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

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 , karlinskyf@gtlaw.com

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

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): 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 , ssorkin@blandsorkin.com