Some significant amendments to Florida Insurance Bad Faith Law are in the offing if a new bill is passed by the Florida Legislature.
Here is a link to the bill: Download Florida H.R. Bad Faith Amendments Proposed November 2011. Here is a summary of four key provisions:
- It would add a Civil Remedy Notice of Insurer Violation as a condition precedent to bringing a Common Law Bad Faith Claim in Florida. Currently, only Statutory Bad Faith Claims in Florida are required to first proceed through a Civil Remedy Notice. However, the proposed amendments would also change what it means to have a "Civil Remedy Notice" in order to proceed with any Bad Faith Claim in Florida.
- The "common-law duty" which the Insurance Company allegedly violated in Bad Faith would have to be spelled out in the new Notice. What that means is entirely unclear. There is no explanation, no requirement of the level of specificity that the Florida Courts would have to require if this change is made into a Florida Statute.
- The current requirement of a Civil Remedy Notice is to contain a statement "with specificity" to advise the Insurance Company "of the facts and circumstances giving rise to the violation". This has been a source of some contention in Florida Insurance Bad Faith practice. However, the new proposal would add a requirement "if the violation includes failure to pay or tender moneys, the amount of such moneys." This proposal is key. See below.
- Tender of "the amount demanded in the notice" is a major change which this proposal would make to Florida Bad Faith law. There is no amount demanded in the notice -- not in the current Florida Bad Faith Statute, Section 624.155, and not in this proposal. There is absolutely no requirement that any amount be demanded in the notice, even if this proposal is adopted to change the statute. Presumably, "the amount demanded in the notice" is supposed to refer back to the new "tender amount" requirement in 3, above. (The provision I highlighted here as a "key".) However, the proposal only stipulates identifying an amount of what the Insurance Company allegedly "failed to pay or tender".
The reason for existence of Bad Faith remedies is extracontractual damages, that is, damages above, beyond or separate from amounts allegedly due under Insurance Policies. The "amounts of failure to pay or tender" are amounts allegedly due on Insurance Policies, not amounts allegedly due as the result of alleged failures to pay.
Yet, the proposal would enshrine an absolute defense to any and all Insurer Bad Faith Claims in Florida law if the Insurance Company pays the amount allegedly due on its Policy; if it pays the Contract amount it will have an absolute defense to paying any other amounts even if it has held onto the Contract amount for so long that the returns on investment are greater than the Contract amount was in the first place.
This is abolishing Insurer Bad Faith Claims in Florida in hiding.
Why not come right out with a proposal to abolish Insurer Bad Faith Claims in Florida entirely?
There are many people who think that there may be merit in such a proposal as that, to abolish Insurer Bad Faith Claims in Florida completely.
Why don't legislators vote up or down on that proposal? Because they don't have the votes, that's why.
Consumer and Policyholder perspectives on the newly filed bill are offered on Property Insurance Coverage Law Blog in a post on November 1, 2011, "New Bad Faith Bill Filed in Florida Legislature."
The 22nd Annual Bad Faith Litigation Conference of the American Conference Institute is being held in 2011 in Orlando, Florida on November 30 and December 1, 2011. The author will be speaking on both days. Here is a link to the American Conference Institute Website Page which features this Conference including registration. If you or someone you know would like to attend, the ACI is offering a discount to the readers of this weblog. If you would like to explore the ACI discount offer, contact:
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Marc Gerstein
Delegate Coordinator
Office: 1-212-352-3220 x5432
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