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Greetings, Welcome to the September 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 Sign up to receive FORC Alerts (and Journals) via email.
Mitigation Discounts Under Review - By statute and administrative rule, residential property insurers in Florida are required to offer substantial discounts to policyholders whose homes have certain windstorm loss mitigation fixtures or construction techniques. Concerns over the discount program prompted the 2009 legislature to ask a state commission to review Florida's implementation of the discounts. The commission held its first hearing in mid-August and will meet again in September. Potential problems identified at the initial meeting ranged from the actuarial soundness of the implementation of the discount table to unintentional errors and even fraud in the process for verifying mitigation fixtures and construction techniques. Travis L. Miller, Esq. - RADEY THOMAS YON & CLARK, P.A., (850) 425-6654, travis@radeylaw.comConsumer Advocate Proposes Report Card Rule - Florida's insurance consumer advocate recently held a workshop to discuss a draft rule that would assign letter grades to personal residential property insurers based on their relative shares of consumers complaints and the timeliness of their claims payments. Insurers have raised a number of public policy concerns with the rule, such as whether the rule will work to the disadvantage of companies actually writing new business in the state. In addition, insurers have raised questions about some of the details behind the scoring method, including a grading curve that will result in about 2/3 of the market receiving grades of "C" or lower. Travis L. Miller, Esq. - RADEY THOMAS YON & CLARK, P.A., (850) 425-6654, travis@radeylaw.comMedical Malpractice: Patients' Right to Know Trumps Fact Work Product - An amendment to the Florida Constitution passed in 2004 gives patients access to records made or received in the course of business by a health care facility or provider relating to any adverse medical incident. Florida courts have held this right trumps application of the "fact" work product doctrine to records of a facility or provider. "Fact" work product includes factual information gathered or prepared in connection with a case, as opposed to "opinion" work product reflecting counsel's mental impressions, conclusions, opinions or theories. The courts in Florida Eye Clinic v. Gmach and Lakeland Regional Medical Center v. Neely held that the constitutional amendment abrogated the common law work product doctrine as it relates to factual information, meaning that factual information gathered in connection with a case is subject to discovery even if that information would have been protected prior to the state's adoption of the amendment. Travis L. Miller, Esq. - RADEY THOMAS YON & CLARK, P.A., (850) 425-6654, travis@radeylaw.comGovernor Signs Bill Extending FHCF Reimbursement Coverage - Florida Governor Charlie Crist signed House Bill 569 into law on June 10, 2009, which will serve to extend the availability of an additional amount of Florida Hurricane Catastrophe Fund ("FHCF") reimbursement coverage up to $10 million until December 31, 2011 for limited apportionment companies, insurers that purchased such coverage in 2008, and for insurers that qualified for Florida's Insurance Capital Build-Up Incentive Program. Without this extension, the availability of this coverage would have otherwise ceased on May 31, 2009. Effective July 1, 2009, the insurance portion of HB 569 also specifies that the optional coverage retention as provided for limited apportionment insurers and others will be triggered prior to the mandatory coverage under the FHCF reimbursement contract; however, once the limit of the optional coverage is exhausted, the insurer's retention under the mandatory coverage will apply. Of note: Similar coverage was offered in 2006, 2007, and 2008 that reimburses an insurer for up to $10 million in losses for each of two hurricanes during those years. As it has been in past years, under HB 569 this coverage will be priced at a 50 percent rate on line (e.g., $5 million premium for $10 million in coverage) with a free reinstatement for a second event. An insurer's retention for such coverage remains at 30 percent of its surplus. To view complete bill information on HB 569, click here. Fred E. Karlinsky, Esq. - COLODNY, FASS, TALENFELD, KARLINSKY & ABATE, P.A., (954) 492-4010/(954) 332-1749, fkarlinsky@cftlaw.comMediation of Commercial Property Insurance Claims Rule To Take Effect August 30, 2009 - A Florida Office of Insurance Regulation ("OIR") Rule that implements a portion of Florida law mandating the creation of a property insurance claim resolution procedure as an alternate to "a potentially expensive and time-consuming adversarial appraisal process prior to litigation" will take effect on August 30, 2009. Rule 69J-166.002 