November 2017 Edition of Alerts

Welcome to the November 2017 edition of the FORC Alert. If you have any colleagues that may be interested in this publication, please forward it on. There is a link on the Alerts main page where they can subscribe to receive FORC Alerts automatically.

Regards,
Ryan Smart, Esq., FORC Alert Editor
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Category(s): Connecticut - 11/20/2017

Connecticut Enacts Omnibus Insurance Law

Connecticut Governor Dannel P. Malloy recently signed House Bill 7183 (the “Act”), which makes various changes to the state’s insurance laws. The Act, among other changes, creates a new section of the insurance code pursuant to which a dormant captive insurer may apply for a certificate of dormancy from the insurance commissioner. It also reduces the amount of unimpaired and paid-in capital and surplus that a sponsored captive insurer is required to maintain. The bill will now be referred to as Public Act No. 17-198, and may be accessed here.

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

Category(s): Florida - 11/20/2017

AOB Bill Approved by House Judiciary Committee

On November 14, 2017, The Florida House Judiciary Committee approved legislation which is designed to address the ongoing concerns about inflated home repair claims as a result of assignment of benefits (AOB).  In a 13-5 vote, Judiciary Committee members shared mixed criticism about insurers pressing policyholders to accept their preferred vendors before a vote.  The industry and its business allies blame a spike in AOB claims on fraud and other types of abuse, while attorneys and contractors blame bad faith largely by limiting a number of insurers that make inadequate claim offers or delays altogether.  Additionally the bill would also put pressure on contractors and insurers to file and respond sooner.  This move will encourage parties to settle disputes out of court by limiting their ability to recover attorney fees.  The PCM, the proposed amendment and the staff analysis are provided here:  
•	PCB JDC 18-0PCB JDC 18-01 a1 (Amendment)pcb01.JDC (Analysis).

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

Category(s): Florida - 11/20/2017

Citizens Issues Personal Lines Bulletin Regarding OIR Approved Rules & Endorsements

Citizens Property Insurance Corporation issued a personal lines bulletin on October 16, 2017, advising that the Florida Office of Insurance Regulation has approved new rules and endorsements filed by Citizens for residences held in trust which apply to personal residential new-business submissions with effective dates on or after December 1, 2017.  Information will be provided when available regarding changes for existing policies with residences held in trust.  Revisions were also made to the Trust Endorsement forms to provide clarification and amend certain language in the forms.

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

Category(s): Florida - 11/20/2017

DFS Proposes Amendments to Medical Reimbursement Manuals

The Department of Financial Services Division of Workers’ Compensation has proposed rule amendments for updating maximum reimbursement allowances for various medical services provided by health care providers, ambulatory surgical centers, and hospitals.  The Three-Member Panel approved these recommended changes on April 19, 2017.  The proposed rule amendments may be accessed below:
	
69L-7.501: https://www.flrules.org/gateway/View_Notice.asp?id=19642032 
69L-7.100: https://www.flrules.org/gateway/View_Notice.asp?id=19641935 
69L-7.020: https://www.flrules.org/gateway/View_Notice.asp?id=19641741 
 
A public hearing on the proposed rule amendments has been scheduled for November 21, 2017.  Below you may access the draft reimbursement manuals corresponding to the proposed amendments: 

•	Draft of the Florida Workers' Compensation Health Care Provider Reimbursement Manual, 2017Draft of the Florida Workers' Compensation Reimbursement Manual for Ambulatory Surgical Centers, 2017Draft of the Florida Workers' Compensation Reimbursement Manual for Hospitals, 2017 

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

Category(s): Florida - 11/20/2017

Florida Office of Insurance Regulation Approves Decrease in Workers' Comp Rates

Florida Insurance Commissioner David Altmaier has issued a Final Order granting approval to the National Council on Compensation Insurance (NCCI) for a statewide overall rate level decrease of 9.5% and premium level decrease of 9.8%. This applies to both new and renewal workers’ compensation insurance policies effective in Florida as of January 1, 2018.  NCCI received this approval after submitting an amended rate filing to the Office on November 7, 2017, which met the stipulations of an Order issued by the Commissioner on October 31, 2017.    For more information about the NCCI public hearing and rate filing, visit the Office’s “NCCI Public Rate Hearing” webpage.

