Category(s): Florida - 09/27/2017

During the Florida Cabinet meeting on August 16, 2017, a significant amount of time was spent receiving legislative budget requests (“LBRs”) from the various Cabinet agencies. Of particular interest was the comment from Insurance Commissioner David Altmaier during his presentation that his office’s top priority for the 2018 Legislative Session is securing passage of assignment of benefits (“AOB”) reform.
 
The 2018 Session, which begins January 9, will be the sixth session that OIR, Citizens Property Insurance Corporation (“Citizens”) and the industry have attempted to pass language to curtail the practice where contractors convince homeowners to sign over policy claims benefits and then submit inflated invoices. Commissioner Altmaier noted that the attorney fee framework encourages excess litigation which increases rates for consumers.
 
Agriculture Commissioner Adam Putnam, 2018 candidate for Governor, asked what could be done to address the problem without a statutory change. Commissioner Altmaier responded that OIR has approved policy form changes for Citizens and he expects to see private insurers mirror these form changes. New Chief Financial Officer (“CFO”) Jimmy Patronis, at his first Cabinet meeting since being appointed by the Governor, asked about the OIR’s efforts to educate consumers about this practice. In response, Commissioner Altmaier stated that a number of bulletins distributed to policyholders when Hurricanes Matthew and Hermine were approaching the state were designed to help homeowners know their rights, as well as aid them in identifying unsavory behavior from those who might take advantage. Reports received from homeowners during and after those storms indicate that the industry expanded its outreach to consumers to determine if they had a claim or needed assistance.
 
Governor Scott inquired about the AOB issue as it relates to vehicle windshields. Commissioner Altmaier explained that there is more AOB litigation on auto coverage regarding windshields than there are on property coverage but the key solution – attorney fees – is the same.

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

Category(s): Florida - 09/27/2017

Florida’s Auditor General recently released a report on the Statewide Medicaid Managed Care program which concluded that the Agency for Health Care Administration (“AHCA”) failed to adequately monitor managed care organizations (“MCOs”). The Report  also found that AHCA failed to identify the basis for the amount of liquidated damages levied against MCOs and obtain proper information to determine the damages.
 
The Report noted that AHCA failed to establish protocol and procedures to review the process for collecting social security numbers (“SSNs”). Further, it stated that AHCA should improve employee access to the Florida Accounting Information Resource (“FAIR”) Subsystem, use periodic independent assessments of organization controls for the VERSA Regulation system and provide greater accountability for state-owned property. It also noted that more accurate recordkeeping of tangible personal property acquisitions was needed.

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

Category(s): Florida - 09/27/2017

On September 13, 2017, Florida Insurance Commissioner David Altmaier issued an Emergency Order in the aftermath of Hurricane Irma. The purpose of the Emergency Order is to suspend and activate certain insurance rules and statutes for the purpose of public health and safety for Florida’s policyholders. The Emergency Order prohibits insurance companies from canceling or non-renewing policies covering residential properties damaged by Hurricane Irma for at least 90 days. Additionally, it allows 90 days to policyholders to supply information to their insurance company and prohibits any efforts to increase rates on policyholders for 90 days.

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

Category(s): Florida - 09/27/2017

On August 28, 2017, the National Council on Compensation Insurance (“NCCI”) submitted a filing to the Florida Office of Insurance Regulation (“OIR”) in which NCCI recommended an average premium decrease of 9.6 percent, effective January 1, 2018. The proposal comes in the wake of a 14.5 percent rate increase that became effective in December 2016 after the Florida Supreme Court issues two important rulings affecting workers’ compensation insurance. 
 
In Castellanos v. Next Door Company and Westphal v. City of St. Petersburg, the Court declared several provisions of the state’s workers’ compensation statutes unconstitutional, weakening legislative reforms approved in 1994 and 2003 that were intended to curb the system’s growing costs and higher premiums for employers and businesses. The decisions struck down Florida laws that restricted claimants’ attorneys’ fees to a statutory formula tied to the benefits secured by the claimant and limited the recovery of benefits to 104 weeks for temporary total disability (“TTD”). Both decisions were celebrated by claimants’ attorneys, who believed the laws placed an undue burden on their practice and favored insurers.
 
As a result of the Court’s decisions, the NCCI proposed a workers’ compensation rate increase of 19.6 percent. Ultimately, OIR approved a 14.5 percent increase effective December 1, 2016. Jeff Eddinger, senior executive director for NCCI, said Monday that the 14.5 percent increase was designed to address at least through 2017 higher costs associated with the Florida Supreme Court rulings. In contrast, Monday's filing is based on data from two years before the Supreme Court rulings, the most-recent data available.
 
The premium increase resulted in the Florida Senate and House advancing competing measures in the 2017 session. House Bill 7085 would have made a number of reforms, including permitting direct payment of attorneys by claimants, increasing the combined TDD and temporary permanent disability benefits (“TPD”) from 104 to 260 weeks, and closing a benefit gap that was at issue in Westphal. Like the House bill, Senate Bill 1582 permitted deviations from the current statutory attorney fee schedule; however, the maximum hourly rate that could be used to determine the fee would have been $250 per hour, instead of the $150 per hour proposed in the House bill. Despite strong efforts by insurers and the businesses community, neither measure passed.
 
