December 2012 Alert

Greetings,

Welcome to the December 2012 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,

David K. Liggett

Editor, FORC Alert

December 2012 Alerts

Blurb

Category(s): Arizona - 12/01/2012

Arizona Insurance Exchange

Yesterday Arizona Governor Jan Brewer notified the US Department of Health and Human Services that the State of Arizona does not intend to operate its own State-based Health Insurance Exchange.  Governor Brewer said that the failure of CMS to timely issue guidance for the states made it impossible for Arizona to make an informed decision.

S. David Childers, Esq. - KUTAK ROCK LLP, (480) 429-4880 , David.Childers@KutakRock.com

Category(s): Arizona - 12/01/2012

New Arizona Director

Arizona Governor Jan Brewer recently appointed Germaine "Gerrie" Marks as the Director of the Arizona Department of Insurance.  Ms. Marks had been serving as interim-Director pending a formal appointment by Governor Brewer.  Arizona Senate confirmation is now required for formal appointment and is expected to occur in the early stages of the next Arizona Legislative Session.   Ms. Marks has been with the Arizona Department for many years and has served in a variety of capacities, including, Deputy Director.

Kathy A. Steadman, Esq. - COPPERSMITH BROCKELMAN, (602) 381-5480 , ksteadman@cblawyers.com

Category(s): Connecticut - 12/01/2012

Connecticut Insurance Department Provides Health Insurance Exchange Guidance

In anticipation of the launch of the state’s Health Insurance Exchange in January 2014, the Connecticut Insurance Department (the “Department”) has issued guidance for the filing of individual and small employer group health insurance policy forms.  Bulletin HC-90 affirms that all policy forms are subject to prior approval, provides a list of the essential health benefits for the benchmark plan in 2014 and 2015, and includes a number of detailed requirements to facilitate the Department’s processing of the anticipated high volume of filings.  Policy forms must be numbered in accordance with state requirements, and will be approved in advance of rate filings.  Separate schedules of benefits must be filed for each unique offering after the Center for Consumer Information and Insurance Oversight publishes their calculator for determining the Actuarial Value of the essential health benefits.

Michael T. Griffin, Esq. - ACCEL LAW GROUP, (860) 761-8550 , mgriffin@accelcompliance.com

Category(s): Connecticut - 12/01/2012

Holding Company Act Regulation Proposed by Connecticut Insurance Department

On November 16, 2012, the Connecticut Insurance Department held a hearing on proposed amendments to the regulation on the Insurance Holding Company Act, which was amended during the state's June 12 Special Session.  The amendments to the holding company regulation, along with the statute, substantially track the updated NAIC Insurance Company Holding System Model Act and Regulation that have been favorably received throughout much of the nation.  The updated NAIC Model Act and Regulation are intended to modernize the regulatory supervision of insurance holding company systems by increasing the level of regulatory scrutiny possible while assuring companies that information shared with regulators will be kept confidential.

Alan J. Levin, Esq. - LOCKE LORD LLP, (860) 541-7747 , alan.levin@lockelord.com

Category(s): Florida - 12/01/2012

Florida Hurricane Catastrophe Fund Publishes Final Adopted 2013/2014 Reimbursement Contract

The Florida Hurricane Catastrophe Fund has published its final adopted 2013/2014 Reimbursement Contract, Addenda and Optional Amendment, along with related Rule 19-8.010.  To view these items, click here.

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

Category(s): Florida - 12/01/2012

Florida Office of Insurance Regulation Appeals “Secure Door” Final Order Invalidating Wind Mitigation Discount Forms

The Florida Office of Insurance Regulation (“OIR”) is appealing a Final Order issued by the Florida Division of Administrative Hearings (“DOAH”) in Secure Enterprises, LLC v. Office of Insurance Regulation, DOAH Case No. 12-1944RX, which held that certain forms relating to Florida wind mitigation insurance discounts are invalid.  Specifically, DOAH held that the OIR’s adoption of Rules 69O-170.017 and 69O-170.0155, F.A.C., which incorporated Form OIR-B1-1655 (Notice of Premium Discounts for Hurricane Mitigation) and Form OIR-B1-1699 (Windstorm Mitigation Discounts; Single Family Residences) constituted an invalid exercise of delegated legislative authority.  To view a copy of the Final Order, click here.

