Alert Edition January 2024

Welcome to the January 2024 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,
C. Ignacio Matos, Esq., FORC Alert Co-Editor
Ryan Smart, Esq., FORC Alert Co-Editor
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Category(s): National - 01/30/2024

Commissioner Lara Gives Progress Report on Sustainable Insurance Strategy at Assembly Hearing

On December 13, “Insurance Commissioner Ricardo Lara told California Assembly members at a legislative oversight hearing that ‘California is at an insurance crossroads and for many Californians this is an insurance emergency.’ He underscored the need for marketplace reforms, with the FAIR Plan reporting 20 percent growth of policies in 2023 and restrictions by major insurance companies pushing more consumers into California’s insurer of last resort.” Commissioner Lara gives progress report on Sustainable Insurance Strategy at Assembly hearing, CAL. DEP’T INS. (Dec. 13, 2023), click here  to read the full press release on the California Department of Insurance website.

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

Category(s): Florida - 01/30/2024

Department of Financial Services Package Bill Filed in the Florida House

On Thursday, December 21, Representative Chip LaMarca (R-Lighthouse Point) filed HB 989 relating to the Department of Financial Services. The bill addresses several provisions relating to issues under the purview of the Florida Department of Financial Services. The Senate companion has yet to be filed. H.B. 989, 91st Leg., 1st Reg. Sess. (Fla. 2024).

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

Category(s): Florida - 01/30/2024

FLOIR Approves a 15.1% Decrease in Workers' Compensation Insurance Rates for 2024

On November 13, “Florida Insurance Commissioner Michael Yaworsky issued a Final Order granting approval to the National Council on Compensation Insurance (NCCI) for a statewide overall workers’ compensation insurance rate decrease of 15.1 percent. The rate decrease applies to both new and renewal workers’ compensation insurance policies effective in Florida as of January 1, 2024.” OIR Approves an 15.1% Decrease in Workers’ Compensation Insurance Rates for 2024, FLA. OFF. INS. REGUL. (Nov. 13, 2023), click here  to read the full article on the Florida OIR website.

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

Category(s): Florida - 01/30/2024

Florida Court Rulings, Legislation Could Impact Insurers’ Claims Practices

“Recent Florida legislation that has limited plaintiffs’ attorney fees and has raised the bar for bringing bad-faith claims against insurers appears to have already had an impact on the level of claims litigation in the state. Policyholder lawyers note that it has become more difficult to invest the time to combat alleged stonewalling and delay tactics by insurance lawyers.” William Rabb, Florida Court Rulings, Legislation Could Impact Insurers’ Claims Practices, (Dec. 19, 2023), click here  to read the full article on the Insurance Journal website.

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

Category(s): Florida - 01/30/2024

Florida Court Sides with Homeowner in Key Insurance Dispute, Sets Stage for Supreme Court Showdown

“In an issue that might ultimately have to be sorted out by the Florida Supreme Court, an appeals court has sided with a Collier County homeowner in a dispute about a 2021 law that placed additional hurdles to filing lawsuits against property insurers. The ruling [in late November] by a panel of the 6th District Court of Appeal dealt with whether part of the law could apply to policies issued before the law took effect.” Jim Saunders, Florida court sides with homeowners in key insurance dispute, sets state for Supreme Court showdown, (Nov. 29, 2023), click here  to read the full article on The Capitolist.

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

Category(s): Florida - 01/30/2024

Governor Ron DeSantis Releases Proposed Budget for Fiscal Year 2024-2025

On December 5, Florida Governor Ron DeSantis released the proposed Focus on Florida's Future Budget which totals over $114 billion for Fiscal Year 2024-2025. The General Revenue portion of the budget totals $46 billion with total reserves at $16.3 billion which is more than 14 percent of the total budget for the fiscal year. Governor Ron DeSantis Announces the Focus on Florida’s Future Budget Recommendations for Fiscal year 2024-2025, (Dec. 5, 2023), click here  to read the full news release on the Florida Governors website. 
The proposed budget includes $409 million for a one-year exemption on taxes, fees, and assessments for residential property insurance policyholders, as well as $22 million for a permanent insurance premium tax exemption on flood insurance policies. Insurance Commissioner Michael Yaworsky Issues Statement of Support for Governor Ron DeSantis’ FY 2024-2025 Focus on Florida’s Future Budget, FLA. OFF. INS. REGUL. (Dec. 6, 2023), click here  to read the full article on the Florida Office of Insurance Regulation website.

