June 2010 Alert

Greetings,

Welcome to the June edition of the FORC Alert. I hope you find the information useful.  If you have any colleagues that may be interested in this publication, please forward it on. There is a link below this message allowing them to opt-in so they can receive these FORC Alerts automatically.

Best Regards,

Kevin G. Fitzgerald
Editor, FORC Alert

June 2010 Alerts

Blurb

Category(s): Florida - 12/21/2016

Eleventh Circuit Court of Appeals Rules in Favor of the Florida Office of Insurance Regulation's Right to Review Non-Florida Viatical Records

On May 5, 2010, the Eleventh Circuit Court of Appeals ruled in favor of the Florida Office of Insurance Regulation ("OIR") in its litigation with Coventry First, LLC of Florida. The Court affirmed the OIR's right to review non-Florida related records for viatical providers. There are presently 14 licensed viatical settlement providers operating in Florida.

To view the OIR press release on the case, click here.

To view the Court's opinion, click here.

Richard J. Fidei, Esq. - GREENBERG TRAURIG LLP, (954) 768-8286 , fideir@gtlaw.com

Category(s): Florida - 12/21/2016

Florida Governor Charlie Crist Signs Florida Hurricane Catastrophe Fund Contract Year Glitch Fix Bill

SB 1460 became law with the signature of Florida Governor Charlie Crist on April 15, 2010, effectively returning the Florida Hurricane Catastrophe Fund Contract Year to June 1 through May 31 beginning June 1, 2010. To access complete bill information, click here.

Richard J. Fidei, Esq. - GREENBERG TRAURIG LLP, (954) 768-8286 , fideir@gtlaw.com

Category(s): Florida - 12/21/2016

Florida Office of Insurance Regulation Orders Workers' Compensation Insurance Companies to Refund $9.4 Million in Excess Profits

The Florida Office of Insurance Regulation ("OIR") announced on May 18, 2010, that it has ordered 16 workers' compensation insurance companies to return a total of more than $9.4 million in profits to their policyholders pursuant to Florida's excessive profit law.

Fred E. Karlinsky, Esq. - GREENBERG TRAURIG LLP, (954) 768-8278 , karlinskyf@gtlaw.com

Category(s): Florida - 12/21/2016

Florida Office of Insurance Regulation Urges Insurers to Carefully Analyze Their Reinsurance and Risk Transfer Programs

In Informational Bulletin OIR-10-01M issued on April 12, 2010, the Florida Office of Insurance Regulation ("OIR") urged property insurers to carefully analyze their reinsurance and risk transfer programs. The OIR noted that, while it is not requiring the purchase of any specific level of catastrophe reinsurance, such as the 1-in-100 year probable maximum loss level, it will evaluate the entire spectrum of catastrophe risk for each insurer, while recognizing the equal importance of protecting insurer surplus from multiple storms of a smaller magnitude.

To view a copy of the bulletin, click here.

Fred E. Karlinsky, Esq. - GREENBERG TRAURIG LLP, (954) 768-8278 , karlinskyf@gtlaw.com

Category(s): Florida - 12/21/2016

Second Judicial Circuit Court Issues Final Judgment in Public Adjuster Case; Decision Appealed

The Circuit Court of the Second Judicial Circuit for Leon County, Florida, issued a final judgment on May 7, 2010 in Frederick Kortum v. Alex Sink, finding in favor of the Florida Department of Financial Services and upholding section 626.854(6), Florida Statutes. The Court held that the 48-hour solicitation ban on public adjusters is constitutional. A notice of appeal of the Court's decision was filed on May 10, 2010. 

To access a copy of the Court's opinion, click here.

Fred E. Karlinsky, Esq. - GREENBERG TRAURIG LLP, (954) 768-8278 , karlinskyf@gtlaw.com

Category(s): Georgia - 12/21/2016

Georgia Insurance Commissioner Rules That Georgia’s Any Willing Provider Statute Applies to Health Maintenance Organizations Controlled by Health Care Corporations

The Georgia Commissioner of Insurance (the “Commissioner”) recently held in an administrative ruling that Georgia’s “Any Willing Provider” statute, O.C.G.A. § 33-20-16, applies to health maintenance organizations controlled by health care corporations.  The Commissioner declined to rule on the applicability of O.C.G.A. § 33-20-16 to health maintenance organizations that are not controlled by health care corporations.  O.C.G.A. § 33-20-4 authorizes the formation of health care corporations for the purpose of establishing, maintaining, and operating one or more health care plans, and providing administrative or other services to employers or others that offer plans furnishing or reimbursing for health care services, such as establishing, administrating, promoting, and developing programs requested, desired, or sponsored by employers or other groups.  The health care corporation affected by the ruling, Blue Cross Blue Shield of Georgia, and its subsidiary, the health maintenance organization affected by the ruling, Blue Cross Blue Shield Healthcare Plan of Georgia, have appealed the Commissioner’s ruling in the Superior Court of Fulton County, Georgia.  See Order of the Commissioner of Insurance, State of Georgia, in the matter of Northeast Georgia Cancer Care, LLC & Petros Nikolinakos, M.D., v. Blue Cross and Blue Shield of Georgia, Inc. and Blue Cross Blue Shield Healthcare Plan of Georgia, Inc., No. 11001573, April 7, 2010.

