Category(s): Connecticut - 07/26/2017

On May 16, Governor Dannel P. Malloy signed HB 7025, which creates a new legal process whereby a Connecticut domestic insurer may divide into multiple insurers and allocate assets and obligations to the “new” insurer. The new insurer would become a legal successor to the original insurer. HB 7025, which is now known as Connecticut Public Act 17-2, requires dividing insurers to develop a division plan before effectuating a division. The plan must comply with requirements specified in Public Act 17-2 and be approved by the insurance commissioner and the dividing insurer.

Alan J. Levin, Esq. - LOCKE LORD LLP, (212) 912-2777 , alan.levin@lockelord.com

Category(s): Florida - 07/26/2017

On June 26, 2017, Florida Governor Rick Scott signed the remaining five insurance-related bills from the 2017 Regular Session. Outlined below are the signed five bills that are of interest to insurers: 
 
Anti-Fraud Efforts – HB 1007 by Rep. Holly Raschein (R-Key Largo)
This measure requiring all insurers to adopt an anti-fraud plan was a priority of outgoing CFO Jeff Atwater. Smaller insurers are required to also establish and maintain a special investigative unit (SIU) for contract for SIU services. In addition, the bill requires every insurer to designate an employee who is responsible for implementing the requirements related to fraud investigation. 
 
Anti-Fraud Efforts Public Records Exemption – HB 1009 by Rep. Holly Raschein (R-Key Largo) 
This bill was a companion to HB 1007 and provides that the following information about a Special Investigative Unit (SIU) held by DFS is confidential and exempt from the public records law:  
•	An insurer description of its anti-fraud education and training; 
•	A description of the insurers anti-fraud unit; 
•	The rationale for the staffing level and resources provided to the anti-fraud unit; 
•	The number of: 
o	Claims referred to the insurer anti-fraud investigative units;
o	Other insurance fraud matters referred to the insurer anti-fraud units that are not claim related;
o	Claims investigated or accepted by insurer anti-fraud unit; and
o	Insurance fraud matters investigated or accepted by the insurer that are not claim related; and 
•	The estimated dollar amount or range of damages on cases referred to DFS or other agencies. 

Department of Financial Services (DFS) – HB 925 by Rep. Mike Miller (R-Orlando)
The DFS legislative package contains mostly clarifying provisions for the Divisions of Treasury, Accounting and Auditing, State Fire Marshal, Agents and Agency Services, and Risk Management.
 
Workers’ Compensation Public Records Exemption – HB 1107 by Rep. Ben Albritton (R-Bartow)
This measure clarifies that personally identifying information of an injured or deceased worker filed with the Department of Financial Services (DFS), the Agency for Health Care Administration (AHCA), and the Division of Administrative Hearings (DOAH) is confidential and exempt from the public records mandates, both constitutional and statutory. 
 
Bail Bonds – HB 361 by Rep. David Santiago (R-Deltona)
A number of ambiguities and inconsistencies within the statutes addressing bail bonds are addressed in this bill. Specifically, the bill Narrows the obligation of the bail bond agent, such that the defendant’s failure to appear at proceedings not specifically ensured by the bond and the defendant’s breach of any other condition no longer constitute a breach of the bail bond agent’s commitment and obligation. It also provides the reasons for which forfeiture can be discharged.

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

Category(s): Florida - 07/26/2017

On June 14, 2017 before the Cabinet, sitting as the Financial Services of Commission (“FSC”), Florida Office of Insurance Regulation (“OIR”) Commissioner, David Altmaier presented his yearly performance evaluation and leadership assessment, as well as a number of proposed rule changes that update or repeal obsolete or statutorily duplicative language for approval.

The Commissioner also issued a commendation of the new Deputy Commissioners, Susanne Murphy (Property & Casualty) and Eric Johnson (Life & Health), and outgoing Chief of Staff (COS), Belinda Miller. The Commissioner has a shortlist of names to fill the COS position and is eager to do so.   

