State publishes property insurance emergency rule

Residential property carriers in Florida have two weeks to certify to the state that they are abiding by the new claims processing requirements that went into effect July 1.

The Office of Insurance Regulation (OIR) published Emergency Rule 69OER23-2, which contains the state-developed attestation form that carriers are required to sign and return to the state by Aug. 1, and annually thereafter on May 1.

The attestation is required as part of a bill (SB 7052) legislators unanimously passed in the spring. Backed by Chief Financial Officer Jimmy Patronis, the measure came months after lawmakers met in Special Session to pass an industry-supported law eliminating the one-way attorney fee statute that allowed policyholders who successfully sued their insurance companies to recoup their attorneys fees and ban policyholders from assigning their benefits to contractors that fixed their homes.

SB 7052 beefs up the muscle OIR can flex over carriers. The measure requires OIR to conduct more frequent reviews of “high-risk” insurers and insurers with high volumes of consumer complaints following a hurricane. The legislation also increases fines require carriers that mishandle claims and requires the OIR to issue quarterly reports on enforcement.

Language also requires OIR to refer possible criminal violations to state or federal law enforcement and reduces the time for companies to respond to an OIR request for information relating to a consumer complaint from 20 days to 14 days, while increasing the penalty for not meeting that deadline from $2,500 to $5,000.

Specifically, SB 7052 requires carriers’ claims-handling manuals to include guidelines and procedures for: initially receiving and acknowledging initial receipt of the claim and reviewing and evaluating the claim; communicating with policyholders, beginning with the receipt of the claim and continuing until closure of the claim; setting the claim reserve; investigating the claim, including conducting inspections of the property that is the subject of the claim; making preliminary estimates and estimates of the covered damages to the insured property and communicating such estimates to the policyholder; the payment, partial payment, or denial of the claim, and communicating such claim decision to the policyholder.

The law also requires residential property carriers to have adequate resources to always meet their claims-handling requirements, including in natural disasters.

Carriers are required to submit electronically or in the mail their claims-handling manuals within 5 days upon request by OIR.

SB 7052 empowered the Financial Services Commission — which has regulatory oversight over OIR, including approving its proposed rules — to develop the attestation form for carriers to sign by Aug. 1.