Dramatic changes to claims administration for Florida property and casualty (P&C) insurance carriers took effect on March 1, 2023, cutting claim response times in half for both personal and commercial lines.
Gov. Ron DeSantis signed Senate bill 2-A (SB 2-A) into law on December 16, 2022, which arose from the Florida legislature's second special legislative session of 2022, addressing the deterioration of the state's P&C insurance marketplace. The bill enacts many significant revisions to claim-governing sections 627.70131 and 627.70132 of the Florida Statutes.
- 7-7-7 The respective deadlines for insurers to respond to any claim-related communication, begin a claims investigation or provide an adjuster's estimate are reduced from 14 calendar days to seven.1
- Notice of claim In addition to the new seven-day response deadline for any claims-related communication, the carrier's response must include claim forms, instructions and the team's telephone number if the insured's request constitutes an initial notice of claim.2 However, an insured's window for reporting a new or reopened claim is reduced from two years to one, and the deadline to report a supplemental claim is reduced to 18 months (from 36).3
- Claim investigations In addition to giving the insurer only seven days to launch a claims investigation, the deadline to complete any physical inspection of damaged property is cut to 30 calendar days (from 45).4 However, the amended statutes explicitly authorize electronic means of investigating claims a feature absent from the law's predecessor including drones, driverless vehicles, and video conferences between the adjuster and insured.5
- Records SB 2-A also establishes minimum standards for claims-related recordkeeping, including mandates for retaining all communications, property inspections, estimates, claim denials and claim payments.6
- Pay-or-deny SB 2-A mandates a 60-day window, from the date of proof-of-loss, to either pay or deny a claim a 30-day reduction from the prior version of the law.7
- Exceptions and Tolling Insurance carriers are relieved from the seven-day claims communication response window if the insured is represented by counsel, is uncooperative, or engages in fraud.8 Also, the Florida Office of Insurance Regulation (OIR) may extend any "7-7-7" deadline by an additional 30 days in the event (a) that the governor declares a state of emergency; (b) of a security breach under section 501.171(3), F.S.; or (c) of an information technology issue.9
Also, any SB 2-A deadline is tolled (a) in the event that a claim is subject to mediation or alternative dispute resolution; or (b) if an insured fails to respond a claims-related request from an insurer within 10 calendar days of the request, so long as the request is beyond 15 calendar days from the law's 60-day pay-or-deny deadline.10
In-house legal or compliance teams for P&C insurers operating in Florida should promptly meet with claims personnel to validate the implementation of these new market-conduct requirements. Given the prominence of the Florida legislative session that gave birth to SB 2-A, the second such session of 2022, it is likely that the OIR will actively enforce these new provisions and seek to publicize any alleged infraction.