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

Category(s): Florida - 12/01/2012

Florida Office of Insurance Regulation Clarifies Order on Property and Casualty Forms Expedited Review Process, Self-Certification Requirements

On December 3, 2012, the Florida Office of Insurance Regulation issued Order No. 130176-12, clarifying certain components of its June 25, 2012 Order establishing an expedited review and self-certification process for all property and casualty personal lines forms, except workers' compensation, and exempting these forms from the requirements of s.627.410, F.S..  To access the Order, which is effective from its date of issue until June 24, 2013, click here. 

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

Category(s): Florida - 12/01/2012

Florida Office of Insurance Regulation Clarifies Personal Injury Protection Medicare Fee Schedule Application Under HB 119

In Informational Memorandum 12-06M issued on November 6, 2012, Florida Insurance Commissioner Kevin McCarty clarified the Medicare fee schedule required under HB 119, the Personal Injury Protection insurance reform bill enacted this year.  To access the Memorandum, click here.

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

Category(s): Florida - 12/01/2012

Florida Office of Insurance Regulation Officially Approves 6.1 Workers' Compensation Rate Increase Following Corrected Filing by National Council on Compensation Insurance (NCCI)

The Florida Office of Insurance Regulation has officially approved a 6.1 percent rate increase for the National Council on Compensation Insurance, it announced on November 5, 2012.  On October 26, the OIR stated its intention to approve the increase pending a resubmission of the filing to correct technical issues.  The increase will be effective January 1, 2013 for workers' compensation insurance rates in Florida.  To access the Order, click here.

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

Category(s): Florida - 12/01/2012

Florida's Citizens Property Insurance Prevails in Late-Reported Hurricane Wilma Claim

During early October 2012, in Slominski v. Citizens Property Insurance Corporation, the Fourth District Court of Appeal issued its third opinion in the last three months on the issue of late notice relating to an insurance claim arising from Hurricane Wilma.  To view the Opinion, click here.

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

Category(s): Georgia - 12/01/2012

Landrum et. al. v. Infinity Safeguard Insurance Company, A12A1179, Georgia Court of Appeals (November 20, 2012).

On November 20, 2012, the Georgia Court of Appeals affirmed the grant of summary judgment in favor of Infinity Safeguard Insurance Company (“Safeguard”) and its argument that the policy of insurance at issue in the case included an exclusion from coverage of the insured from bodily injury coverage provided under the insurance policy.  The case arose from an accident that occurred while the insured was a passenger in her car which her grandson was driving.  The accident was the fault of the grandson and he was not separately insured.  The insured sued the grandson for recovery of her medical costs associated with the accident.  The grandson sued Safeguard alleging that the exclusion of the insured from recovering under the bodily injury coverage was void against public policy because he was covered under the insured’s policy (i.e., permissive driver) and that denial of the bodily injury coverage harmed an innocent party and subjected the grandson to unfair and unanticipated liability.  Applying the general rule in Georgia against voiding a policy’s exclusion of coverage of a permissive driver, the Georgia Court of Appeals concluded that the bodily injury policy exclusion was not void as against public policy and upheld the summary judgment in favor of Safeguard.

Brian T. Casey, Esq. - LOCKE LORD LLP, (404) 870-4638 , bcasey@lockelord.com
Trey Sivley, Esq. - LOCKE LORD LLP, (404) 870-4657 , tsivley@lockelord.com

Category(s): Georgia - 12/01/2012

Lumpkin County, Georgia v. Georgia Insurers Insolvency Pool, S12A1451, Georgia Supreme Court (November 23, 2012)

On November 23, 2012, the Georgia Supreme Court affirmed the grant of summary judgment to the Georgia Insurers Insolvency Pool (“GIIP”) respecting the claim of Lumpkin County that its pending worker’s compensation claims were covered by the GIIP after the insolvency of the County’s insurer, Southeast U.S. Insurance Company.  The Georgia Supreme Court rejected the Lumpkin County’s arguments that O.C.G.A. § 33-36-3(4)(G) did not apply to Georgia counties and that “net assets,” as defined therein, included Lumpkin County’s restricted net assets which totaled approximately $66 million.  In rejecting Lumpkin County’s arguments the Supreme Court noted that O.C.G.A. § 33-36-3(4)(G) plainly excludes from coverage by the GIIP the claims of insureds where the insureds have a net worth in excess of $25 million.

