On March 1, 2023, the Florida Office of Insurance Regulation issued an informational memorandum to all insurers in light of Senate Bill 2-A (SB 2-A) becoming effective as of that date. The law amends various statutes regarding prompt payment, communication, and investigation laws, the use of electronic methods in claims investigations, recordkeeping, and claim filing deadlines.
Prompt Pay
Insurers are now required to communicate with insureds as follows:
- Acknowledgement of a claim or response to communication of an insured must occur within 7 days, reduced from 14 days.
- The time for an investigation to begin, if necessary after proof-of-loss has been received, has been reduced to 7 days from 14 days.
- Physical inspections now must be conducted within 30 days of receipt of a hurricane claim, down from 45 days.
- Copies of any adjuster's reports must be provided to insureds within 7 days after the report has been created.
- Insurers must pay or deny a claim within 60 days, down from 90 days, unless the delay is beyond the control of the insurer.
Insurers are advised to review all in-house claims handling procedures to ensure compliance with the new regulations. The FLOIR has the authority to extend these deadlines for no more than 30 days if the failure to comply is beyond the control of the insurer due to a state of emergency that was declared by the governor, a breach of security that must be reported under s.501.171(3), or an information technology issue has occurred.
The requirements may be tolled if mediation or alternative dispute resolution proceedings are in process, and the tolling ends upon completion of the proceeding. Tolling may also occur if the insured or insured's representative failed to provide material information related to the claim within 10 days of receiving a request for the information by the insurer. The tolling only applies to requests sent by the insurer to the insured or his representative at least 15 days before the insurer is required to make a payment on or deny the claim.
Electronic Investigation
Insurers are now authorized to use electronic methods to investigate losses. Approved methods include but are not limited to the following:
- Electronic photos
- Video recordings of the loss
- Video conferencing between adjuster and insured, including video recording of the loss
- Video recordings or photos of the loss using drones, driverless vehicles, or other machines that can move independently or via remote control.
Insurers may allow insureds to use these and other technologies to assist in the documentation and investigation of a claim. If the insured or another person at the insured's direction uses such methods to commit fraud by providing false, incomplete, or misleading information with the intent to deceive, defraud, or otherwise injure an insurer, the insurer may void the policy. An insurer may still assign an adjuster to physically inspect the property even if electronic methods have been used to report, document, and investigate the loss.
Recordkeeping
Insurers are required to maintain records as follows:
- Claim-related communications between the insurer and insured/insured's representative
- Insurer's receipt of proof-of-loss statements
- Claim-related request for information by insurer to the insured/insured's representative
- Claim-related inspections of property made by the insurer
- Detailed estimates of the amount of loss generated by the insurer's adjuster
- Beginning and ending of any tolling periods
- Payment or denial of any claims
Claim Filing Deadlines
Insureds now have one year after the date of loss to report a new or reopened claim, down from two years previously. The deadline for insureds to report a supplemental claim has been reduced to 18 months after the date of loss from the previous three-year time period. A copy of the notice may be found here.
Christine G. Barlow, CPCU
Christine G. Barlow, CPCU, is Executive Editor of FC&S Expert Coverage Interpretation, a division of National Underwriter Company and ALM. Christine has over thirty years’ experience in the insurance industry, beginning as a claims adjuster then working as an underwriter and underwriting supervisor handling personal lines. Christine regularly presents and moderates webinars on a variety of topics and is an experienced presenter.