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

Category(s): Florida - 11/20/2017

House Commerce Committee Approves Workers' Comp Legislation

The House Commerce Committee approved proposed committee bill (PCB) COM1 by Rep. Danny Burgess (R-Zephyrhills) and will now head to the House floor.  Similar to the assignment of benefits bill also approved, this proposal is tagged by Speaker Richard Corcoran (R- Lutz) for quick passage in the House.  The language is very similar to the measure the House approved last session with only minor exceptions.  An amendment was added to the bill today by Rep. Burgess which would limit the hourly rate cap to $150/hour.

Amendments were also proposed by Rep. Sean Shaw (D-Tampa) which would have allowed employees to seek a one-time second medical opinion, increased the level of permanent impairment benefits for employees and removed limits on permanent impairment income benefits for psychiatric injuries.  Rep. Evan Jenne (D-Hollywood) offered an amendment that would allow a judge of compensation claims (JCC) to increase the attorney fees award for certain reasons and remove limits on attorney fees for medical only claims.  None of the amendments were approved.  Below are links to the PCB and the amendments:  
•	PCB COM 18-01PCB COM 18-01 a1 (Amendment)PCB COM 18-01 a2 (Amendment)PCB COM 18-01 a3 (Amendment)PCB COM 18-01 a4 (Amendment)

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

Category(s): Florida - 11/20/2017

PIP repeal: House panel votes to overturn no-fault plan in Florida

In an 18-7 vote, a House panel voted to overturn Florida’s no-fault car insurance system.  HB 19 sponsored by Rep. Erin Grall, R- Very Beach, repeals the state’s Personal Injury Protection law that has been in effect since 1971 and replaces it with required bodily-injury liability coverage, which most Florida drivers already have.  Florida drivers are generally not happy with the current system.  Indeed, many have argued that the current system forces drivers to pay for a form of car insurance long plagued by fraud and high costs and also allows Florida’s unsafe drivers to avoid responsibility while safe drivers are forced to pay the bill.  HB 19 is set to go before the House floor when the 2018 session starts in January.

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

Category(s): Florida - 11/20/2017

Promising AOB Ruling

On October 20, 2017, Florida’s Second District Court of Appeal affirmed per curiam (without opinion) a Manatee County Circuit Court decision, in Bio Logic, Inc. v. ASI Preferred Insurance Corp., in which ASI sought to enforce its policy language requiring that an insured party, such as the bank as mortgagee, must consent to an Assignment of Benefits (AOB).  The trial court agreed and dismissed the case “due to the assignment of benefits not including the written consent of the mortgagee.”  This case is distinguished from other reported Florida AOB cases in that it focused on an enforceable provision of the policy rather side-stepping into the public policy refrain of whether the right to post-loss benefits under a policy could be assigned.

A. Kenneth Levine, Esq. - COZEN O'CONNOR, (561) 515-5256 , klevine@cozen.com

Category(s): Georgia - 11/20/2017

Blue Ridge Auto Auction v. Acceptance Insurance Company

On October 24, 2017, the Georgia Court of Appeals ruled a garage insurance policy Acceptance Indemnity Company had issued to the Tommy Nobis Foundation provided coverage for an automobile accident which occurred at the Blue Ridge Auto Auction, which was auctioning vehicles donated by the Tommy Nobis Foundation.  Acceptance’s garage insurance policy issued to the Tommy Nobis Foundation provided coverage for its “garage business.”  Acceptance had denied coverage under the garage insurance policy, arguing that the accident at the auto auction was not part of the Tommy Nobis Foundation’s garage business.  The Court found that the term “garage business” was sufficiently ambiguous to include operations incidental to the Tommy Nobis Foundation’s sale of donated used vehicles.

Brian T. Casey, Esq. - LOCKE LORD LLP, (404) 870-4638 , bcasey@lockelord.com
David M. Green, Esq. - LOCKE LORD LLP, (404) 870-4657 , david.green@lockelord.com

Category(s): Georgia - 11/20/2017

Department Issues Bulletin Reminding Surplus Lines Brokers that Fees are Prohibited in the State of Georgia

On September 27, 2017, The Department of Insurance issued Bulletin 17-EX-1 which applies to all insurance companies, brokers and agents selling, soliciting or negotiating surplus lines insurance in Georgia.  The Bulletin reminds surplus lines brokers that they are prohibited from charging customers added fees in excess of the amount of premium shown on a surplus lines insurance policy.  