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

Category(s): Florida - 01/30/2024

State Board of Administration to Issues Proposed Rule Regarding Insurer Reporting Requirements and Responsibilities

The State Board of Administration, Florida Hurricane Catastrophe Fund issued the following proposed rule in the December 20 Florida Administrative Register. The proposed rule addresses reporting and examination requirements, the adoption of the 2024-2025 Data Call for exposure reporting and forms for loss reporting, exposure examinations and claims examination. Insurer Reporting Requirements and Responsibilities, 49 Fla. Admin. Reg. 4685 (Dec. 20, 2023).

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

Category(s): Florida - 01/30/2024

U.S. Senate Budget Committee Calls for Information from Citizens Property Insurance Corporation

On Thursday, November 30, U.S. Senate Budget Committee Chairman Sheldon Whitehouse (D-RI), sent a letter to Florida Insurance Commissioner Michael Yaworsky and Citizens Property Insurance Corporation (Citizens) CEO Tim Cerio requesting information and documentation for “plans to address increased underwriting losses from climate-related extreme weather events and other disasters such as tropical cyclones, intense precipitation events, droughts, heatwaves, sea level rise, and wildfires.” Whitehouse Launches Investigation into Citizens Property Insurance Amid Questions About Company’s Long-Term Solvency, (Nov. 30, 2023), click here  to read the full article on the U.S. Senate Budget Committee website.

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

Category(s): Georgia - 01/30/2024

11th Circuit Addresses Reasonableness of Sale of Business Non-Compete

In Baldwin v. Express Oil Change (11th Circuit, December 2023), the Eleventh Circuit Court of Appeals upheld a Georgia federal district court’s modification of the non-compete territory but rejected its ruling that the time restriction should be based on the two-year presumptive safe-harbor period for a non-compete in the employment context. The district court found that the scope of the geographic restrictions - two states and the five-mile radius surrounding more than 1,100 franchised locations—was greater than necessary to protect the former employer’s interest in retaining its employees and customers given that the territory included areas in which the former employee did work. The appellate court held that the district court should have applied the five-year rebuttable presumption of reasonableness contained in OCGA §13-8-57(d) (sale of business context) and not the two-year presumption contained in Section 13-8-57(b) (employer-employee context) because the former employee received sales consideration for his phantom equity from the sale of his former employer. Baldwin v. Express Oil Change, LLC, 87 F. 4th 1292 (11th Cir. 2023).

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

Category(s): Georgia - 01/30/2024

Bulletin 24-EX-1: MPOHV Motor Vehicle Insurance Registration

On January 9, 2024, Commissioner John F. King issued Bulletin 24-EX-1 to remind all motor vehicle carriers and agents that auto insurance coverage on multipurpose off-highway vehicles (MPOHVs) registered for use on county roads must be reported to the Georgia Department of Revenue’s Georgia Electronic Insurance Compliance System (GEICS).
Insurers must electronically transmit coverage information of registered MPOHVs to GEICS within 30 days of the date coverage begins.

Tony Roehl, Esq. - BAKER HOSTETLER LLP, (404) 256-8419 , troehl@bakerlaw.com

Category(s): Georgia - 01/30/2024

District Court Finds Consumer’s Claims Under Georgia’s Fair Business Practices Act Relating to Sale and Finance of Automobile are Preempted

In Baughman v. Truist Bank, No. 123CV03199JPBJKL, 2023 WL 6940698 (N.D. Ga. Sept. 19, 2023), a Georgia federal district court held that a consumer auto purchaser’s claims brought under the Georgia Fair Business Practices Act failed as a matter of law because the auto finance transaction was heavily regulated by both federal and state law. The auto dealer that sold the vehicle had agreed to purchase a vehicle service contract for the consumer purchaser but failed to do so, and later, when the auto experienced transmission problems, the consumer made a claim against the vehicle service contract obligor (apparently identified in the auto purchase documentation) which was denied because the auto dealer had not purchased the vehicle service contract. The consumer then sued the bank that had purchased the vehicle’s retail installment contract. The court granted the bank’s motion to dismiss finding that the claim based on the Georgia Fair Business Practices Act failed because the transaction was regulated by Federal Trade Commission’s Holder Rule and the analog Georgia Holder Rule, which allow consumers who enter credit contracts to assert their claims and defenses against any subsequent holder of auto loans and credit sales contracts. While the case did not involve an insurance issue, it does support the position that a personal lines insurance customer cannot bring claims against an insurance company or producer based on the Georgia Fair Business Practices Act because of the regulated nature of the insurance transaction under the Georgia Insurance Code and Regulations. Baughman v. Truist Bank, No. 123CV03199JPBJKL, 2023 WL 6940698 (N.D. Ga. Sept. 19, 2023).

