Category(s): - 12/21/2016

On November 3, 2009, the Montana Supreme Court issued its decision in Satterlee v. Lumberman’s Mut. Cas. Co., 2009 MT 368, 353 Mont. 265, affirming the Workers’ Compensation Court’s holding that 39-71-710, MCA, which allows termination of PTD benefits when the injured worker becomes eligible for retirement benefits, does not violate the worker’s equal protection or substantive due process rights under the Montana constitution.  Ms. Satterlee incurred a compensable injury for which she received PTD benefits. When she became eligible for Social Security benefits, her PTD benefits were terminated under 39-71-710, MCA.  Satterlee and others challenged the constitutionality of 39-71-710, MCA.  Montana workers’ compensation employers and insurers expressed serious concern regarding the financial impact of a plaintiffs’ decision in the case, which was estimated to increase premiums by between 11-21 %.  The decision aligns Montana with the majority of other states holding such statutes to be constitutional.

Jacqueline T. Lenmark, Esq. - JACKSON MURDO & GRANT, P.C., (406) 513-1113 , jtlenmark@jmgattorneys.com

Category(s): Federal - 12/21/2016

On Christmas Eve, the Senate by a strictly party line vote of 60-39 passed H.R. 3590, the Patient Protection and Affordable Care Act, setting the stage for negotiations with the House over the elements of a final bill.  Democrats hope to get something to President Obama’s desk by the State of the Union Address at the end of January, but that is a tall order given the number of contentious issues that separate the House and Senate on this landmark legislative effort.  To view the 2074-page Senate bill, click here.  To view the 2016-page House version, click here.  House and Senate leaders are now working with the Administration to merge the two bills.

Charles T. Richardson, Esq. - FAEGRE BAKER DANIELS LLP, (202) 997-0681 , crichardson@faegrebd.com

Category(s): Florida - 12/21/2016

Florida Senator Mike Bennett and State Representative Bill Proctor have introduced identical bills (HB 447 and SB 876) for the 2010 Regular Legislative Session that would afford the opportunity for all licensed insurance companies to charge partially deregulated rates. The bill would accomplish this by removing the eligibility thresholds contained in a bill vetoed by Florida Governor Charlie Crist in 2009 that contained slightly different language regarding insurer eligibility for the deregulated rates. That bill initially was known as the "Consumer Choice" bill, but quickly became known as the "State Farm" bill, because of the specific deregulation eligibility thresholds.

Supporters of a partially deregulated rate environment anticipate that passage of HB 447 would revitalize Florida’s private insurance market by retaining carriers and attracting new capital into the State. This is expected to reduce the market burden on Citizens, which, in turn, would reduce the financial burden on Florida taxpayers. Transparency issues also have been addressed in HB 447.

In a media conference held on December 8, 2009 to announce the filing of HB 447, Senator Bennett and Representative Proctor stated that through the bill, they are trying to depopulate Citizens, or prevent policyholders from winding up there. To accomplish this, HB 447 requires Citizens policyholders to be advised of the insurer’s capacity to levy a surcharge in the event it does not have adequate claims-paying funds. Senator Bennett said that an extensive amount of work still needs to be done regarding the Citizens-related provisions in the bill. He indicated he will probably file a bill this year to sunset Citizens because of his sentiment that this is the proper course of action for the State to take.

Neither legislator felt that removing the OIR’s ability to prohibit rate increases, coupled with increasing the ability for insurers to drop policies would force even more policyholders into Citizens.

Governor Crist has not yet indicated his willingness to sign HB 447.

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

Category(s): Florida - 12/21/2016

To view complete information on the most recent Florida Office of Insurance Regulation final adopted Rules, many of which are effective as of January 4, 2010, click here.

The following insurance-related Rules were approved during the November 17, 2009 Florida Cabinet meeting:  

Final Adoption of Amendments to Proposed Rule 69O-156 Part 1 Medicare Supplement Insurance

On September 24, 2008, the National Association of Insurance Commissioners ("NAIC") adopted revisions to the NAIC Model Regulation to Implement the NAIC Medicare Supplement Insurance Minimum Standards Model Act.  The revisions included major changes to Medicare Supplement plans and benefits that initially had been approved by the NAIC in March 2007 and subsequently authorized by the Medicare Improvements for Patients and Providers Act of 2008.  In addition, the model revisions contain changes required by the Genetic Information Nondiscrimination Act of 2008.  States are required to adopt the NAIC model revisions in order to continue to regulate the Medigap market.  (Note:  Medicare supplement plans are commonly referred to as Medigap.) 

Final Adoption of Amendments to Proposed Rule 69O-137.001 Annual and Quarterly Reporting Requirements

Florida law requires every authorized insurer to file annual and quarterly statements of its financial condition with the OIR. To allow uniformity in filing, the Florida Legislature permitted the Financial Services Commission to adopt the NAIC-approved form for financial statements.  With the Cabinet's approval today, the existing Rule was amended to adopt the NAIC's 2009 annual and quarterly statement instructions.  The Rule also was amended to adopt the 2009 NAIC Accounting Practices and Procedures Manual.  The 2009 versions of these manuals are the most recent and will replace the current Rule that adopted the 2008 version.