The Department has stated that collecting fees in excess of the monies specified in the policy are considered an unfair method of competition and an unfair and deceptive act or practice in the insurance business and is a violation of the Georgia Unfair Trade Practices Act.  The Commissioner can impose a monetary penalty of up to $5,000.00 for every act or violation of the Georgia Unfair Trade Practices Act.

Tony Roehl, Esq. - MORRIS, MANNING & MARTIN, LLP, (404) 495-8477 , troehl@mmmlaw.com

Category(s): Georgia - 11/20/2017

Georgia Farm Bureau Mutual Insurance Company v. Rockefeller

On September 29, 2017, the Georgia Court of Appeals affirmed the trial court’s grant of summary judgment to Jerry Rockefeller in a case interpreting O.C.G.A. §33-7-11 (i) regarding the limitation of liability provisions in the uninsured motorist insurance policies Rockefeller held with Georgia Farm Bureau.  Rockefeller was involved in a two-car automobile accident from which he sustained personal injuries.  The other driver’s insurance company paid $25,000 to settle Rockefeller’s claims.  Because Rockefeller was working when the accident occurred, he received worker’s compensation insurance wage benefits totaling $197,966, were less than he was earning at the time of the accident and he accumulated $183,022 in lost wages.  

Rockefeller sought additional compensation under four UM policies he held with Georgia Farm Bureau. Each policy provided up to $25,000 in UM benefits for a combined policy limit of $100,000 and contained a "limit of liability" clause which reduced the UM limits of liability for sums paid under worker’s compensation law.
 
Georgia Farm Bureau moved for summary judgment, arguing that because the amount of workers' compensation benefits Rockefeller received exceeded the combined coverage limits of his UM policies, Georgia Farm Bureau's liability under the UM policies was reduced to zero. Rockefeller filed a cross-motion for partial summary judgment, arguing that his UM policies should cover up to $100,000 of his uncompensated damages and future medical expenses that were not covered by his settlement with the other driver's insurer or his workers' compensation award.  The trial court denied Georgia Farm Bureau’s motion for summary judgment and granted Rockefeller’ cross motion for partial summary judgment. 

On appeal, Georgia Farm Bureau argued that the trial court misapplied O.C.G.A. § 33-7-11 (i) with regard to the limitation of liability provision in Rockefeller’s UM policies that O.C.G.A § 33-7-11(i) and the limit of liability of the UM policies allowed an offset the Rockefeller's workers' compensation award-against its combined liability of $100,000 under the UM policies, thus reducing Georgia Farm Bureau's liability to zero. However, the Georgia Court of Appeals found that the trial court properly concluded that the UM statute does not permit the dollar-for-dollar reduction in the limits of UM policies. Rather, Georgia Farm Bureau was liable up to the $100,000 combined coverage limit of the four UM policies for losses sustained in the accident that were not covered by Rockefeller’s worker's compensation award or his settlement with the other driver's insurer.

Brian T. Casey, Esq. - LOCKE LORD LLP, (404) 870-4638 , bcasey@lockelord.com
David M. Green, Esq. - LOCKE LORD LLP, (404) 870-4657 , david.green@lockelord.com

Category(s): Georgia - 11/20/2017

Georgia Insurance Commissioner Issues Surplus Lines Insurance Policy Fees Bulletin

On September 25, 2017, the Georgia Insurance Commissioner issued Bulletin 17-EX-1, reminding surplus lines insurers and brokers that charging an insured fees in excess of the premium and other charges stated in a surplus lines placed insurance policy is a prohibited unfair trade practice for which a $5,000 penalty can be imposed.

Brian T. Casey, Esq. - LOCKE LORD LLP, (404) 870-4638 , bcasey@lockelord.com
David M. Green, Esq. - LOCKE LORD LLP, (404) 870-4657 , david.green@lockelord.com

Category(s): Georgia - 11/20/2017

Prudential Ins. Co. of America v. Bailey

In Prudential Ins. Co. of America v. Bailey, No. CV 616-060 (S.D. Ga., Sep. 29, 2017), a federal district court in Georgia refused to dismiss claims brought against a life insurer by a surviving spouse accused of killing her husband after Prudential froze the account established by Prudential and into which it had previously deposited the proceeds of his life insurance policy.  The apparent mistake by Prudential was that it had, in effect, paid the wife the death benefit proceeds by depositing them into an account, maintained for her benefit by the insurance company.  Prudential had notified her, “We have approved your group life insurance claim and have settled your benefit through Prudential's Alliance Account settlement option.  An interest bearing account [maintained by Prudential] has been established in your name.  With the Alliance Account, you can access your money immediately by writing a draft for the amount you'd like to withdraw.  You can withdraw the entire amount immediately, which will close the account, or you can write drafts as needed.  Any balance you maintain will earn continuous interest.”  After her indictment, she withdrew $83,855.50 from the account.  Claims brought by Ms. Bailey against Prudential for conversion, punitive damages, fraud, bath faith and attorney’s fees (under the Georgia bad faith statute) survived Prudential’s motion to dismiss.