relating to Mediation of Commercial Residential Property Insurance Claims is intended to create an "informal, nonthreatening forum for helping parties who elect this procedure to resolve their claims disputes." The statute and ensuing regulation were prompted by the "critical need for effective, fair, and timely handling of commercial residential property claims." The program is available to all first-party claimants and their insurers prior to commencing the appraisal process or litigation. It is also available to litigants referred to the OIR from Circuit or County court. For claims that have not previously been mediated under any OIR mediation program, the mediation procedures described in this Rule are available for all Florida commercial residential property claims. The Rule does not apply to commercial insurance, private passenger motor vehicle insurance, or to liability coverage contained in property insurance policies. It also does not apply to policies issued under the National Flood Insurance Program established pursuant to the National Flood Insurance Act of 1968. Personal lines residential insurance claims can be mediated pursuant to Rule 69J-166.031, F.A.C. , which is still in development. To view the complete information on Rule 69J-166.002, click here. Fred E. Karlinsky, Esq. - COLODNY, FASS, TALENFELD, KARLINSKY & ABATE, P.A., (954) 492-4010/(954) 332-1749, fkarlinsky@cftlaw.comFlorida Office of Insurance Regulation Signs Information-Sharing Agreements with U.K. and German Counterparts - The Florida Office of Insurance Regulation ("OIR") announced on July 21 that it has signed an information-sharing agreement with its United Kingdom counterpart to coordinate insurance regulatory oversight issues affecting both countries, as well as those relative to Florida. To view a copy of the Memorandum of Understanding between the two agencies, click here. To view a similar agreement between the OIR and German regulators, click here. Fred E. Karlinsky, Esq. - COLODNY, FASS, TALENFELD, KARLINSKY & ABATE, P.A., (954) 492-4010/(954) 332-1749, fkarlinsky@cftlaw.comNational Council on Compensation Insurance Files Florida Rate Decrease - Florida Insurance Commissioner Kevin McCarty announced on August 21, 2009 that the latest rate filing from the National Council on Compensation Insurance ("NCCI") for workers' compensation insurance rates includes an overall average rate decrease of 6.8 percent statewide, which would be expected to result in savings of more than $166 million for Florida employers. The new rates would go into effect for new and renewal business on January 1, 2010 if approved after a planned October 2009 rate hearing by the Florida Office of Insurance Regulation. To view the complete OIR news release regarding the NCCI rate filing, click here. Fred E. Karlinsky, Esq. - COLODNY, FASS, TALENFELD, KARLINSKY & ABATE, P.A., (954) 492-4010/(954) 332-1749, fkarlinsky@cftlaw.comBuilders, Adjusters and Insurers Join Florida Insurance Consumer Advocate For Roundtable Forum on Claims Estimating - Florida Insurance Consumer Advocate Sean Shaw presided over a roundtable meeting on July 23, 2009 that was prompted by numerous complaints from Floridians about insurance-related mediation, appraisal and litigation related to damages that occurred during the 2004/2005 hurricane seasons. Several recommendations resulted from the meeting, which is the first of several that have been planned to provide resolution to the issue of divergence in claims assessments between the insurance and building industries. To read the complete report, click here. Richard J. Fidei, Esq. - COLODNY, FASS, TALENFELD, KARLINSKY & ABATE, P.A., (954) 492-4010, rfidei@cftlaw.comFlorida Commission on Hurricane Loss Projection Methodology Reviews State's Statutory Windstorm Mitigation Credit System - As result of House Bill 1495 becoming law on June 1, 2009, the Florida Commission on Hurricane Loss Projection Methodology ("Commission") is required to review discounts, credits, other rate differentials and reductions in deductibles relating to windstorm mitigation. These findings must then be presented in a report to Florida's Executive and Legislative leadership by February 1, 2010. To generate this report, the Commission's Windstorm Mitigation Committee planned a series of public hearings to gain a better understanding of the current process for granting wind mitigation credits, the first of which was held on August 12, 2009 as part of a three-day meeting that began the prior day. To view the meeting report, click here. To view a list of materials and presentations given at the meeting, click here. Richard J. Fidei, Esq. - COLODNY, FASS, TALENFELD, KARLINSKY & ABATE, P.A., (954) 492-4010, rfidei@cftlaw.comFlorida Government Accountability Office Seeks Citizens Property Insurance-Related Public Adjuster, Claims Info for Mandated State Study due February 1, 2010 - Under the provisions of HB 1495, the Florida property insurance package that was signed into law on May 27 2009, the Florida Office of Program Policy Analysis and Government Accountability ("OPPAGA") must submit a report regarding public adjusters to state executive and legislative leadership by February 1, 2010. The report must include a review of relevant Citizens Property Insurance Corporation claims and statistics involving public adjusters, public adjuster claims submission practices, and a review of applicable Florida laws and rules. To view a list of specific information sought by OPPAGA, click here. Richard J. Fidei, Esq. - COLODNY, FASS, TALENFELD, KARLINSKY & ABATE, P.A., (954) 492-4010, rfidei@cftlaw.com
