Category(s): Arizona - 06/01/2012

After nearly nine years in office, and having served under two Governors, Christina Urias has announced that she intends to leave office effective May 29, 2012.  As most of you know, Director Urias was among the ranks of senior regulators at the NAIC, serving in several leadership positions during her lengthy tenure.  As of this writing a replacement for Director Urias has not been announced by Governor Brewer.

S. David Childers, Esq.

Category(s): Florida - 06/01/2012

The Florida Senate passed an amended PIP reform bill (HB 119) on a narrow 22-17 vote.  With the vote, Governor Scott accomplished a top legislative priority, to reform Florida’s mandatory motor vehicle no-fault law and crack down on the fraud abuses in PIP cases that have led to skyrocketing costs for coverage.  According to the Governor’s office and industry experts, PIP costs have risen by $1.4 billion since 2008, largely because of fraud imbedded in the system.

The new legislation requires the reimbursement of medical benefits if the insured obtains initial services and care within 14 days after a motor vehicle accident from a limited list of providers.  The full $10,000 PIP medical benefit is available only if a physician, osteopathic physician, dentist, or a supervised physician’s assistant or advanced registered nurse practitioner determines that the insured has an “emergency medical condition.” Otherwise, the PIP medical benefit is limited to $2,500.  Further, the bill clarified that death benefits are limited to $5,000, not $10,000, but may supplement medical and disability benefits.  Follow-up services require a referral from a physician, osteopath, chiropractor or dentist.  Massage therapy and acupuncture are no longer considered a reimbursable benefit under PIP.  PIP insurers must also maintain a log of benefits paid under PIP on behalf of the insured, to be provided to the insured if litigation is commenced. The bill also did away with contingency fee multipliers for a claimant’s attorneys fees but did not place caps on attorneys fees.

The final bill was a combination of the initial preferred House and Senate versions.  The Senate wanted a guaranteed 25 percent rate reduction on PIP, but settled for a 10 percent reduction.  If PIP insurers do not provide their policyholders a minimum 10 percent base rate reduction, they must explain in detail why they have not. A PIP insurer must make a second rate filing by January 1, 2014, to achieve a cumulative 25 percent base rate reduction for policyholders unless the insurer shows why it is unable to provide the cut.  The bill suspends an insurer’s ability write new PIP coverage in Florida if the insurer fails to make either required filing or showing.  The newly enacted reforms are effective July 1, 2012.  The Office of Insurance Regulation must publish the results of a comprehensive PIP data call by January 1, 2015.  To see a summary of the Amended HB 119 click here.

A. Kenneth Levine, Esq. - COZEN O'CONNOR, (561) 515-5256 , klevine@cozen.com

Category(s): Florida - 06/01/2012

The Florida Office of Insurance Regulation is seeking to amend Rule 69O-144.007, F.A.C, entitled "Credit for Reinsurance From Eligible Reinsurers" to apply to life insurance and not just property and casualty insurance.  The Rule was initially adopted to implement provisions of Section 624.610(3)(e), F.S., which give the Florida Insurance Commissioner authority to allow credit for reinsurance that does not meet criteria established in Sections 624.610(3)(a)-(d), if the assuming insurer holds surplus in excess of $250 million and has a secure financial strength rating from at least two nationally recognized statistical rating organizations deemed acceptable by the Commissioner.

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

Category(s): Florida - 06/01/2012

Senator Garrett Richter and Representative Bryan Nelson have released a white paper discussing Florida's residential property insurance market.  The legislators have been key figures in efforts to reduce the state's involvement in the insurance business.  Their latest effort, set forth in the white paper, highlights the assessment burden on Floridians that would arise from simultaneous assessments from Citizens Property Insurance Corporation, the Florida Hurricane Catastrophe Fund, and the Florida Insurance Guaranty Association.

