Cary, I believe this bill is essentially the same one that has been proposed for the last several years and has failed to gain enough support to pass. It is the companion to HB 813. The main idea is to remedy the "bad faith setup" technique of a plaintiff's lawyer sending a policy limits demand with a short fuse in the hope that the carrier will not respond in time and create an extracontractual claim. The bill seeks to treat third-party bad faith claims in the same way that first-party claims are treated, in that a notice of violation must be filed with the Department of Financial Services, and the insurer has 60 days to respond before a bad faith claim can be filed. The staff analysis for last year's version (HB 427; SB 1224) noted that the change might be unconstitutional, in that it restricts the right of access to the courts. I am not constitutional scholar, so I will leave that analysis to others. As a policyholder lawyer, I am admittedly biased, but it seems to me that this recycled bill should be put out to pasture for good. The third-party liability context is very different from the first-party property context. While this "remedy" may seem simple, you cannot equate the process of adjusting a property insurance claim - which is typically a dispute over the cost of repair - with a liability insurance claim, where a defendant is faced with an unknown and potentially ruinous liability, and is seeking its insurer to protect it against that liability. Liability policies give insurers the right to control the defense of the case and decide when to settle, and so the insurer has the fiduciary duty to act in the best interests of its policyholder. Although the insurer has this fiduciary duty, it also typically defends under a reservation of rights, creating potential conflicts with the policyholder, which continues to face liability that is uncovered or excess of limits even as the insurer makes the defense and settlement decisions. An arbitrary 60-day review period does not take into account the complexity of the case or the status of the case (i.e., recently filed v. eve of trial). Sixty days is far too long when the trial is 30 days away. It may not be enough when a policy limits demand is made soon after a complicated series of events caused a catastrophic accident. There are just too many variables to try to standardize the timing of the insurer's response in the liability context. Florida courts can and do act in a gatekeeping role to dismiss bad faith claims that result from obvious set ups. From there, the standard is a "totality of the circumstances" standard which takes into consideration a variety of factors before an insurer can be found to have breached its fiduciary obligations. I can see no legitimate reason to change this long-honored jurisprudence (which, as far as I am aware, is the law not only in Florida but every other jurisdiction in the country) to create an arbitrary and incongruous process for policyholders to have to follow to hold insurers to their fiduciary obligations. There is no safe harbor for a policyholder that faces bankruptcy due to an excess judgment when its insurer refused to settle a case so that it could roll the dice on a verdict. Why should the legislature give the insurance industry a get-out-of-jail-free card because the policyholder did not know it was required to file a civil remedy notice, or because the plaintiff's counsel decided to demand policy limits while the jury is out deliberating? And, if every plaintiff's lawyer and policyholder lawyer files a civil remedy notice in every third-party liability claim, as a way to create their own "safe harbor" from a malpractice lawsuit, what is the point of this notice at all? Robert H. Friedman Friedman P.A. 340 Royal Poinciana Way, Suite 317-202 Palm Beach, FL 33480 Phone: 561-800-2110 Fax: 561-246-3413 <http://www.friedmanpa.com/> www.friedmanpa.com <http://www.insurancelawflorida.com/> www.insurancelawflorida.com ---------- Forwarded message ---------- From: Wright, Wm. Cary <cwright@carltonfields.com> Date: Mon, Mar 4, 2013 at 9:23 AM Subject: [Liability Insurance] FW: Senate Bill 1284 To: "liability_insurance@lists.flabarrpptl.org" <liability_insurance@lists.flabarrpptl.org> Everyone: I am forwarding an email from Fred Dudley regarding a bad faith insurance bill that has been introduced. Please review and provide us any comment you may have. Fred, what sort of time-frame do you need comments by ? Thanks, Cary From: fred.dudley@hklaw.com [mailto:fred.dudley@hklaw.com] Sent: Monday, March 04, 2013 8:28 AM To: Wright, Wm. Cary Cc: Pence, Scott Subject: Senate Bill 1284 This "bad faith" insurance bill was filed last Thursday by Senator Thrasher, an attorney and chair of the Senate Rules Committee. 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