Georgia Insurance Department Considers More Stringent Regulation of Medicare Supplement Insurance Policies - The Georgia Insurance Department is considering a proposed regulation aimed at facilitating the public’s ability to compare and understand coverage available under Medicare supplement insurance policies. The proposed regulation mandates the terms and definitions used in the policies advertised or sold as Medicare supplement insurance policies, as well as the benefits that may be provided under the policies. For instance, Medicare supplement insurance policies must meet minimum benefit standards and cannot duplicate benefits provided by Medicare. The proposed regulation also includes requirements related to an applicant’s eligibility for a Medicare supplement insurance policy. Proposed Rule Chapter 120-2-8. Brian T. Casey, Esq. - LOCKE LORD BISSELL & LIDDELL LLP, (404) 870-4638, bcasey@lockelord.com and Alexis W. Summers - LOCKE LORD BISSELL & LIDDELL LLP, (404) 870-4649, asummers@lockelord.comGeorgia Supreme Court Concludes that Insured Cannot Succeed on Claim of Insurer’s Bad Faith Failure to Settle without a Jury Verdict in Excess of Policy Limits - The Supreme Court of Georgia recently considered whether a judgment in excess of a general liability insurance policy’s limits must be entered before an insured may maintain an action against its insurer for bad faith failure to settle. The insured in this case agreed to pay a portion of a settlement without obtaining its insurer’s consent. Under the terms of the insurance policy, the insurer was not obligated to pay any sums that the insured was not legally obligated to pay, and the insured could sue the insurer only based upon an agreed settlement or a final judgment entered against the insured at the conclusion of a full trial. The court held that these policy provisions were not illegal and did not violate public policy; therefore, the insured could not maintain its claim against the insurer for reimbursement based on a bad faith failure to settle. Trinity Outdoor LLC v. Central Mut. Ins. Co., S09Q0605 (June 1, 2009). Brian T. Casey, Esq. - LOCKE LORD BISSELL & LIDDELL LLP, (404) 870-4638, bcasey@lockelord.com and Alexis W. Summers - LOCKE LORD BISSELL & LIDDELL LLP, (404) 870-4649, asummers@lockelord.comGeorgia Supreme Court Upholds Plaintiff’s Claim against Uninsured Motorist Carrier - The Georgia Supreme Court granted a petition for a writ of certiorari to provide clarification related to the 1998 amendment to a Georgia statute that requires a plaintiff to serve process upon an uninsured motorist carrier if at the time the plaintiff files suit against the owner or operator of the vehicle that caused the injury, the plaintiff reasonably believes that the vehicle is uninsured. In the case at bar, the plaintiff served process upon the uninsured motorist carrier in a renewal action initiated upon her voluntary dismissal of her action against the owner and operator of the vehicle. The insurer argued that the plaintiff’s service was not timely because it was not provided within 90 days of her discovery that the vehicle was uninsured. Affirming the decision of the Georgia Court of Appeals, the Supreme Court held that the plaintiff’s service was timely because the insurer was served in the renewal action at the same point in time in which a defendant in a tort action could be served, which satisfied the statutory requirement that the uninsured motorist carrier be served as if it were being named as a party defendant. Retention Alternatives Ltd. v. Hayward, S08G1451 (June 1, 2009). Brian T. Casey, Esq. - LOCKE LORD BISSELL & LIDDELL LLP, (404) 870-4638, bcasey@lockelord.com and Alexis W. Summers - LOCKE LORD BISSELL & LIDDELL LLP, (404) 870-4649, asummers@lockelord.com
