Friday, November 12, 2004

Emergency Insurance Adjustment Rule

On October 26, 2004, an emergency rule was adopted by the Florida Cabinet setting deadlines for insurance companies to assess, process and settle 2004 hurricane claims. As explained in a press release from the office of Chief Financial Officer Tom Gallagher:

“Floridians who responsibly purchase insurance and pay premiums expect service. ... Firm deadlines will give thousands of Floridians peace of mind in getting their storm claims handled and set a goal that insurance companies must meet.”

Gallagher requested the emergency rule in response to numerous calls to the department’s hurricane hotline at 1-800-22-STORM from storm victims who have yet to see an adjuster or are waiting for an adjuster to return to do a damage assessment.

For Hurricane Ivan victims (among others), the emergency rule establishes a deadline of December 8 for insurance companies "to make initial damage assessments, process and settle claims, including paying additional living expenses to Floridians unable to remain in their homes due to storm damage."

"According to Gallagher, insurance companies who fail to meet the deadlines face an administrative penalty of $2,500 per day."

Click here to access the Notice and Full Text of the emergency rule.

Parts pertinent for Ivan victims are excerpted below:

RULE NO.: Claims Adjustment Requirements 69OER04-19

* * *
On September 16, 2004, Hurricane Ivan caused massive damage in the Florida Panhandle. Hurricane Ivan impacted the Gulf Coast as a Category 4 Hurricane with sustained winds up to 130 miles per hour. The eye made land fall just west of the western Florida state line, bringing hurricane force winds to much of the Florida Panhandle. The hurricane also produced tornados that destroyed and damaged structures in the Florida Panhandle. There was extensive damage in the Pensacola area, which was hit by the strong northeast quadrant of the storm as it made landfall.

This emergency rule is also necessitated by the damage resulting in Florida from Hurricane Jeanne, which made landfall near Stuart, Florida, the night of September 25, 2004, as a Category 3 Hurricane with sustained winds up to 120 miles per hour. On September 26, 2004, the storm made a path northwest across the state.

The Governor of Florida has issued four orders declaring a state of emergency due to the storms (Executive Orders 04-182, 04-192, 04-206, and 04-217). The President of the United States has declared most of Florida a federal disaster area.

In response, the Office of Insurance Regulation has implemented a data call to gather statistics on reported claims, and has instituted methods to monitor insurer performance with regard to the number of claims settled and average days for settlement.

* * *
... [C]omplaints filed with the Department of Financial Services indicate that in thousands of cases no adjuster or other insurance representative has, as yet, met with the claimant; and in many instances where the consumer has met with a company representative, claim payment to repair the damaged property has not been made. The failure to resolve claims, and the resultant inability of insureds to repair damage to residences, poses an immediate threat to public safety and welfare.

* * *
Stephen C. Fredrickson, Assistant General Counsel, Legal Services, Office of Insurance Regulation, 200 East Gaines Street, Tallahassee, FL 32399-4206, (850) 413-4144.

From the full text of the emergency rule:

69OER04-19 Claims Adjustment Requirements

* * *
(4) For all personal lines residential property claims which have been filed with an insurer subject to this rule through the close of business on November 8, 2004, as a result of Hurricane Ivan, or Hurricane Jeanne, the insurer shall have completed the following actions no later than the close of business on December 8, 2004:

(a) All insureds entitled to additional living expenses will have been advanced appropriate funds; and
(b) All damage will have been evaluated and an initial assessment of loss will have been made; and
(c) A good faith and reasonable effort will have been made to settle all claims, and, when applicable, earnest negotiations toward settlement of disputed claims will have begun.

(5) If any claim, as specified in Subsection (4) above, has not been resolved by December 8, 2004, and mediation of such claim has not been initiated under Emergency Rule 69BER04-18, the claim shall be considered a disputed claim for purposes of that rule.

(6) As to any personal lines residential property claim, filed on a date subsequent to the dates indicated in this rule, and arising from any 2004 tropical storm or hurricane, the insurer is required to complete the actions required by paragraphs (a) through (d) of subsections (2) and (4) no later than 30 days from the date that the claim is filed.

(7) If any claim, as specified in Subsection (6) above, has not been resolved within 60 days of filing, and mediation of such claim has not been initiated under Emergency Rule 69BER04-18, the claim shall be considered a disputed claim for purposes of that rule.

(8) The failure of an insurer to comply with the requirements of Subsections (2), (4) and (6) shall be prima-facie evidence in any administrative proceeding, that an insurer has failed to act promptly upon communications with respect to a claim.

(9) All insurers subject to this rule shall file Form OIR-B1-1608, “Affidavit,” rev. 10-04, which is hereby adopted and incorporated by reference to attest to their compliance with this rule. * * * As to claims filed through November 8, 2004, for Hurricane Ivan and Hurricane Jeanne, Form OIR-B1-1608, Part II shall be furnished to, and received by, the Office no later than the close of business on December 15, 2004. The forms shall be submitted by US mail to:

Bureau of Market Investigation, Office of Insurance Regulation
200 East Gaines Street
Tallahassee, FL 32399

or by electronic submission. The form is available at

(10) As to any claim... resulting from Hurricane Ivan or Hurricane Jeanne filed after November 8, 2004, Part III of the form shall be filed, and received by the Office, filed on or before January 1, 2005, and the first day of each month thereafter.

* * *
(12) Pursuant to the provisions of Section 626.9521, Florida Statutes, any insurer which does not comply with the reporting deadlines will be assessed an administrative fine of $2,500.00 for each day the affidavit has not been received by the Office.

(13) Nothing in this rule shall be construed to create a private cause of action.

Specific Authority: 120.54(4), 624.308, 626.9611 FS.

1 comment:

Linda L. said...

Thanks for the info, John. Probably explains why our adjuster, with whom we'd first met well over a month ago, finally put a formal claim together this week.