Brian T. Casey, Esq. - LOCKE LORD LLP, (404) 870-4638 , bcasey@lockelord.com
David M. Green, Esq. - LOCKE LORD LLP, (404) 870-4657 , david.green@lockelord.com

Category(s): Georgia - 11/20/2017

Women’s Surgical Center LLC et al. v. Berry

On October 16, 2017, the Georgia Supreme Court upheld the state’s Certificate of Need (CON) law.  The challenge to the Georgia CON law was brought by the Georgia Advance Surgery Center for Women in Cartersville, GA, which had applied for a CON from the Georgia Department of Community Health.  The application was opposed by Floyd Medical Center, Wellstar Kennestone Hospital and Cartersville Medical Center, which is located across the street from the Georgia Advanced Surgery Center for Women.  The Georgia Department of Community Health denied the Georgia Advanced Surgery Center for Women’s CON request, stating that neither the surgery center nor other ambulatory surgery centers located in the area were operating at capacity and that allowing the expansion would cause an unnecessary duplication of services.

The surgery center challenged the CON law on constitutional grounds arguing that the CON process violated its constitutional rights to due process and violated the Georgia Constitution’s Anti-Competitive Contracts clause.  The Georgia Supreme Court rejected the surgery center’s challenge, ruling that the CON law serves a legitimate legislative purpose by promoting the availability of quality healthcare and that the CON law in no way authorizes monopolies or other anti-competitive contracts relating to providers of new health care services.

Brian T. Casey, Esq. - LOCKE LORD LLP, (404) 870-4638 , bcasey@lockelord.com
David M. Green, Esq. - LOCKE LORD LLP, (404) 870-4657 , david.green@lockelord.com

Category(s): Illinois - 11/20/2017

Illinois Healthcare Update

Earlier in 2017, the Illinois Department of Healthcare and Family Services (“DHFS”) issued an RFP for medicaid managed care. The goal was to have a more efficient system in place.  In August, DHFS awarded contracts to:

Statewide:  Blue Cross Blue Shield of Illinois, Harmony Health Plan, IlliniCare Health Plan, Meridian Health, and Molina Healthcare of IL

Cook County only- CountyCare Health Plan

For DCFS Youth- IlliniCare Health Plan

In September, DHFS awarded an additional contract to NextLevel Health for Cook County only.

Daniel A. Cotter, Esq. - LATIMER LEVAY FYOCK LLC, (312) 422-8000 , dcotter@llflegal.com

Category(s): Louisiana - 11/20/2017

Louisiana Update

As a follow up to Bulletin No. 2017-07 issued by the Louisiana Department of Insurance in September regarding water-damaged vehicles, Louisiana Commissioner of Insurance Jim Donelon has warned consumers in the market to purchase a user car that, because of the recent hurricanes and flooding events in Louisiana and nearby states, they should be wary.  In a press release, Commissioner Donelon reminded consumers that, under Louisiana state law, if a vehicle has been declared a total loss because it has flooded, it cannot be resold.  Further, any vehicle whose power train, computer or electrical system has been damaged by flooding is considered a total loss under Louisiana law.  Any vehicle that is declared a total loss as a result of flooding and is subject to an insurance settlement becomes the property of the insurance company.

Van R. Mayhall, III, Esq. - BREAZEALE, SACHSE & WILSON, L.L.P., (225) 381-3169 , van.mayhall.iii@bswllp.com
Van R. Mayhall, Jr., Esq. - BREAZEALE, SACHSE & WILSON, L.L.P., (225) 381-8009 , van.mayhall.jr@bswllp.com

Category(s): NAIC - 11/20/2017

NAIC Work on Auto Insurance

The head of the Division Regulation and Enforcement at the Wisconsin Office of the Commissioner of Insurance recently reported that the Auto Insurance Working Group was created to come up with a comprehensive data call related to the availability and affordability of auto insurance. She noted that the comprehensive nature of the data call would make it a “big lift” for insurers to respond, resulting in a standstill for several months.