New Faces Leading the New Jersey Insurance Department - On July 17, 2009, Neil N. Jasey was named Commissioner of the New Jersey Department of Banking and Insurance, succeeding Steven M. Goldman, who returned to the private practice of law in New York. Commissioner Jasey, appointed by Governor Jon Corzine (who is running for re-election this fall), was employed by Prudential Insurance Company of America for approximately 30 years, most recently as Vice President and Deputy General Counsel. Also recently confirmed by the New Jersey Senate as Director of the New Jersey Division of Insurance is Douglas A. Wheeler, replacing long-time Director Donald Bryan. Director Wheeler previously served as an Assistant Commissioner with the Department and then as Vice President and General Counsel for Proformance Insurance Company. Susan Stryker, Esq. - CLYDE & CO US LLP, (212) 710-3970, Susan.Stryker@clydeco.usProposed New Rules Regarding Producer Disclosure of Compensation for Health Benefit Plans - The New Jersey Department of Banking and Insurance has proposed new rules, N.J.A.C. 11:17B-4 (PRN 2009-242), implementing a 2008 amendment to New Jersey's Producer Licensing Act of 2001, which requires insurance producers selling, soliciting or negotiating health insurance policies to notify the purchaser in writing of the consideration received. While the statute applies to health insurance policies, the proposed regulation applies only to health benefit plans. Because of the complex issues raised with regard to the various consideration which may be paid with respect to other health insurance policies, e.g., disability, long-term care and accident only, the Department also has issued a pre-proposal (PPR 2009-1) as to these policies, soliciting input from interested parties. Comments and input may be submitted to the Department on or before October 16, 2009, to legsregs@dobi.state.nj.us. Susan Stryker, Esq. - CLYDE & CO US LLP, (212) 710-3970, Susan.Stryker@clydeco.usNew Jersey Appellate Court Upholds Physicians' Fee Schedule - On August 10, 2009, the New Jersey Appellate Division, in In re Adoption of N.J.A.C. 11:3-20 by the State of New Jersey, Department of Banking and Insurance, rejected the challenge filed by various medical groups and upheld the regulations promulgated by the New Jersey Department of Banking and Insurance establishing a physicians' fee schedule, which sets the fees to be paid to providers of medical care to accident victims. The court held the regulations and the fee schedule valid; however, it enjoined the use of specific Ingenix data to establish usual, customary and reasonable fees, pending further action by the Department. The Department has instructed providers and insurers to use the fee schedule as affirmed by the court. The appellants in the case have sought discretionary review of the decision from New Jersey's highest court. Susan Stryker, Esq. - CLYDE & CO US LLP, (212) 710-3970, Susan.Stryker@clydeco.us
Superintendent increases surcharges to New Mexico Patients Compensation Fund - Effective October 1, 2009 base surcharges to the New Mexico Patents Compensation Funder under the state Medical Malpractice Act will be increased a uniform 9.5% over the current base surcharges to assure that the fund remains actuarily sound. The Superintendent of Insurance announce these increases at the Courts, Corrections and Justice interim legislative interim committee held on July 16th in Santa Fe. At that hearing the Superintendent testified that he was comfortable with the legislature raising the liability cap from $600,000 to one million dollars, which his actuarial staff would result in an overall premium increase of 3%. The state medical society and the largest medical malpractice provider qualified to access the patients compensation fund calculate that the necessary premium increase would be much larger. Gary Kilpatric, Esq. - MONTGOMERY & ANDREWS, P.A., (505) 982-3873, gkilpatric@montand.com
New York Reduces Insurer Director Requirements - Chapter 293 of the Laws of 2009, which became August 12, 2009, reduced the minimum required number of directors for a domestic insurer to seven and the minimum resident director requirement from two to one. In addition, the residence addresses of incorporators of domestic insurers will not have to be included in the insurer's charter or in the notice to be published in connection with the proposed incorporation. Jeremiah P. Sheehan, Esq. - MANATT, PHELPS & PHILLIPS LLP, (212) 830-7205, JSheehan@manatt.comNew York Extends Health Insurance to Children Through Age 29 - New York has enacted the "Age 29" law, effective September 1, 2009, expanding group health insurance coverage to adult children through age 29 under group health insurance policies issued for delivery in New York. To be eligible, the young adult must a) be unmarried, b) be 29 years of age or under, c) not be insured by or be eligible for health insurance through his or her own employer, d) live, work or reside in New York State or the health insurance company's service area and e) not be covered under Medicare. To qualify, the young adult does not have to live with a parent, be financially dependent on a parent or be a student. Francine L. Semaya, Esq. - NELSON LEVINE de LUCA & HORST, LLC, (212) 233-0130, fsemaya@nldhlaw.com and William K. Broudy, Esq. - NELSON LEVINE de LUCA & HORST, LLC, (212) 233-3254, wbroudy@nldh.com |
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