PROPOSED
HOUSE OF REPRESENTATIVES AMENDMENTS TO H.B. 2441
(Reference to printed bill)
Strike everything after the enacting clause and insert:
"Section 1. Title 20, chapter 5, article 1, Arizona Revised Statutes, is amended by adding section 20-1122.01, to read:
20-1122.01. Valid assignment of property claims; assignment agreement requirements; voidable agreements; waiver; damages; conflicts
A. After a loss has occurred under a property insurance policy, an insured may assign a claim for benefits arising under the property insurance policy in accordance with the requirements of this section. In order to assign a claim for benefits that arise under a property insurance policy:
1. The insured shall first file a claim for benefits with the insurer before the claim for benefits can be assigned.
2. The proposed assignee shall provide to the insured for the insured to review a form of assignment agreement that complies with the requirements of subsection B of this section.
3. A potential assignee may not offer, direct, pay, promise, allow or provide the insured or other party with, and the insured or other party may not accept, any compensation, gift or other valuable consideration, including a waiver or reduction of the applicable deductible, as an inducement to sign an assignment agreement.
4. If an insured assignor acts pursuant to an urgent or emergency circumstance by protecting, repairing, restoring or replacing property or mitigating further damage to the property, an assignee may not receive an assignment of post-loss benefits under a residential property insurance policy that is in excess of the greater of $5,000 or one percent of the coverage limit under the residential property insurance policy. For the purposes of this paragraph, "urgent or emergency circumstance" means a situation in which a loss to property, if not addressed immediately, will result in additional damage until measures are completed to prevent that damage.
B. The assignment of a claim for benefits arising under a property insurance policy shall be made pursuant to an assignment agreement that complies with the following requirements:
1. The assignment agreement shall contain all of the following provisions that, except as prescribed in subdivision (d) of this paragraph, must be in at least twelve‑point type:
(a) Whether the insured remains liable for any costs that are not covered by the insurance policy.
(b) The interest rate, if any, that the assignee will charge the insured if the insured delays for more than thirty days payment to the assignee after receiving payment from the insurer.
(c) That the assignment agreement does not require the insured to indemnify the assignee against any claims arising out of the services or repairs that the assignee provides.
(d) Whether the assignment authorizes the assignee to sue the insurer on the insured's behalf. If the assignment agreement authorizes the assignee to sue the insurer, the assignment agreement must include the following notice in capital letters and at least fourteen-point type:
You are agreeing to give up certain rights you have under your insurance policy to a third party, which may result in litigation against your insurer. Please read and understand this document before signing it. You have the right to cancel this agreement without penalty within 14 days after the date this agreement is executed. However, you may be obligated for payment for any contracted work performed before the agreement is rescinded. This agreement does not change your obligation to perform the duties required under your property insurance policy.
(e) That the insured assignor has a right of rescission without incurring a fee or penalty if the insured assignor provides a written notice of rescission to the assignee within fourteen days after the execution of the assignment agreement.
C. After the insured has assigned a claim for benefits under a property insurance policy, the insurer, assignee and insured shall comply with the following requirements:
1. The assignee shall notify the insurer or its claims administrator of the assignment of the claim for benefits and provide the insurer or its claims administrator with a copy of the signed assignment agreement, a description or summary of the services or repairs to be provided and an estimate of the cost of the services or repairs to be provided within three business days after the assignment agreement is executed or the date on which the services or repairs begin, whichever is earlier.
2. The assignee, the insured and the assignment agreement shall comply with any requirements, limits and sublimits in the insurance policy, including proof of loss, duties after loss, inspection, cooperation, investigation, appraisal and arbitration provisions.
3. The assignee shall follow any procedures or requirements prescribed in the insurance policy in order to exercise any rights the insured assigns, including any required notification periods before initiating litigation. If the assignment agreement allows the assignee to sue the insurer, the assignee must provide notice to the insured and the insurer at least fifteen days before commencing litigation against the insurer, unless the policy contains a different time frame. The notice must include all of the following information:
(a) The damages in dispute.
(b) The amount claimed.
(c) A detailed estimate or invoice of the services provided, including itemized information on equipment, materials and supplies.
(d) The number of labor hours spent providing the services.
(e) Proof that any work performed was performed according to accepted industry standards.
4. Except as provided in section 20-462, the assignee shall not charge interest on an unpaid balance for services or repairs covered by the insurance policy in excess of the insured's cost sharing requirements during any period of time in which there is a dispute concerning the materials or workmanship of the services or repairs provided by the assignee or concerning the amount of compensation the assignee is entitled to receive for the services or repairs that the assignee provided. This paragraph does not prohibit an assignee from charging interest on any amount that the insurer pays directly to the insured and that the insured fails to remit to the assignee within thirty days after receipt from the insurer, at the rate prescribed in the assignment agreement pursuant to subsection B, paragraph 1, subdivision (b) of this section.
D. If the assignee does not comply with subsection C of this section or if the assignment agreement does not comply with subsection B of this section, the assignment agreement is voidable. If the insured chooses to void the assignment agreement, the insured is relieved of any obligations under the voided assignment agreement.
E. The assignment of a claim for benefits under an insurance policy pursuant to this section does not prevent or inhibit an insurer from communicating with the insured, lienholder or mortgagee listed on the declarations page of the insurance policy that is the subject of the assignment.
F. Notwithstanding any other law, an assignee's acceptance of an assignment agreement constitutes a waiver by the assignee and the assignee's subcontractors of claims against the insured assignor for payments that arise from the assignment agreement and that are more than the insured assignor's deductible or other cost sharing requirements under the insurance policy, any amounts the insurer pays directly to the insured assignor and any charges for services or repairs requested by the insured assignor that are beyond the scope of the necessary repairs or services. The assignee and the assignee's subcontractors may not collect or attempt to collect any amounts from, maintain any action at law against or claim a lien on the real property of an insured assignor, or report an insured assignor to a credit agency, for payments other than the payments prescribed in this section. The waiver remains valid and in effect after the assignment agreement is voided by the insured assignor or after a determination that the assignment agreement is invalid.
G. The amount of damages an assignee may recover in litigation against an insurer is limited to the fair market value of services or repairs performed that are covered by the insurance policy.
H. If an insurer enters into a contract with a service provider to provide services or repairs arising out of a claim for benefits under a property insurance policy and a conflict exists between the contract and the requirements of this section, the terms of the contract between the insurer and the service provider control.
I. This section does not:
1. Prohibit or limit an insured from assigning a direct payment to a third party for services or repairs that are provided in connection with a property or casualty claim, if the insured notifies the insurer or its claims administrator of the proposed assignment of direct payment.
2. Establish any new private right or cause of action or extinguish or limit any existing common law cause of action.
3. Apply to any assignment of claim for benefits under a property insurance policy made by an insured to a new motor vehicle dealer."
Amend title to conform