Partial resolution may have been achieved at last summer’s NAIC meeting in Philadelphia, where statistical agents offered to assemble aggregate data that will be available to states by the end of the year. Once the information has been assembled, the Auto Insurance Working Group will determine whether additional data is needed, although it was conceded that additional information may be required because the aggregate data will not be broken down by insurer.

William J. Toman, Esq. - QUARLES & BRADY LLP, (608) 283-2434 , william.toman@quarles.com
John A. Bliming - QUARLES & BRADY LLP, (608) 283-2444 , john.blimling@quarles.com

Category(s): NAIC - 11/20/2017

NAIC Work on Big Data

The director of the market regulation bureau at the Wisconsin Office of the Commissioner of Insurance recently noted that one charge of the Big Data Working Group is to look at ways to help states review complex rate filings. For example, some rate filings may reach in excess of 2 million pages, with states having no way to review them effectively. Accordingly, the Big Data Working Group has been considering a proposal released last summer for the NAIC to create an actuarial working group that would be available to assist with states’ reviews of these complex filings.
The director noted that the Big Data Working Group had received numerous concerns in response to the proposal. Chief among these concerns were confidentiality issues, questions about putting the NAIC in the role of consultant, and the fact that the NAIC, although not a regulatory body, would be put in a position to make evaluations that could determine the outcomes of filings. The director conceded that these concerns are valid, but noted that there needs to be some sort of solution for states confronted with these complex rate filings.

William J. Toman, Esq. - QUARLES & BRADY LLP, (608) 283-2434 , william.toman@quarles.com
John A. Bliming - QUARLES & BRADY LLP, (608) 283-2444 , john.blimling@quarles.com

Category(s): NAIC - 11/20/2017

NAIC Work on Cybersecurity

A policy advisor at the Wisconsin Office of the Commissioner of Insurance recently reported that the NAIC Cybersecurity Task Force's fifth draft of an Insurance Data Security model law was proposed heading into the NAIC’s August meeting. Response to the fifth draft was significant, and due to the amount of negative feedback, a sixth draft was released at the August meeting. The features of the sixth draft discussed were:

•	In an effort to provide uniformity between states, the draft stated that compliance with New York State’s regulation would constitute compliance for purposes of the model law.
•	In an effort to make compliance less onerous to insurers, the requirement in previous drafts that insurers report their compliance annually was replaced with an annual certification of compliance.
•	The sixth draft still requires notice to the Commissioner within 72 hours of a cybersecurity incident, but this 72 hour report is not necessarily expected to be complete. In response to a question, it was noted that confidentiality of such initial reports would likely be subject to a balancing test.

It was also noted in response to questions that the model law may move to an accreditation model at some point in the future, but there are no such plans at present.  In response to another question, it was noted that the model law does take into account the size of an entity when determining requirements.

William J. Toman, Esq. - QUARLES & BRADY LLP, (608) 283-2434 , william.toman@quarles.com
John A. Bliming - QUARLES & BRADY LLP, (608) 283-2444 , john.blimling@quarles.com

Category(s): NAIC, Wisconsin - 11/20/2017

Governor’s Steering Committee on Autonomous and Connected Vehicle Testing and Deployment

A representative of the Wisconsin Department of Transportation recently reported on the work of this Committee, which had its first meeting in September and is charged with providing a report to the Governor by June 2018.  He noted that the Committee is currently examining different issues for consideration over the coming months, but one question might be how the insurance industry should handle drivers who have poor driving records but drive an autonomous or connected vehicle.  He also noted that Wisconsin is one of 15 or 16 states with a similar committee, and that the federal government has begun to address the topic through legislation such as the SELF DRIVE Act. This act establishes the National Highway Traffic and Safety Administration as the primary agency overseeing the deployment of autonomous and connected vehicles, and places the federal focus on the regulation of vehicles, leaving questions of regulating driving and insurance to the states.

William J. Toman, Esq. - QUARLES & BRADY LLP, (608) 283-2434 , william.toman@quarles.com
John A. Bliming - QUARLES & BRADY LLP, (608) 283-2444 , john.blimling@quarles.com

Recent Editions

Alerts for January 2017

Posted on 1/25/2017

Alerts for March 2017

Posted on 3/23/2017

Alerts for May 2017

Posted on 5/24/2017

Alerts for July 2017

Posted on 7/28/2017

Alerts for September 2017

Posted on 9/27/2017