Final Adoption of Amendments to Proposed Rule 69O-138.001: NAIC Financial Condition Examiners Handbook

Florida law requires the OIR to examine the affairs, transactions, accounts and records of authorized insurers.  It also allows the Financial Services Commission to adopt the NAIC Financial Condition Examiners Handbook in order to facilitate uniformity in examinations and reduce the frictional costs of doing business in Florida.  The existing Rule was amended to adopt the 2009 NAIC Financial Condition Examiners Handbook.  The now-previous Rule adopted the 2008 version.

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

Category(s): Florida - 12/21/2016

Technical changes requested by the Florida Division of Workers' Compensation ("Division") recently were approved for Rule 69L-26.004, Florida Administrative Code, that include a notice commonly known as the “Employee Notification Letter."  

Rule 69L-26.004 establishes that injured workers, or any other party to a dispute involving a workers' compensation issue, must contact and request assistance from the Division's Bureau of Employee Assistance and Ombudsman's Office ("EAO"), as well as make a good faith effort to participate in the informal dispute resolution proceedings of the EAO.A worker's request for assistance will be accepted by the EAO and constitute contact with the EAO only if it is submitted on a completed Request for Assistance form (EAO-1) and is otherwise in compliance with these Rules. 

In order to facilitate a Request for Assistance, employers or carriers must provide the "Employee Notification Letter" within three days as required by law. 

A new "Employee Notification Letter" is posted on the Division's website at the following address:   http://www.myfloridacfo.com/WC/publications.html.  Employers and carriers must begin using this letter on, or before April 1, 2010. 

The technical changes to Rule 69L-26.004, F.A.C. include corrections in statutory citations, updates to Division Web addresses and the addition of an e-mail address for contacting the EAO.

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

Category(s): Florida - 12/21/2016

The Florida Office of Insurance Regulation and State Farm Florida Insurance Company recently settled administrative litigation pertaining to the insurer's planned withdrawal from the Florida property market.  The insurer filed a withdrawal plan, arguing that it could not attain rate adequacy in Florida.  The OIR imposed stringent conditions on the company's withdrawal, and the insurer challenged those conditions.  The parties resolved this dispute with the OIR agreeing to allow State Farm Florida to nonrenew 125,000 policies and approving a rate increase of almost 15%, while State Farm Florida agreed to limit its nonrenewals to that number and to allow its agents to place the nonrenewed business with other insurers.

Travis L. Miller, Esq. - RADEY LAW FIRM, (850) 425-6654 , tmiller@radeylaw.com

Category(s): Georgia - 12/21/2016

The Georgia Court of Appeals recently fined an insurer and its outside counsel for filing what the panel of judges believed was a frivolous appeal used to delay payment of the trial court’s award.  The panel’s November 13, 2009 ruling affirmed the lower court’s decision that the insurer was liable to its policyholder, a contractor who was hired to do work on a dormitory which was significantly damaged when a subcontractor’s plumber’s torch ignited a wooden wall stud in the building.  Despite law to the contrary, the insurer argued that its comprehensive general liability insurance policy’s business-risk exclusion applied in this case.  The trial court determined that this was an invalid interpretation of the business-risk exclusion and that the insurer was liable for penalties and attorneys’ fees because of its bad faith failure to provide the insured contractor with a defense.  The Georgia Court of Appeals affirmed the trial court’s findings and ordered that additional fines be imposed by a jury for the insurer’s frivolous appeal.  Transportation Insurance Co. v. Piedmont Construction Group, LLC, A09A1200, A09A1201, A09A1202 (Nov. 13, 2009).

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

Category(s): Iowa - 12/21/2016

Earlier in the year,  after several public hearings on the subject of insurance based credit scoring , an academic study was commissioned by the Consumer Advocate in the Iowa Insurance Division  to be undertaken by St. Ambrose University in Davenport, Iowa. At a recent public hearing by the Advocate, the  conclusions of the study were unveiled by its authors. The participating faculty members reaffirmed that insurance based credit scoring does indeed predict risk and is therefore not unfair. Further the study could not  conclude there was an unfair impact on minorities from its use.

A survey of 1240 Iowans was conducted by the authors of the study. While a majority of respondents believed credit scoring is not an accurate predictor of risk, the authors, after studying the extensive literature on the subject, including studies in other states, concluded this was not the case and that credit scoring actually  was an accurate predictor. Likewise, regarding racial impact, it was concluded that the data was just too mixed to justify a finding there was in fact an adverse impact.

The study itself may be found at the Iowa Insurance Division's website, www.iid.state.ia.us.

Fred M Haskins, Esq. - PATTERSON LAW FIRM, (515) 283-2147 , fhaskins@pattersonfirm.com