Thursday, February 12, 2009

Florida House Introduces Bill to Nullify Zota Decision

A bill that would nullify the Florida Supreme Court Decision in Essex vs. Zota and prevent surplus lines carriers from being subject to certain regulation has been introduced in the Florida House of Representatives.

House Bill 853 specifies that provisions of Chapter 627 do not apply to surplus lines insurance and that the act will operate retroactively to October 1, 1988.

In 2008 the Zota case ruled that a section of Chapter 627 of the Florida Insurance Code applied to surplus lines policies, notwithstanding the fact that Chapter 627 contained a provision that specifically stated “this chapter does not apply to surplus lines insurance.” Despite this plain language, the Florida Supreme Court concluded the language was a “scrivener’s error” (legal clerical error). There is some disagreement over the interpretation of the Zota case, but some believe it could be read to mean that all of Chapter 627 could applies to surplus lines insurance.

An informal industry “working group” has been working toward a legislative solution for the problems caused by the decision and the bill introduced could solve the issue.

1 comment:

Tim Hoelle said...

Hard to believe that the Florida Supreme Court showed such little regard for not only the insurance code, but also for those charged with executing and regulating surplus lines business in Florida.

I'm not sure what's more frustrating; the Supreme Court ruling or the fact that we must rely on the legislature to resolve this - properly.

At least someone (Rep Patterson) was willing to sponsor a bill that will hopefully successfully resolve this issue.