Brian T. Casey, Esq. - LOCKE LORD LLP, (404) 870-4638 , bcasey@lockelord.com
Trey Sivley, Esq. - LOCKE LORD LLP, (404) 870-4657 , tsivley@lockelord.com

Category(s): Georgia - 12/01/2012

Maxum Indemnity Company v. Jimenez, A12A0992, Georgia Court of Appeals (November 28, 2012)

On November 20, 2012, the Georgia Court of Appeals affirmed the denial of Maxum Indemnity Company’s (“Maxum”) motion for summary judgment in its declaratory action against its insured, Jose A Jiminez, and a claimant, Gill Plumbing Company.  In the declaratory action, Maxum sought a judgment that its commercial general liability (“GCL”) insurance policy did not cover the liability associated with Jiminez’s negligent pipe installation on a construction project that resulted in property damage to a dormitory at Georgia Southern University.  In affirming the denial of the summary judgment sought by Maxum, the Court of Appeals rejected Maxum’s argument that the Jiminez’s negligent installation was not an occurrence under the GCL policy.  The Court of Appeals also rejected Maxum’s argument that the contractual liability exclusion of the GCL policy applied because Jiminez’s liability arose from his own negligence and not from a contractually assumed liability.  Finally, the Court of Appeals rejected Maxum’s argument that the “contractors limitation endorsement” applied to property damage suffered by a non-contractor, in this case the property damage sustained by Georgia Southern University.  The Court of Appeals noted that to hold otherwise would render the coverage afforded under the GCL policy illusory.

Brian T. Casey, Esq. - LOCKE LORD LLP, (404) 870-4638 , bcasey@lockelord.com

Category(s): New Mexico - 12/01/2012

New Mexico Health Insurance Exchange

Throughout 2012, the New Mexico Human Services Department has been feverously working on the development of a health insurance exchange for New Mexico.  While no official notification has been issued on New Mexico’s intent to establish a state-based exchange, the Department has conducted organizational meetings and has indicated that a state-based exchange will be developed for New Mexico.  To this end, the Department has circuited a health insurance exchange blueprint for public comment and has indicated that it will notify the U.S. Health and Human Services Department of the State’s intent to develop a state-based exchange.

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

Category(s): New Mexico - 12/01/2012

New Office of the Superintendent of Insurance

On November 6, 2012, the voters of New Mexico voted to create a new Office of the Superintendent of Insurance.  With the passage of the constitutional amendment, the Insurance Division was removed from the New Mexico Public Regulation Commission and the office of "Superintendent of Insurance" was created as of July 1, 2013.  Under the constitutional amendment, the Superintendent of Insurance is charged with the duty to regulate insurance companies and others engaged in risk assumption in such manner as provided by law.  The Public Regulation Commission has control over the regulation insurance companies and others engaged in risk assumption until July 1, 2013.  Under the constitutional amendment, the Superintendent of Insurance shall be appointed by a newly created insurance nominating committee and shall serve such terms as provided by law.  The term of the first Superintendent of Insurance shall begin on July 1, 2013, and end on December 31, 2015.  During the 2013 legislative session, the New Mexico Legislature and the Governor will consider legislation to determine whether the Office of Superintendent will be a standalone agency or part of the Executive Branch, the composition of the newly created nominating committee, and the terms of office for the Superintendent of Insurance.

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

Category(s): New Mexico - 12/01/2012

New PRC Commissioners

The New Mexico Public Regulation Commission will have two new commissioners in 2013.  In the only contested race for the two commission seats up for election, Democrat Karen Montoya comfortably defeated Republican Chris Ocksrider for the District 1 position.  The district incorporates much of Albuquerque and Bernalillo County.  Montoya currently holds the elected position of Bernalillo County Tax Assessor, but she has indicated that she would step down from the position if elected to the PRC.  Montoya will succeed two-term Democrat Jason Marks.  In District 3, Democrat Valerie Espinoza, two-term county clerk in Santa Fe County, was unopposed.  The district encompasses much of north-central New Mexico, including Santa Fe, Rio Rancho and part of Albuquerque.  Espinoza will follow Independent Douglas Howe, who was appointed last year to fill the remaining term of Jerome Block Jr., who resigned last year after pleading guilty to felony charges related to fraudulent use of a state credit card.  The commissioners-elect will give the five-member PRC three female members for the first time.  The new commissioners will join Theresa Becenti-Aguilar, also a Democrat, and Republicans Pat Lyons and Ben Hall.

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

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