Category(s): National - 03/28/2022

Just like 2021, The National Association of Insurance Commissioners (NAIC) has determined climate resiliency will be one of four regulatory priorities for the upcoming year. To support this effort, the NAIC will consider the established of a Center of Excellent on Catastrophe Modeling. The NAIC will also evaluate financial regulatory approaches to climate resiliency with its relevant committees and working groups.

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

Category(s): Florida - 03/29/2022

The Florida Division of Investigative and Forensic Services and the Florida Division of Workers’ Compensation released their annual report  on their efforts and finding in combating workers’ compensation in the state. During this fiscal year, the Division faced several challenges in the completion of cases during the COVID-19 pandemic.

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

Category(s): Florida - 03/28/2022

On February 11th, 2022, Gov. DeSantis announced that more than $91 million would be distributed to Florida panhandle communities devastated by Hurricane Michael. The funding is through the Florida Department of Economic Opportunity’s Rebuild Florida Mitigation General Infrastructure Program.

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

Category(s): Georgia - 03/28/2022

On March 11, 2022 Commissioner John F. King issued Directive 22-EX-2 to advise automobile insurers on appropriate method for calculating taxes to be paid to the insured when settling total loss vehicle claims.  The Directive notes that the purpose of insurance is to make an insured whole again following a loss, and therefore insurers of first-party auto insurance claims must properly calculate taxes to be paid by the insured when replacing a lost vehicle.
Beginning April 1, 2022, for first-party total loss vehicle claims, insurers using the cash equivalent method of settlement must calculate the actual taxes required to be paid by the insured when replacing a total loss vehicle.  Insurers may not base tax payments on an amount lower than the agreed-upon total loss value as this does not accurately provide for the unique cash value of the lost vehicle and fails to make the insured whole.

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

Category(s): New York - 03/28/2022

In furtherance of the Circular Letter issued by the New York State Department of Financial Services (DFS) in September 2020, the DFS released guidance for New York domestic insurers in November, which states that insurers are expected to manage financial risks from climate change by taking actions that are proportionate to the nature, scale and complexity of their businesses. For instance, insurers should incorporate climate risk into their financial risk management and manage this risk through their enterprise risk management functions. Insurers must have an implementation plan in place by August 15, 2022, with respect to the DFS’s expectations for corporate governance and organizational structure changes. With respect to implementing more involved changes (e.g., reflecting climate risks in the ORSA and using scenario analysis when developing business strategies), insurers are encouraged to start working on these changes, although the DFS plans to issue further guidance with more specific timing information.

Allison J. Tam, Esq. - WILLKIE FARR & GALLAGHER LLP, (212) 728-8282 , atam@willkie.com

Category(s): Puerto Rico - 03/28/2022

In support of the Office of the Insurance Commissioner of Puerto Rico’s efforts to regain Puerto Rico’s status as an NAIC accredited member, Puerto Rico Governor, Pedro R. Pierluisi, introduced measures, currently Senate Bills 721 PS721  and 722 PS722,  for the adoption in Puerto Rico of the NAIC’s Corporate Governance Annual Disclosure Model Act and the implementation of the Covered Agreement provisions in the NAIC’s Credit for Reinsurance Model Act (785), respectively.

C. Ignacio Matos, Esq. - REXACH & PICO, CSP, (787) 723-8520 , imatos@rexachpico.com

Category(s): Virginia - 03/28/2022

The Bureau of Insurance administers the arbitration process for balance billing claim disputes between carriers and providers. In response to a determination that certain provider groups are filing arbitration requests with such frequency as to indicate a general business practice in violation of § 38.2-3445.05 D of the Code of Virginia, the Bureau issued Administrative Letter 2021-04.
In Administrative Letter 2021-04, the Bureau (i) set a standard of no more than one arbitration request per provider group during a seven day period regardless of geographic area, CPT code, or carrier involved (but bundling of claims in accordance with established rules is allowed); (ii) reminded parties involved in payment disputes to engage in good faith negotiations as required by § 38.2-3445.01 F; and (iii) reminded carriers to pay a commercially reasonable amount as required in § 38.2-34405.01 F.  
In addition, the Bureau recommended that carriers and providers consider the results of previous arbitration decisions and adjust the payment offer during negotiations as appropriate.

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

Category(s): Washington - 03/28/2022

The Court of Appeals for the State of Washington, in a title matter, created a new bad faith attorney’s fees remedy for third party claimants, establishing “prelitigation misconduct” as to claim administration that may compel insurers to consider refiling rates for this new third party exposure:

In a case of first impression, we hold that fees can be awarded for the prelitigation bad faith of a party that entails a refusal to honor a valid claim, thereby forcing the plaintiff to file suit to rectify a problem.

Prior to this decision, attorney’s fees for insurance bad faith were generally limited to first party insureds by both precedent and legislative action. That first party distinction was erased by the Court to expand to third party claimants because: 

. . . the comment does not rule out bad faith as a permissible ground and presumably one Washington court can finally grant fees on this equitable basis. We are that court.
Prelitigation misconduct refers to obdurate or obstinate conduct that necessitates legal action to enforce a clearly valid claim or right.

Cite as Dalton M., LLC v. North Cascade Trustee Services, Inc., (No. 37448-3-III)(State of Washington Court of Appeals, Div.III)(Published Decision Filed February 17, 2022).

Steven Beeghly, Esq. - BEEGHLY RICOY LAW GROUP, Serving the Pacific Northwest, (206) 618-6110 , sb@BeeghlyRicoy.com