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

Category(s): Missouri - 01/30/2024

Missouri Department of Commerce and Insurance Announces Cameron Mutual Insurance Company Has Been Placed in Court-Supervised Liquidation

The Missouri Department of Commerce and Insurance (DCI) announced, “Cameron Mutual Insurance Company (“Cameron Mutual”) has been placed into court-supervised liquidation effective December 1, 2023. Chlora Lindley-Myers, Director of the Missouri Department of Commerce and Insurance (“DCI”) has been named liquidator of Cameron Mutual.” Cameron Mutual Insurance Company placed into liquidation, MO. DEP’T COM. & INS. (Nov. 16, 2023), click here  to read the full article on the Missouri Department of Insurance website. “Cameron Mutual provides property and casualty insurance, and its lines of business include personal (primarily homeowners and auto coverage), commercial, and farm. Cameron Mutual experienced significant losses during 2023 which caused a rapid reduction in Cameron Mutual’s policyholder surplus. Cameron Mutual’s surplus dropped from $16.4 million as of March 31, 2023, to $3.4 million as of June 30, 2023. The company announced earlier this year that it would wind down its insurance operations by non-renewing policies.” Id. “Cameron National is not part of the Liquidation Order and will remain in rehabilitation.” Id.

Mark G.R. Warren, Esq. - INGLISH & MONACO, P.C., (573) 634-2522 , mwarren@inglishmonaco.com
Ann Monaco Warren, Esq. - INGLISH & MONACO, P.C., (573) 634-2522 , awarren@inglishmonaco.com

Category(s): Missouri - 01/30/2024

The Missouri Department of Commerce and Insurance (DCI) Announces Employers Should see a Reduction in Workers’ Compensation Rates for the Third Year in a Row

The Missouri Department of Commerce and Insurance (DCI) announced, “employers should see a reduction in workers’ compensation rates for the third year in a row, according to preliminary figures collected by DCI from the National Council on Compensation Insurance (NCCI). The NCCI recently proposed an overall decrease of 7.5 percent for 2024 workers’ compensation loss costs. The 7.5 percent decrease in loss costs between Jan. 1, 2023 and Jan. 1, 2024 is driven by data collected on an annual basis showing a decline in average indemnity and medical costs per lost time claim.” Missouri Department of Commerce and Insurance announces reduction of workers’ compensation rates for employers in 2024, MO. DEP’T COM. & INS. (Nov. 29, 2023), click here  to read the full article on the Missouri Department of Commerce & Insurance website.  “Workers' compensation was mandated in Missouri by state law in 1925 and is a “no-fault” insurance system that pays benefits to workers injured on the job to cover medical care, part of lost wages and permanent disability. In return, employers receive immunity from civil lawsuits by employees over such workplace injuries.” Id.

Mark G.R. Warren, Esq. - INGLISH & MONACO, P.C., (573) 634-2522 , mwarren@inglishmonaco.com
Ann Monaco Warren, Esq. - INGLISH & MONACO, P.C., (573) 634-2522 , awarren@inglishmonaco.com

Category(s): Missouri - 01/30/2024

The Missouri Department of Commerce and Insurance (DCI) Announces the Release of Final Health Insurance Rates for Missouri’s 2024 Individual Market

The Missouri Department of Commerce and Insurance (DCI) announced, “the release of final health insurance rates for Missouri’s 2024 individual market . . . As in previous years, Missouri has at least one insurance company offering health plans in every county in the state. Two carriers will significantly increase their footprints in Missouri in 2024, with United Healthcare providing coverage in an additional 47 counties, and Aetna providing coverage in an additional 22 counties. Oscar is also increasing its footprint in the Kansas City area, adding coverage in an additional seven counties.” Missouri Department of Commerce and Insurance releases health insurance rates for 2024 with more choices for Missourians, MO. DEP’T COM. & INS. (Nov. 1, 2023), click here  to read the full article on the Missouri Department of Commerce & Insurance website.

Mark G.R. Warren, Esq. - INGLISH & MONACO, P.C., (573) 634-2522 , mwarren@inglishmonaco.com
Ann Monaco Warren, Esq. - INGLISH & MONACO, P.C., (573) 634-2522 , awarren@inglishmonaco.com

Category(s): NAIC - 01/30/2024

NAIC Approves Model Bulletin on Use of AI by Insurers

Members of the National Association of Insurance Commissioners (NAIC) voted to adopt the Model Bulletin on the Use of Algorithms, Predictive Models, and Artificial Intelligence (AI) Systems by Insurers during its 2023 Fall National Meeting. The bulletin addresses critical issues related to the usage of AI, such as potential inaccuracies, unfair biases leading to discrimination and data vulnerabilities. NAIC Members Approve Model Bulletin on Use of AI by Insurers, NAT’L ASS’N INS. COMM’RS (Dec. 4, 2023), click here  to read full news release on the NAIC website.