The FSC ultimately adopted the following specific rules changes:
•	Changing the definition of “personal financial and health information” contained in Rule 69O-128.025 (“Confidentiality of Personal Financial and Health Information”) because it conflicted with the definition in section 624.23, F.S.
•	Updating the standards used by OIR to review insurers’ quarterly and annual financial reports to the most current versions adopted by the National Association of Insurance Commissioners (NAIC).  
•	Modernizing provisions in 41 rules regarding the rate and form review processes by requiring insurer to submit all documents electronically and eliminated obsolete language. 
•	Authorizing OIR to publish a proposal to repeal duplicative laws for the following rules to streamline Florida law:  Rules 69O-136.002 (“Foreign and Alien Insurers Filing for a Certificate of Authority (COA)”); and 69O-136.006 (“Domestic Insurers Filing for an Application for Permits”).  
•	Authorizing OIR to hold rule hearings to update Chapter 69O-136, F.A.C. regarding the forms needed to issue COAs and licenses to insurers.  A new rule is being proposed that, if approved, would require domestic captives to complete an application for licensure and submit documents electronically.

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

Category(s): Florida - 07/26/2017

On June 26, 2017, Florida Governor Rick Scott named Jimmy Patronis, former member of the House of Representatives and restaurateur, as the new Chief Financial Officer (CFO) for the state. Patronis will replace current CFO Jeff Atwater who announced in April he would vacate his post to assume the CFO position at Florida Atlantic University.

Patronis was first elected to the Florida House in 2006 and served until 2014 when term limits prevented him from running again. Patronis currently serves on the Public Service Commission (PSC), a position he must vacate when he joins the Florida Cabinet. Further, in early March, Governor Scott appointed Patronis to the Constitutional Revision Commission, on which he will continue to serve during his tenure as CFO.

Patronis was sworn in on June 30, 2017 and will serve until November 2018.

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

Category(s): Georgia - 07/26/2017

Government Employers Insurance Company v. Morgan, A17A0020, 2017 WL21119165 (Ga. App. 2017).
On May 16 2017, the Georgia Court of Appeals ruled that, in the absence of an affirmative selection of a lower amount of insurance coverage, that O.C.G.A. Section 33-7-11(a) provides, as a default, a limit of uninsured motorists insurance coverage equal to the automobile liability insurance limits of coverage under an auto insurance policy.  The Morgan’s had purchased an auto insurance policy from GEICO beginning in 1986 and had made several changes to the policy over several subsequent years, including rejecting uninsured motorist insurance coverage in its entirety in 1992, but adding uninsured motorist insurance coverage back to the policy in 2003.  The Morgan’s did not complete an uninsured motorist selection form in 2003, although GEICO claimed that the request was made by telephone.  The Court of Appeals concluded that O.C.G.A. Section 33-7-11(a) was intended to make an auto insurance policy’s liability limits the default amount for uninsured motorist insurance coverage unless the insured affirmatively elects  uninsured motorist coverage in a lesser amount and that there is no requirement that the uninsured motorist coverage affirmative election be made in writing.  Further, the UM default provision of O.C.G.A. Section 33-7-11(a) applies whenever the insured obtains uninsured motorist insurance coverage, whether that occurs when the insured first obtains uninsured motorist insurance coverage or requests uninsured motorist insurance coverage at a later date during the insurance policy’s term or renewal term.

Massey v. Allstate Insurance Company, A17A0524, 2017 WL2265380 (Ga. App. 2017).
On May 24, 2017, the Georgia Court of Appeals reversed the trial court’s grant of summary judgment to Allstate Insurance Company (“Allstate”) that an umbrella insurance policy issued to Jody Massey (“Massey”) did not include uninsured motorist insurance coverage. The Georgia Court of Appeals ruled that: (1)  O.C.G.A. Section 33-24-45, which contains the requirements for cancelling and non-renewing an auto insurance policy, applies to an umbrella insurance policy which includes uninsured motorist insurance coverage and (2) Allstate’s failure strictly to adhere to the non-renewal requirements of O.C.G.A. Section 33-24-45 rendered the non-renewal of the uninsured motorist insurance coverage in the umbrella policy ineffective, thus continuing Massey’s uninsured motorist insurance coverage in the umbrella insurance policy at its original limits.

