitration in claims disputes. Current law allows either Citizens or the insured to choose, post-claim, when a dispute can be decided by the Florida Department of Administrative Hearings, a state agency that is best known for arbitrating disputes between businesses and state agencies over enforcement actions.

HB 643 would put the arbitration option in the policy language.

“Each insured must be notified in writing, at the time of entering into a policy with the corporation and upon each renewal, that they must decide whether to resolve disputes through arbitration before the Division of Administrative Hearings,” the bill reads. “Such notification must be included, in boldfaced 12-point type immediately preceding the insured’s signature, in the following statement: “AN INSURED MUST CHOOSE AT THE TIME OF ENTERING INTO THIS POLICY OR UPON RENEWAL WHETHER TO RESOLVE DISPUTES THROUGH ARBITRATION BEFORE THE DIVISION OF ADMINISTRATIVE HEARINGS. THE INSURED MUST INDICATE THIS SELECTION BY MARKING ‘ACCEPT’ OR ‘DECLINE’ BELOW. THIS DECISION CANNOT BE CHANGED DURING THE TERM OF THE POLICY.”

While some representatives said that arbitration favors the wealthy who can more easily afford attorneys, the bill’s sponsor said the opposite is true: Litigation in the courts can take years and result in large attorney fees, which only well-heeled policyholders can sustain. A Citizens spokesman said the insurer is reviewing the bill.

Meanwhile, the panel also approved HB 1047, despite concerns from lawmakers that it raised too many unanswered questions and needed more work.

“The bill is not ready for prime time,” said Rep. Mike Caruso, who voted against the measure.

Among other changes, the bill, by Rep. Kim Berfield, would greatly reduce the number of education hours required for an insurance agent’s license. Berfield said Florida now requires more hours than any other state. The next-closest state, New York, mandates just 90 hours of education for agents. So, after extensive research, Berfield landed on 60 hours, she said, without further explanation.

The FAIA has opposed the bill, noting that Florida’s ever-changing and crisis-prone property insurance market should not be left to inexperienced dilettantes. Regulations already allow exemptions to the 200-hour rule for those with extensive experience working at an insurance agency, FAIA’s Murphy explained. The FAIA does not have a financial interest in providing education courses for agents, Murphy said.

The section of the bill that received the most debate was one that would amend the 2023 tort-reform statute provisions on alleging bad faith by insurance companies. Insurance groups and consumer advocates both opposed the wording.

The bill would allow “sufficient evidence” of a claim to include photographs or surveillance video of an accident, or medical bills. But several committee members decried a provision that would let insurers object to the evidence within 10 days, while policyholders would then have just 10 days to respond. It also would allow carriers to cancel or non-renew policies before repairs are completed if the insured no longer has an insurable interest in the property.

“What about an older person whose house is gone after a storm, who has moved in to her children’s house out of state, and the insurance company mails the notice to the house that’s not even there anymore?” Caruso asked. “She has just 10 days to respond to a letter she never even got?”

The Florida Justice Reform Institute’s president, William Large, spoke at the meeting and said the bill would threaten the HB 837 tort-reform law approved in 2023, which raised the bar on plaintiff’s bad-faith claims. That 2023 law gives insurers 90 days to tender the policy limits in claims, and that has worked well for two years, Large said. The Florida Insurance Council also opposes HB 1047.

Nonetheless, the subcommittee voted 12-6 in favor of the bill Thursday, with members suggesting that the bugs can be worked out in the next committee to hear the bill.

Photo: Snyder explains HB 643 at the Capitol Thursday. (The Florida Channel)

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