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

Category(s): Florida - 06/01/2012

n the case of Geico v. Virtual Imaging, No. 3D11-581, the Third District Court of Appeal has certified the following question to the Florida Supreme Court as being one of great public importance:  "WITH RESPECT TO PIP POLICIES ISSUED AFTER JANUARY 1, 2008, MAY THE INSURER COMPUTE PROVIDER REIMBURSEMENTS BASED ON THE FEE SCHEDULES IDENTIFIED IN SECTION 627.736(5)(a), FLORIDA STATUTES, EVEN IF THE POLICY DOES NOT CONTAIN A PROVISION SPECIFICALLY ELECTING THOSE SCHEDULES RATHER THAN 'REASONABLE MEDICAL EXPENSES' COVERAGE BASED ON SECTION 627.736(1)(a)?" To view the Court’s full opinion, click here.

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

Category(s): Georgia - 06/01/2012

On June 18, 2012, the Georgia Supreme Court issued a divided opinion in which it reversed the Georgia Court of Appeals’ reversal of a partial summary judgment to James M Hoover on his claim that Maxum Indemnity Company breached its duty to defend its insured, Emergency Water Extraction Services, LLC (“Emergency”) which employed Mr. Hoover.  Mr. Hoover was assigned the breach of duty claim by Emergency, and the underlying claim was based upon injuries that Mr. Hoover suffered while working as a technician for Emergency.  Maxum denied coverage on the basis of an employer liability exclusion and refused to undertake a defense of Emergency.  In reversing the Court of Appeals, the Supreme Court held that Maxum could not deny the claim based upon employer liability exclusion and reserve its rights to assert other defenses later.  The Supreme Court also ruled that even if Maxum could both deny the claim and reserve its rights for later defenses, the language of the reservation was ambiguous and thus would be construed in favor of the insured, to wit: “the right to disclaim coverage on any other basis that may become apparent as this matter progresses and as Maxum obtains additional information.”  Finally, the Supreme Court ruled that Maxum waived its notice defense because it did not specifically raise it in the denial of claim/reservation of rights letter or its motion for summary judgment.  Based upon the foregoing, the Supreme Court ruled that the Court of Appeals’ reversal of the trial court’s partial sum judgment order holding that Maxum breached its duty to defend Emergency was error and reversed.

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

Category(s): Georgia - 06/01/2012

On June 8, 2012, the Georgia Court of Appeals reversed a summary judgment motion arising from a declaratory action filed by State Farm arising out of a sexual battery that occurred when a disabled adult ward was riding in the back seat of a car insured by State Farm.  The car was driven by the husband of the insured as part of his job of transporting medical patients to and from medical appointments.  The disabled adult ward was inappropriately touched by another passenger in the car on the way to one of her appointments.  In reversing the summary judgment in favor of the adult disabled ward, the Court of Appeals held that the damages alleged in the suit did not arise out of the ownership, maintenance or use of the car and were thus not covered under the policy of insurance.

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

Category(s): Iowa - 06/01/2012

Against the background that a certificate of insurance cannot add, detract, or otherwise vary the terms of the underlying policy and a dispute between lenders and insurers over whether, and to what extent, a binder constitutes evidence of insurance, the Iowa Commissioner of Insurance is proposing a new, formal administrative rule setting forth the content and timing of issuance of certificates of insurance and binders. The rule prescribes that forms of the Association for Cooperative Operations Research and Development (ACORD) or ISO binder forms shall be utilized within 20 business days upon request in certain commercial transactions.

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

Category(s): New Mexico - 06/01/2012

Governor Suzanna Martinez and Superintendent of Insurance John Franchini each issued proclamations to aid victims of two major New Mexico wildfires, the Whitewater Baldy Complex fire in the Gila Wilderness, the largest wild fire in state history, and the Little Bear wildfire near the resort town of Ruidoso which destroyed over 230 homes. 

The Governor issued declarations of emergency for Catron and Lincoln Counties and a statewide emergency declaration calling for the mobilization of additional state resources to assist local efforts in flood mitigation and emergency preparedness to deal with the damage caused by these fires.

Superintendent Franchini issued an Insurance Division bulletin (No. 2012-07 declaring the wildfires to be a "catastrophe" as defined by NMSA 1978 §59A-16-20(f) which implements enhanced claims procedures for insurance claims resulting from these fires.

Gary Kilpatric, Esq. - MONTGOMERY & ANDREWS, P.A., (505) 982-3873