Category(s): Florida - 10/01/2012

The Florida Office of Insurance Regulation ("OIR") issued an October 2, 2012 Order establishing homeowners' and dwelling fire rate increases for Citizens Property Insurance Corporation ("Citizens"). These rates will be effective January 1, 2013 for new and renewal multi-peril business, and February 1, 2013 for new and renewal wind-only business. To view the OIR news release detailing the rates, click here.

Richard J. Fidei, Esq. - GREENBERG TRAURIG LLP, (954) 592-5530

Category(s): Florida - 10/01/2012

Following a 45-day deliberative review process that included a September 20, 2012 public hearing, the Florida Office of Insurance Regulation ("OIR") issued an October 8, 2012 Order establishing mobile home rates for Citizens Property Insurance Corporation ("Citizens").   In the Order, the OIR requires Citizens to conduct a study of its mobile home business, including the following factors: age of home, actual cash value of home, estimated replacement cost of home, policy value and the amount of premium paid for these policies. A review of these factors must be completed prior to a subsequent rate filing. To view the Order, click here.

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

Category(s): Florida - 10/01/2012

Before an insured may bring an action against an insurer for bad faith in Florida, the insured must obtain a favorable resolution of the underlying breach of contract claim. Historically, this meant that the insured needed to obtain a judgment or decree holding the insurer liable for breach of the insurance contact. Under the "confession of judgment" doctrine, courts have held that a bad faith action may proceed when an insurer pays a disputed claim after an action for breach of contract is filed, even when no judgment or decree has been entered. However, in Trafalgar at Greenacres, Ltd. v. Zurich American Ins Co, the Fourth DCA held that an appraisal award may constitute a "favorable resolution," allowing the insured to file a claim for bad faith. Until this decision, Florida courts had not extended the confession of judgment doctrine to situations where an insurer invokes the appraisal clause of its policy, and pays for a loss according to the appraisal award.

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

Category(s): Louisiana - 10/01/2012

In response to Hurricane Isaac, Commissioner Donelon issued Emergency Rule 26 which suspended until 12:01 a.m. on September 25, 2012 any statutory or regulatory provision, or any policy provision that imposed upon the insured a time limit to perform any act or transmit any information or funds when such act was to have been performed on or after 12:01 a.m. on August 26, 2012.  Effective 12:01 a.m. on September 8, 2012 the Emergency Rule was amended to limit its application to insureds who resided in certain enumerated parishes and who provided written notice to their insurer that they were impacted by Hurricane Isaac in a manner including, but not limited to, evacuation, displacement, temporary relocation, or loss of power.

Ronnie L. Johnson, Esq. - McGLINCHEY STAFFORD, PLLC, (225) 382-3620 , rjohnson@mcglinchey.com

Category(s): Pennsylvania - 10/01/2012

On September 1, 2012, the Pennsylvania Insurance Department published proposed amendments to the regulations applicable to reinsurers.  These amendments seek to modernize Pennsylvania’s regulations regarding collateral for foreign reinsurers necessary for statutory credit and bring the state’s regulatory regime into compliance with NAIC white paper proposals and accreditation requirements.  The proposed regulations also bring Pennsylvania current with the regulations of states such as Florida and New York.  The amendments allow reinsurers to become “certified” by the Commissioner and change the regulatory focus from traditional collateral requirements to the financial stability of the reinsurer as measured by available surplus and credit rating.  The new regulations also require that the jurisdiction supervising the foreign reinsurer meet certain requirements regarding financial reporting and prompt enforcement of United States judgments.  The proposed regulations require that a reinsurer maintain a minimum surplus of $250 million, that the jurisdiction from which it is domiciled is a “qualified jurisdiction” (which requires at a minimum that the jurisdiction “promptly” enforces judgments from the United States), and that the need for collateral will be determined by the financial ratings of the foreign reinsurer.  Foreign reinsurers meeting the other requirements of the new regulations with credit ratings of better than AA+ (S&P) or Aa1 (Moody’s) will not be required to post collateral.  As the credit ratings deteriorate, the collateral requirements increase on a sliding scale from 10% to 100%.  The new regulations will become final after thirty days from the final form publication in the Pennsylvania Bulletin.  For any further questions regarding the new proposed regulations, please contact the undersigned.

James S. Gkonos, Esq. - SAUL EWING LLP, (215) 972-8667 , jgkonos@saul.com

Category(s): Tennessee - 10/01/2012

The Department of Commerce and Insurance held a rulemaking hearing on October 4 to consider new Rule 41 (Chapter 0780-01-41) that implements provisions of the Revised Tennessee Captive Insurance Act (Tenn. Code Ann. § 56-13-101 et seq.) adopted by the Tennessee General Assembly in 2011.  Rule 41, which sets forth annual reporting requirements and audit requirements for captives domiciled in the state, will become effective during the first quarter of 2013.

T. Stephen C. Taylor, Esq. - BASS, BERRY & SIMS, PLC, (615) 742-7758 , staylor@bassberry.com
Robins H. Ledyard, Esq. - BASS, BERRY & SIMS, PLC, (615) 742-6259