Insurance Issues in the 2011 Florida Legislature

When the Florida Legislature adjourned its 2011 session sine die as dawn approached on May 7, 2011, several important insurance measures had survived and been sent to the governor. These did not include bills to reform insurer "bad faith" litigation, to reduce fraud and limit attorneys’ fees in PIP claims, to restore Citizens Property Insurance Corporation to an insurer of last resort or to change the standard for evaluating expert witness testimony.

In the final days of the session, however, lawmakers passed an Omnibus Property Insurance Bill (SB 408) that enacted many provisions vetoed by the former governor, Charlie Crist. For instance, the bill increases the minimum surplus requirements for residential property insurers, permits expedited recoupment of reinsurance costs and allows insurers to retain a portion of replacement cost claims payments until there is proof the repairs are being made. Each of these provisions had been opposed by the former governor as possibly harmful to consumers. SB 408 continues mandatory sinkhole coverage, but limits coverage to main buildings and discontinues mandatory coverage of driveways, swimming pools and other separate structures. It also revises what constitutes a sinkhole loss, allows hold backs for repairs and reduces the time for sinkhole claims. Like the vetoed Omnibus Property Insurance Bill in 2010, the new legislation also extensively revises regulation of public adjusters in Florida.

Although an Omnibus Insurance Fraud Package covering PIP claims did not pass, several of its proposals were salvaged. An Insurance Fraud Direct Support Organization appears to have been saved, for example, by including the fraud prevention entity in the state budget. Another example is the enactment of new civil penalties for insurance fraud amended onto a "first named insured" bill (HB 1087) defining rights and duties of such persons and replacing "named insureds."

Following two years of discussion, lawmakers enacted and sent to Governor Scotta sweeping revision of the state’s Medicaid program (HB 7107 and HB 7109)requiring Medicaid patients to enroll in managed care plans and providing lawsuit protections for doctors and hospitals that treat them. Another major initiative concerning health insurance encourages insurers to reward participation in wellness programs (HB 445). It permits gifts, premium discounts or other incentives to those insureds who enroll in voluntary wellness programs.

General insurance provisions enacted this session concerned insurer solvency(HB 1007), premium tax calculation on surplus lines (SB 1816), additional rated regulation for commercial insurance (HB 99), and further legislation of rulemaking by state administrative agencies (HB 993).