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

Category(s): NAIC - 01/30/2024

NAIC Life Insurance Committee Sets 2024 Regulatory Goals

“The Life Insurance and Annuities Committee approved its 2024 work charges Tuesday with no comment. Charges were also set for the Life Actuarial Task Force, which the committee oversees. Members come from the National Association of Insurance Commissioners, which debate and set insurance regulation across a variety of issues. As expected, neither the life and annuities committee or the task force plans to confront a full-scale rewrite of the life insurance illustrations model.” John Hilton, NAIC life insurance committee sets 2024 regulatory goals, (Nov. 27, 2023), click here  to read the full article on Insurance News Net.

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

Category(s): NAIC - 01/30/2024

NAIC President Elected for 2024

“Members of the National Association of Insurance Commissioners (NAIC) elected the 2024 officers at the conclusion of the NAIC Fall National Meeting in Orlando” on December 4. NAIC Officers Elected for 2024, NAT’L ASS’N INS. COMM’RS (Dec. 4, 2023), click here  to read the full article on the NAIC website. 
Connecticut Insurance Department (CID) commissioner Andrew Mais has been elected as president of the National Association of Insurance Commissioners (NAIC). Id. “In his new role, Mais will chair the NAIC’s government relations and leadership council and the executive committee among others.” Frances Jones, CID commissioner Mais elected as president of the NAIC, (Dec. 8, 2023), click here  to read the full article on the Captive Insurance Times website.

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

Category(s): NAIC - 01/30/2024

Property Insurers to Provide Data to State Insurance Regulators to Better Understand Rates

A nationwide data call for property insurers to assist state insurance regulators in better understanding property markets, coverages and protection gaps was recently announced, according to the National Association of Insurance Commissioners (NAIC). NAIC Data Call to Provide Robust Look at Property Insurance Availability, Affordability, NAT’L ASS’N INS. COMM’RS (Nov. 2, 2023), click here  to read full news release on the NAIC website.

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

Category(s): New York - 01/31/2024

IAIG Group-Wide Supervision by DFS

As insurance companies have expanded their global presence, it has become necessary for states to have an enhanced and consistent framework for the supervision of Insurance Law Article 15 holding company systems, Insurance Law Article 16 systems, and Insurance Law Article 17 systems (collectively, "insurance groups") that are active internationally to ensure appropriate enterprise risk management and the solvency of the authorized insurance companies in the insurance group.
ComFrame (the NAIC’s Common Framework for the Supervision of Internationally Active Insurance Groups) is a set of international standards focusing on the effective group-wide supervision of IAIGs. 
Pursuant to § 82.1(i) of 11 NYCRR 82 (Insurance Regulation 203), an internationally active insurance group (IAIG) is an insurance group that includes an insurer registered under New York Insurance Law section 1503,1604, or 1717 and meets the following criteria:
• has premiums written in at least three countries;
• the percentage of gross premiums written outside the United States is at least 10% of the insurance group’s total gross written premiums; and
• based on a three-year rolling average, the total assets of the insurance group are at least $50 billion or the total gross written premiums of the insurance group are at least $10 billion.
11 NYCRR § 82.4(d) requires the Superintendent to publish on the website of the Department of Financial Services the identity of any IAIG that the Superintendent has determined is subject to group-wide supervision by the Superintendent. The Superintendent has determined that she is the group-wide supervisor for:
• American International Group (AIG)
• MetLife, Inc.
Additionally, the Superintendent of Financial Services may determine at any time that the Superintendent is the appropriate group-wide supervisor for an IAIG that conducts “substantial insurance operations” in New York by considering criteria provided in 11 NYCRR § 82.4(b).
The Superintendent has determined that she is the group-wide supervisor for American International Group (AIG) and Met Life, Inc. At present, there are no alien insurers doing business in the United States that are viewed as IAIGs for which the Superintendent is the group-wide supervisor.
As of 15 December 2023, 56 IAIGs have been identified by relevant Group-wide Supervisors from 19 jurisdictions. All 56 IAIGs have been publicly disclosed. At a minimum, the public register will be updated annually. However, ad-hoc updates may be made more frequently based on disclosures by GWSs that may occur during the year.
Click here  to view the most current register of IAIGs.

Frederick J. Pomerantz, Esq. - INSURANCE LEGAL & REGULATORY CONSULTING, PLLC, (516) 297-3101 , PomerantzF35@gmail.com

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