Brian T. Casey, Esq. - LOCKE LORD LLP, (404) 870-4638 , bcasey@lockelord.com
Kyllan C Lowe - LOCKE LORD BISSELL & LIDDELL LLP, klowe@lockelord.com

Category(s): Georgia - 12/21/2016

Georgia Supreme Court Clarifies Requirements for an Insurer’s Reservation of Rights to Deny Coverage and When an Insurer is Estopped from Asserting Non-Coverage as a Defense

Responding to certified questions from the United States District Court for the Northern District of Georgia, the Georgia Supreme Court held on May 3, 2010, that where an insurer wishes to disclaim liability and reserve its defenses against an insured when defending an action against the insured under an insurance policy, the insurer must communicate to the insured that, notwithstanding the insurer’s defense of the action against the insured, the insurer disclaims liability and does not waive its defenses against the insured.  According to the court, such a reservation of rights is not required to be made in writing, but it must be unambiguous and should inform the insured of the specific basis for the insurer’s reservations about coverage under the insurance policy.  The court also stated that where an insurer assumes and conducts an initial defense without providing the insured with the insurer’s reservation of rights, the insurer is estopped from asserting a non-coverage defense, regardless of whether the insured can demonstrate prejudice.  In this particular case, the court held that the insurer did not provide an adequate reservation of rights regarding coverage under the commercial general liability policy issued to the insured before defending the action against the insured, and accordingly, the insurer was estopped from asserting a non-coverage defense.  See World Harvest Church v. Guideone Mut. Ins. Co., S10Q0341.

Brian T. Casey, Esq. - LOCKE LORD LLP, (404) 870-4638 , bcasey@lockelord.com
Kyllan C Lowe - LOCKE LORD BISSELL & LIDDELL LLP, klowe@lockelord.com

Category(s): Georgia - 12/21/2016

New Bill Passed Affecting Insured Parties Under Workers’ Compensation Insurance Plans and the Georgia Insurers Insolvency Pool

During its 2010 session, the Georgia Assembly passed Georgia House Bill 1364 (the “Bill”), which will become law provided that it is not vetoed by Governor Perdue.  The Bill allows an insured under a workers’ compensation insurance policy that is affected by an emergency circumstance to receive coverage from the Georgia Insurers Insolvency Pool.  The Bill defines an “emergency circumstance” as “a circumstance in which an association or industrial insured captive insurance company, including such a captive company that subsequently was authorized to transact business pursuant to Chapter 3 of [the Georgia Insurance Code], that is issuing, or which has issued, workers’ compensation insurance contracts and has been declared insolvent.”  This Bill resulted in response to the recent Southeastern U.S. Insurance, Inc. insolvency.

Brian T. Casey, Esq. - LOCKE LORD LLP, (404) 870-4638 , bcasey@lockelord.com
Kyllan C Lowe - LOCKE LORD BISSELL & LIDDELL LLP, klowe@lockelord.com

Category(s): Georgia - 12/21/2016

New Georgia Law Allowing the Sale of Medi-Gap Insurance Policies to Individuals Under the Age of 65

The Georgia Assembly passed Georgia Senate Bill 316 (the “Bill”) in its 2010 session and will become law on November 1, 2010.  The Bill will permit the sale of Medi-gap insurance policies to individuals under the age of sixty-five who qualify for Medicare benefits due to end-stage renal failure or disability. The Bill also provides time frames for when such individuals may enroll in these insurance policies.

Brian T. Casey, Esq. - LOCKE LORD LLP, (404) 870-4638 , bcasey@lockelord.com
Kyllan C Lowe - LOCKE LORD BISSELL & LIDDELL LLP, klowe@lockelord.com

Category(s): Iowa - 12/21/2016

Iowa Requires Public Hearing Prior to Significant Health Insurance Rate Increases Taking Effect

Reacting to public displeasure over needed, but large, increases in rates for individual health insurance, Iowa has enacted a statute requiring all health insurance carriers to notify policyholders of an application for a rate increase greater than the "health spending growth rate " projected by the federal Department of Health and Human Services. The Commissioner is then obligated - does not have discretion - to hold a public hearing on the rate application. The Iowa Consumer Advocate for Insurance presents any public comment solicited by their office on the increase at the hearing in the form of "public testimony." 2010 Iowa Acts, Senate File 2201, sec.8.

