Category(s): Florida - 05/25/2018

On, May 8th, 2018, in Bailey v. Rocky Mountain Holdings, LLC, the 11th Judicial Circuit of Florida upheld the dismissal of a putative class action that was filed against an air ambulance company after a dispute arose over a bill for emergency air ambulance services.  At issue was whether the Airline Deregulation Act (the “ADA”) preempted a cause of action against an air ambulance provider based on a provision of the Florida Motor Vehicle No-Fault Law which would limit the fees that are payable under a motor vehicle insurance policy to a schedule of fees. The 11th Circuit rejected the plaintiff’s argument that McCarran-Ferguson Act (“MFA”), which provides that federal laws cannot preempt “any law enacted by an State for the purpose of regulating the business of insurance,” precluded the ADA’s preemption of his action—an argument that was advanced by the air ambulance service provider.  The Court agreed with the District Court that the MFA “prevents only inadvertent intrusion from federal legislation, not express preemption such as that of the ADA,” and held that the ADA preempted the insurer’s action because it related to the prices of the air carrier, which was a federally regulated air carrier.  The Court’s holding is significant because it provides that the ADA preempts Florida insurance law, to the extent that an insurance law relates to the price of services charged by an air carrier.

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

Category(s): Florida - 05/25/2018

On April 6, 2018, Florida Governor Rich Scott approved HB 533, which was filed in the Florida House of Representatives by Representatives Bill Hager and Richard Stark.  The new law, which will take effect July 1, 2018, amends Section 626.9541, Florida Statutes, to allow admitted property and casualty insurers to refuse to insure or refuse to continue to insure applicants or insureds for failing to purchase noninsurance motor vehicle services from a membership organization, such as the American Automotive Association (“AAA”), that is affiliated with the insurer.  The new law amends the State’s Unfair Methods of Competition and Unfair or Deceptive Acts law, which previously prohibited insurers from refusing to insure or continuing to insure any individual or risk solely because of the insured’s or applicant’s failure to purchase noninsurance services or commodities, including automobile services as defined in Section 624.124, Florida Statutes.  A copy of the bill may be viewed by clicking this link.

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

Category(s): Florida - 05/25/2018

On May 1, 2018, the Florida Office of Insurance Regulation (“OIR”) advised that it has approved a rate decrease for workers’ compensation insurance in Florida.  Importantly, the 1.8% decrease was filed by the National Council on Compensation Insurance (“NCCI”) in a law-only filing resulting from the effects of the Act.  The 1.8% decrease is due to a change in the Profit and Contingency (“P&C”) Factor to 0.5 percent from 1.85 percent.  NCCI’s analysis to determine the revised P&C reflects provisions from the recently-passed Tac Cuts and Job Acts, including top corporate tax rate decreases, changes to reserve discount factors, and other factors.  This applies to both new and renewal workers’ compensation insurance policies effective in Florida as of June 1, 2018.

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

Category(s): Georgia - 05/25/2018

House Bill 878 – Cancellation of Insurance Policies by an Insured
House Bill 878 Amends O.C.G.A. §33-24-44.1 relating to the procedure for an insured’s cancellation [type(s)] of insurance by eliminating the previous requirement that an insured request cancellation of an existing policy in writing and adding new language providing that an insured may request cancellation of an insurance policy orally, electronically or in writing.  The amendment further provides that an insurer or its duly authorized agent may require that an insured provide written, electronic or other recorded verification of the request for cancellation and requires the insurer to document the request for cancellation in its policy file.

House Bill 878 was signed by the Georgia Governor on May 7, 2018 and takes effect on July 1, 2018.

Senate Bill 350- Notice of Information Practices
Senate Bill 350 amends O.C.G.A. § 33-39-5 relating to requirements for delivery of notice of information practices by amending the notice requirements in cases of insurance policy renewals.  O.C.G.A. § 33-39-5 previously required an insurance institution or agent to provide notice of its information practices to an insurance applicant or policyholder upon issuance of a new policy, at renewal, and during a policy reinstatement. Senate Bill 350 adds a revised O.C.G.A. §33-39-5 (a)(2)(A) and (B), which provides that in the case of a policy renewal, the insurer or agent does not have to provide notice of its information practices if (1) personal information is collected only from the policyholder or from public records or (2) notice has been given within the previous 24 months.  Specifically, no notice is required concurrently with a policy renewal if (1) non-public personal is provided to non-affiliated third parties only in accordance with Chapter 39 of Title 33 (the Georgia Insurance Code) or (2) the information sharing practices of the insurance institution or agent relating to nonpublic personal information have not changed since the last notice of such information practices was given to the policyholder in accordance with Chapter 39 of Title 33.

