November 2016 Alerts

Welcome to the November 2016 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.

Ryan Smart, Esq., FORC Alert Editor

Category(s): Florida - 12/01/2016

Florida Supreme Court Limits FIGA Obligations to Policyholders

In a unanimous decision, the Florida Supreme Court recently upheld the Second District Court of Appeal’s ruling that the Florida Insurance Guaranty Association’s (“FIGA”) obligations to a policyholder are statutory and do not arise until the insurer has been adjudicated insolvent, rejecting the premise that a policyholder’s rights under FIGA is identical to the rights stipulated by the insurance contract with its previous insurer. The Court’s decision came in Leandro de la Fuente, et al. v. Florida Insurance Guaranty Association on October 20, 2016. In Leandro, the policyholders argued that they were entitled to recover against FIGA for sinkhole losses that occurred after the insurer issued their homeowner’s policy in May 2009, which was prior to the 2011 amendments to the statutes that governed FIGA. In its decision, the Florida Supreme Court stated that the applicable law is the one at the time of the insurer’s insolvency, noting that “FIGA was not and is not a party” to the policyholder’s insurance contract, and, therefore, “the Florida Legislature – not the insurance policy – determines what coverage, if any, FIGA provides to those who experience a covered loss within the meaning of the statute in effect when their insurer is declared insolvent.”

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

Category(s): Florida - 12/01/2016

Florida Working Group on Balanced Billing for Emergency Transportation Services

Florida Consumer Advocate Sha’Ron James hosted an Emergency Medical Transportation Working Group meeting on Monday, October 17, 2016 in which members of the working group provided brief overviews of their organizations views and concerns regarding balanced billing. The Working Group discussed concerns if balance billing is eliminated, the potential that medical service providers may refuse to contract with health insurance providers thereby leaving consumers with huge bills, and concerns over the medical treatment realities consumers face. The focus group meetings will continue over the next year and the next meeting is tentatively scheduled for Friday, February 3, 2017.

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

Category(s): Florida - 12/01/2016

OIR Approves Workers’ Compensation Rate Increase

The Florida Office of Insurance Regulation (“Office”) issued a Final Order authorizing an overall combined statewide average rate increase of 14.5 percent for workers’ compensation insurance based on a rate filing by the National Council of Compensation Insurance (“NCCI”). The Office noted that the rate increase is applicable to both new and renewal workers’ compensation insurance policies effective in Florida as of December 1, 2016. NCCI initially proposed a 19.6 percent increase based on two Florida Supreme Court decisions - Castellanos v. Next Door Company and Westphal v. City of St. Petersburg - which held provisions of Florida’s workers compensation law related to certain benefits caps and attorney’s fees to be unconstitutional. NCCI noted their filing did not take into account the unfunded liability for extra benefits and attorney’s fees applicable to current claims to which workers compensation insurers are now exposed. The most recent NCCI estimate for this unfunded liability exceeds $1 Billion.

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

Category(s): Florida - 12/01/2016

U.S. Supreme Court Rejects Florida Workers’ Compensation Case

The U.S. Supreme Court declined to take up a case challenging Florida’s workers’ compensation system. The petitioner, Daniel Stahl, had requested the U.S. Supreme Court evaluate the constitutionality of Florida’s workers’ compensation system after the Florida Supreme Court in April discharged its jurisdiction and declined to review, just weeks after hearing oral arguments. In Stahl v. Hialeah Hospital, the petitioner argued that the exclusive remedy provision of Florida’s Workers’ Compensation Act was unconstitutional, specifically the requirement of a $10 copay for medical visits after a claimant reaches maximum medical improvement and the elimination of permanent partial disability (PPD) benefits. The Florida Supreme Court’s Stahl decision came on the heel of its holding in Castellanos v. Next Door Company, where the Court found that the statutory fee schedule for attorneys representing claimants was unconstitutional and that it violated both state and federal guarantees of due process.

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

Category(s): Virginia - 12/01/2016


Effective September 1, 2016, the Virginia State Corporation Commission, Bureau of Insurance issued new rules governing rate stabilization in property and casualty insurance. The new rules implement the provisions of § 38.2-1906 F of the Code of Virginia, including the 2016 amendments, that allow limits on rate increases and decreases on (i) renewal policies; (ii) policies acquired by an insurer from another insurer pursuant to a written agreement of acquisition, merger or sale; or (iii) policies acquired by an agent book of transfer. The new rules establish uniform standards for all rate stabilization plans, filing requirements, and prohibited actions for insurers that elect to cap rates. The new rules are set out at 14VAC5-345-10 through 14VAC5-345-70 with forms.

Scott J. Sorkin, Esq. - BLAND & SORKIN P.C., (804) 747-6667 x12 ,

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