Fred M Haskins, Esq. - PATTERSON LAW FIRM, (515) 283-2147 , fhaskins@pattersonfirm.com

Category(s): Louisiana - 12/21/2016

LDOI Regulation of Entities Participating in the Louisiana Medicare Program

Act No. 1 (the “Act”) of the Louisiana Legislature 2010 Regular Session was signed into law by the Governor of Louisiana on April 24, 2010. The Act requires that “any prepaid entity” participating in the Louisiana Medicaid Program is required to obtain a certificate of authority or license the Louisiana Department of Insurance (“LDOI”). The term “prepaid entity” is defined under the Act to mean any organization paid “on a per-person per-month basis for the provision of services to Medicaid eligible beneficiaries, when such organization has entered into a contract” with the Louisiana Department of Health and Hospitals (“LDHH”) assuming a financial obligation to pay for such services. See LSA-R.S. 22:1016(B). Under the Act, these prepaid entities are regulated by the LDOI with respect to licensure and financial solvency. However, with respect to products and services offered under the Louisiana Medicaid Program, these entities are regulated by the LDHH, subject to all other applicable federal and state laws, rules, and regulations relating to the Louisiana Medicaid Program.

Van R. Mayhall, III, Esq. - BREAZEALE, SACHSE & WILSON, L.L.P., (225) 381-3169 , van.mayhall.iii@bswllp.com

Category(s): Mississippi - 12/21/2016

Governor Vetoes Second Wind Pool Funding

Governor Haley Barbour vetoed a portion of the Mississippi Insurance Department's appropriation bill which would have provided another $20 million in funding for the Mississippi Windstorm Underwriting Association.  In March, Barbour vetoed another Wind Pool funding mechanism that provided no new funds, but extended the authority to pay more into Wind Pool.  Since Hurricane Katrina, the Wind Pool program has received $160 million from federal and state taxpayers and insurance ratepayers to subsidize Gulf Coast insurance rates artificially lower than market rates.

Robert B. House, Esq. - JONES WALKER LLP, (601) 949-4830 , rhouse@joneswalker.com
David L. Martin, Esq. - JONES WALKER LLP, (601) 949-4901 , davidmartin@joneswalker.com

Category(s): Mississippi - 12/21/2016

New Insurance Option for Homeowners on Gulf Coast

As the hurricane season approaches, Mississippi's newest domestic property and casualty insurer, Coastal American Insurance Company, is poised to begin writing homeowners insurance coverage on the Mississippi Gulf Coast and other parts of Mississippi.  Coastal American is a privately held, locally owned and managed company that was licensed effective January 1, 2010.

Robert B. House, Esq. - JONES WALKER LLP, (601) 949-4830 , rhouse@joneswalker.com
David L. Martin, Esq. - JONES WALKER LLP, (601) 949-4901 , davidmartin@joneswalker.com

Category(s): New Mexico - 12/21/2016

New Mexico Public Regulation Commission Appoints Interim Superintendent

On May 21, 2010, the New Mexico Public Regulation Commission appointed Craig Dunbar as interim superintendent of insurance.  Dunbar has 35 years experience in the title insurance industry, much of it in management.  Superintendent Mo Chavez resigned on May 4th as a result of fallout from the division's approval of New Mexico Blue Cross Blue Shield's request for a rate increase.  Chavez's interim replacement, longtime division staff member Thom Rushton announced his retirement shortly thereafter.  The Commission is creating a task force of stakeholders to make recommendations to appointment of a new superintendent.

Gary Kilpatric, Esq. - MONTGOMERY & ANDREWS, P.A., (505) 982-3873 , gkilpatric@montand.com

Category(s): New York - 12/21/2016

New York Enacts Life Settlement Legislation

New York has adopted comprehensive life settlement legislation as part of New York Insurance Law Article 78, effective May 18, 2010.  The law prohibits "stranger originated life insurance."  Life settlement brokers are required to be licensed and may receive compensation only pursuant to a memo precisely specifying the amount of the compensation.  All life settlement contracts and applications must be filed and approved prior to use.

Francine L Semaya, Esq. - LEGAL AND REGULATORY CONSULTANT, (732) 241-8090 , flsemaya@gmail.com
William K Broudy, Esq. - NELSON LEVINE de LUCA & HORST, LLC, (212) 233-3254 , wbroudy@nldh.com

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