House Bill 350 conforms Georgia’s information practices statute to the  federal Fixing America’s Surface Transportation Act (“FAST”) which eliminated the Gramm Leach Bliley Act (“GLBA”) requirements for financial institutions to provide annual privacy notices under certain conditions.

Senate Bill 350 was signed by the Georgia Governor on May 3, 2018 and takes effect on July 1, 2018.

Georgia House Bill 760- Notice of Reduction of Coverage
House Bill 760 amends O.C.G.A. §§33-24-45 and 33-24-46 by adding provisions which require an insurer to provide a “Notice of Reduction in Coverage” to automobile and property insurance insureds.  A Notice of Reduction in coverage is defined as “as a change made by an insurer which results in a removal of coverage, diminution in in scope or less coverage, or the addition of an exclusion.”  “Reduction of Coverage” does not include any change, reduction, or elimination of coverage made by the insured.  “Reduction of Coverage” also does not include correction of scriveners errors or mandated legislative changes.

A “Notice of Reduction of Coverage” must be sent by an insurer no less than 30 days prior to the effective date of such reduction in coverage.  A “reduction in coverage” or the failure of the insured to pay premiums following “reduction in coverage” is not  a non-renewal of the policy.

House Bill 760 was signed by the Georgia Governor on May 3, 2018 and takes effect on July 1, 2018.

Senate Bill 381- Domestic Surplus Lines Insurers
Senate Bill 381 Amends O.C.G.A. §33-5-20.1 to create a definition of “domestic surplus lines insurer.”  A “domestic surplus lines insurer” means “a nonadmitted insurer that is domiciled in this state with which a surplus lines broker may place surplus lines insurance.”  The bill also creates a new section, O.C.G.A. §33-5-20.2 which provides for eligibility requirements for a domestic surplus lines insurer which are equivalent to those of a non-domestic surplus lines insurer and those of the federal Non-Admitted and Reinsurance Reform Act of 2010.  A domestic surplus lines insurer is authorized to write any kind of insurance that a nonadmitted insurer not domiciled in Georgia is eligible to write and domestic surplus lines insurers are subject to taxation and exempt from rate, rule and form filing requirements on the same basis as are nonadmitted insurers not domiciled in Georgia.

Senate Bill 381 was signed by the Georgia Governor on May 8, 2018 and takes effect on July 1, 2018.

House Bill 673- Georgia Hands Free Act
House Bill 673 creates The “Georgia Hands Free Act” amends O.C.G.A §40-5-57 by prohibiting a person operating a motor vehicle from physically holding or supporting a wireless communications device, or writing, sending any text based communication, including but not limited to a text message, instant message, email or internet data on a wireless telecommunication device.  The watching of any video or recording a video, other than the use of a vehicle’s navigation device is also prohibited, as is the use of more than one button to access a wireless communication and reaching for a wireless communication device, while operating a motor vehicle.  Penalties for violating these provisions include fines and points against the violator’s driver’s license.

House Bill 673 was signed by the Georgia Governor on May 3, 2018 and takes effect on July 1, 2018.

Georgia House Bill 64- Health Insurance Commissions
House Bill 64 creates a new code section, O.C.G.A. §33-24-59.23 known as the "Protection and Guarantee of Service for Health Insurance Consumers Act."  The new code section provides that any carrier that issues a health benefit plan in Georgia shall pay a commission to the agent consistent with the amount proposed in the rates filed with the Georgia Insurance Commissioner to compensate the agent for the first term and for each renewal term thereafter, so long as such agent reviews coverage and provides ongoing customer service for such plan; provided, however, that no such compensation is required for any individual health benefit plan sold during a special enrollment period.

House Bill 64 was signed by the Georgia Governor on May 8, 2018 and takes effect on July 1, 2018.

Georgia House Bill 754 Division of Insurers- Vetoed
House Bill 754 proposed to create new sections of the Georgia Insurance Code,  O.C.G.A. § 33-14-120 through 33-14-128 which would have provided that a Georgia domestic insurer may divide into two or more resulting insurers pursuant to a plan of division approved by the Georgia Insurance Commissioner, unless there were findings that (a) the interests of the policyholders would not be adequately protected or (b) the proposed division constituted a fraudulent transfer.  