Camacho v. Nationwide Mutual Insurance Company, No. 16-1425, 2017 WL 2889470 (11th Cir. July 7, 2017)
On July 7, 2017, the 11th Circuit Court of Appeals, in a per curiam opinion, affirmed the federal district court’s $8 million dollar bad faith award against Nationwide for failure to settle claims based upon an automobile accident which occurred in 2006.  The 11th Circuit had been urged by numerous amicus groups, including the Georgia Chamber of Commerce, to overturn the district court award based on several errors, including a jury instruction which permitted an award to the plaintiff based upon of finding of either negligence or bad faith.  The 11th Circuit, in affirming the district court, confirmed that plaintiff’s in Georgia may prevail in bad faith actions based upon merely the negligence of an insurer.

Brian T. Casey, Esq. - LOCKE LORD LLP, (404) 870-4638 , bcasey@lockelord.com
David M. Green, Esq. - LOCKE LORD LLP, (404) 870-4657 , david.green@lockelord.com

Category(s): Minnesota - 07/27/2017

Minnesota Governor Mark Dayton signed into law significant revisions to Minnesota’s market conduct examination law with the unanimous support of the Minnesota legislature. These revisions, with some input from the Minnesota Department of Commerce, came as a result of perceived overreach and abusive tactics by the Minnesota market conduct examination team. Among other things, the revised law requires the Commissioner to provide the insurance company to be examined with the details associated with the proposed examination, as well as the estimated length of the examination, a budget for the examination, and detailed descriptions regarding how the market conduct examination will be conducted.

David M. Aafedt, Esq. - WINTHROP & WEINSTINE, P.A., (612) 604-6447 , daafedt@winthrop.com

Category(s): Texas - 07/26/2017

Effective January 1, 2018, Texas domestic property and casualty insurers can insure excess and surplus lines risks, if the insurer writes no business in the admitted market; has $15 Million in capital and surplus or is listed on the NAIC Quarterly Listing of Alien Insurers; and all the risks insured are eligible surplus lines risks.

Domestic Surplus Lines Insurers may not issue policies to meet auto financial responsibility requirements or provide workers compensation insurance. These companies will enjoy rate and form freedom and will not be subject to guaranty fund assessments. 

Property and casualty insurers domiciled in other states may re-domesticate to take advantage of the new Texas law. The Texas Department of Insurance will be adopting rules regarding forms, documents, and disclosures for Domestic Surplus Lines Insurers.  

For more information contact Burnie Burner or Julie Pomerantz.

Burnie Burner, Esq. - MITCHELL, WILLIAMS, SELIG, GATES & WOODYARD, P.L.L.C., (512) 480-5100 , bburner@mwlaw.com
Julie M. Pomerantz, Esq. - MITCHELL, WILLIAMS, SELIG, GATES & WOODYARD, P.L.L.C, (512) 480-5100 , jpomerantz@mwlaw.com

Category(s): Wisconsin - 07/26/2017

In late June, Wisconsin became the latest state to adopt a domestic surplus lines law when Governor Scott Walker signed 2017 Wisconsin Act 16 (https://docs.legis.wisconsin.gov/2017/related/acts/16.pdf).  This law permits Wisconsin domestic insurers to sell surplus lines insurance in Wisconsin, which will allow Wisconsin domestic companies to sell surplus lines insurance in all 50 states from a single insurer.  Companies must have at least $15 million in capital and surplus and, if it has previously issued admitted policies in Wisconsin, must establish a plan for the treatment of such policies once it becomes a domestic surplus lines insurer.  Policies issued in Wisconsin by a domestic surplus lines insurer are treated as surplus lines policies for all purposes, including taxation and the Wisconsin Insurance Guaranty Fund.

Feel free to contact us if you have any questions.

Kevin G. Fitzgerald, Esq. - FOLEY & LARDNER LLP, (414) 297-5841 , kfitzgerald@foley.com
Morgan J Tilleman, Esq. - Foley & Lardner LLP, (414) 297-5871 , mtilleman@foley.com