OIR is expected to hold a hearing on the proposal in October. We will continue to monitor developments related to NCCI’s proposal and workers’ compensation in Florida. Should you have any questions, please do not hesitate to contact us.

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

Category(s): Florida - 09/27/2017

On August 9, 2017, Senate President Joe Negron (R-Stuart) appointed Blake Capps to the Citizens Property Insurance Board of Governors. The appointment takes effect immediately and will expire on July 31, 2020.
 
Capps is a graduate of the University of Florida and Mercer University Law School and is a founding partner at Capps Roofing, Inc. The family-owned roofing company operates in Martin, Palm Beach, and St. Lucie Counties.
 
This appointment comes on the heels of Governor Rick Scott’s appointment of Chris Gardner to the Citizens Board. Gardner, CEO of Hub International Florida in Winter Park, served as the House Speaker appointee to the Citizens Board until it recently expired. Gardner will now serve until July 31, 2019. The Governor also re-appointed two members to the Citizens Board – Jim Holton and Bette Brown.
 
Holton is the owner of Holton Companies, a real estate development company. He received his bachelor’s degree from Stanford University and his law degree from Boston University. His term ends July 31, 2020. Bette Brown, of Tavernier, is an executive of the CenterState Bank in Tavernier. She received her bachelor’s degree from Stetson University. She will serve until March 23, 2020.

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

Category(s): Georgia - 09/28/2017

On September 27, 2017, The Department of Insurance issued Bulletin 17-EX-1 which applies to all insurance companies, brokers and agents selling, soliciting or negotiating surplus lines insurance in Georgia.  The Bulletin reminds surplus lines brokers that they are prohibited from charging customers added fees in excess of the amount of premium shown on a surplus lines insurance policy.  

The Department has stated that collecting fees in excess of the monies specified in the policy are considered an unfair method of competition and an unfair and deceptive act or practice in the insurance business and is a violation of the Georgia Unfair Trade Practices Act.  The Commissioner can impose a monetary penalty of up to $5,000.00 for every act or violation of the Georgia Unfair Trade Practices Act.

Tony Roehl, Esq. - BAKER HOSTETLER LLP, (404) 256-8419 , troehl@bakerlaw.com

Category(s): Georgia - 09/27/2017

On September 10, 2017, The Georgia Department of Insurance issued Directive 17-EX-7 calls for leniency for Georgia residents making premium payments after Hurricane Irma.  Hurricane Irma caused extensive property damage, injuries and several deaths throughout Georgia.  As a result of the storm, millions of Georgia residents lost power and many have yet to have it restored.  On September 10, 2017, Governor Deal issued a State of Emergency for all counties which remained in effect until September 17, 2017.  

The Georgia Department of Insurance encourages insurers to provide relief to policyholders, exercising leniency where premium payments may appear tardy due to the disruption of services caused by the storm.  Insurers processing lawful cancellations or non-renewals during this period are encouraged to ensure that policyholders impacted have sufficient time to address their insurance needs.

Tony Roehl, Esq. - BAKER HOSTETLER LLP, (404) 256-8419 , troehl@bakerlaw.com

Category(s): Georgia - 09/27/2017

On August 22, 2017, the Georgia Insurance Commissioner issued Directive 17-EX-5, which withdraws and replaces Directive 15-EX-2 related to the treatment of individual hospital and fixed indemnity insurance policies as excepted benefits and the required attestation of a consumer applicant for these types of policies that he or she has purchased minimum essential coverage for purposes of Section 5000A(f) of the Internal Revenue Code.  In light of Central United Life Ins. Co. v. Burwell, (D.C., DC 2016), which held that this federally required attestation was unenforceable, Directive 17-EX-5 clarifies that individual hospital and fixed indemnity insurance policies qualify as excepted benefits if (1) there is no coordination between benefits provided under these policies with an exclusion of benefits under any other health coverage, (2) benefits provided under these policies are paid in a fixed dollar amount per period of hospitalization, illness or service and (3), for these policies issued on or after January 1, 2015, required notice of their supplemental nature must be stated in the application for insurance.

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): New Mexico - 09/27/2017

The New Mexico Attorney General, Hector Balderas (D), has filed suit against one of New Mexico's large health insurers for allegedly failing to pay premium taxes.  The lawsuit was filed against Presbyterian Insurance Company, and the lawsuit also includes allegations that the company falsified Medicaid deductions.  The complaint alleges the health system realized “a multimillion-dollar windfall” by evading taxes and surcharges owed on Medicaid premiums from 2001 to 2015.  Among the allegations, the state contends Presbyterian claimed more than $754 million in unlawful deductions for calendar years 2001 through 2011.  Presbyterian has denied the allegations in the complaint, and it maintains that it has fully paid its premium tax obligations.

Gary Kilpatric, Esq. - MONTGOMERY & ANDREWS, P.A., (505) 982-3873
J. Brent Moore, Esq. - Moore Law, PC, (505) 870-7496 , jbm@moorelawpc.com

Category(s): Tennessee - 09/27/2017

The Tennessee Department of Commerce and Insurance has invited insurance carriers offering plans on the federally facilitated marketplace for the State of Tennessee to overview their plans at a public meeting on October 5, 2017 from 10am to 12pm.  Carriers expected to present at the meeting are BlueCross BlueShield of Tennessee, Cigna, and Oscar.

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