House Bill 754 was vetoed by the Georgia Governor on May 8, 2018, stating that he did not believe there was a need for the division bill and was not convinced of the adequacy of the proposed policyholder safeguards in the bill.

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

Category(s): Illinois - 05/25/2018

Illinois has introduced legislation, supported by several P&C carriers in the state, that would have provided that a domestic stock company may divide into 2 or more resulting companies pursuant to a plan of division. After early momentum in the House, the bill appears to have been abandoned.

Daniel A. Cotter, Esq. - Dickinson Wright PLLC, (312) 423-8170 , DCotter@dickinson-wright.com

Category(s): Mississippi - 05/25/2018

Mississippi Attorney General Jim Hood recently filed six more civil actions against a number of insurers arising out of grants awarded by the Homeowners Assistance Program (HAP) in the aftermath of Hurricane Katrina.  The first of these complaints were filed in 2015.  This litigation alleges improper adjusting of claims, specifically the issue of damage caused by wind versus damage caused by water during Hurricane Katrina in 2005.  These cases are being handled by private attorneys under contingency fee contracts with General Hood.  In total, twelve cases have been filed.  Three cases have been settled with the aggregate amount of the settlements appearing to exceed approximately $8,500,000, two cases are before the Mississippi Supreme Court on interlocutory appeal of procedural issues, and one case remains before the Mississippi Supreme Court on petition for rehearing of denial of interlocutory appeal as to another procedural issue.  General Hood has indicated that more HAP cases are to be filed.

Robert B. House, Esq. - JONES WALKER LLP, (601) 949-4830 , rhouse@joneswalker.com

Category(s): NAIC, New York - 05/25/2018

A proposal to eliminate New York State’s anti-arson applications for commercial fire policies struggles towards a vote before the Legislature adjourns on June 20th.  An Assembly bill, A9797, would repeal New York Insurance Law § 3404 and “all rules and regulations” that implement it, including 11 NYCRR 64-4.2 (Regulation 96). 

Section 3404 and Regulation 96 derive from the NAIC’s Anti-Arson Application Model Law adopted in 1981.  NAIC ST -715-1 (Model Law).  At that time, many cities in the United States were experiencing a record number of arsons-for-hire.  New York adopted the Model Law in 1984.  

Over the years, Section 3403 and Regulation 96 have both been frequently amended and narrowed such that Section 3403 now only applies to commercial fire policies issued for property located in cities with a population of more than 1,000,000, as determined by the 1970 U.S. census, i.e., New York City.

Both the Professional Insurance Agents of New York (PIA) and the New York Insurance Association (NYIA) support the effort to eliminate the anti-arson application on the grounds that: (1) the epidemic of arson-for-hire has passed; (2) methods of investigating arson, including the use of internet searches, electronic databases, and other advanced arson-detection techniques have turned the anti-arson application into a buggy whip; and (3) the cost and time required to complete and collect the applications, burdens that fall on both producers and insurance consumers, no longer warrants the effort. 

The Assembly sponsor of the bill to repeal NYIL 3403 (and Regulation 96) continues to push for a vote before the Legislature disbands.

James Veach, Esq., (201) 927-0759

Category(s): Oklahoma - 05/25/2018

On May 7, 2018, Governor Mary Fallin signed into law a measure that will allow insurance business transfers (IBTs) under a structure that mimics Part VII of the UK Financial Services and Markets Act 2000.  The law does not provide for commutation of contracts.  According to the Department of Insurance, it has had a number of conversations with interested parties when the law goes into effect on November 1, 2018.

Daniel A. Cotter, Esq. - Dickinson Wright PLLC, (312) 423-8170 , DCotter@dickinson-wright.com

Category(s): Tennessee - 05/25/2018

On May 3, Governor Bill Haslam signed into law the legislative package proposed by the Tennessee Department of Commerce Insurance which includes the NAIC Model Corporate Governance Annual Disclosure Act.  In addition to the CGAD, which takes effect on January 1, 2019, the new law (Public Chapter 873) includes NAIC Model credit for reinsurance amendments, makes technical corrections to the Insurance Holding Company System Act, and deletes an obsolete statute with regard to reserves on participating policies (Tenn. Code Ann. Section 56-3-102) that dates back to the early 1900s.

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