Alert Edition July 2023

Welcome to the July 2023 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.

Regards,
C. Ignacio Matos, Esq., FORC Alert Co-Editor
Ryan Smart, Esq., FORC Alert Co-Editor
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Category(s): National - 07/24/2023

Senate Launches Investigation into Insurance Companies’ Climate Risk Evaluation

The Senate Budget Committee, led by Senator Whitehouse (D-RI), alongside Senators Wyden (D-OR) and Sanders (I-VT), initiated an investigation into the evaluation of climate-related risks by major U.S. insurance companies. The committee seeks to understand why these companies continue to support and underwrite fossil fuel expansion projects that contribute to climate risks. They have also raised concerns about the lack of transparency surrounding the insurance industry’s decision-making processes and the pricing of policies that insure such projects.

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

Category(s): National - 07/24/2023

Two More States Pass Bills to Require Disclosure of Litigation Funding

Lawmakers in Montana and Louisiana passed bills this year to require disclosure of litigation funding contracts. Business groups are pushing for similar rules in federal courts nationwide. On May 2, Montana Gov. Greg Gianforte, signed into law Senate Bill 269, which requires parties who file lawsuits to disclose any litigation financing agreement, limits fees to 25% of the judgment or settlement, and makes financers liable for any costs and fees assessed if they end up on the losing side. The Louisiana Legislature approved a similar bill, which cleared the state Senate on June 13 and now awaits a signature by Gov. John Bel Edwards.

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

Category(s): California - 07/24/2023

CDI Issues Pre-Hearing Notice - Export List Hearing Request for Proposed Additions, Modifications or Deletions to the Export List

On July 14, 2023, the CDI issued a Pre-Hearing Notice - Export List Hearing Request for Proposed Additions, Modifications or Deletions to the Export List  notifying interested parties of the opportunity to make recommendations for additions to or deletions from the Export List in advance of the hearing, which is to be scheduled in the next few months. The Export Lists identifies types of coverage or risk that can be placed on a surplus line basis without a diligent search of the admitted market because the Commissioner has determined that there is not a reasonable or adequate market among admitted insurers or that the type of coverage is for new, innovative products for which a reasonable or adequate market among admitted insurers has not had time to develop.

Nicole M. Zayac, Esq. - Willkie Farr & Gallagher LLP, (415) 858-7443 , nzayac@willkie.com

Category(s): Florida - 07/24/2023

Florida Adopts NAIC Model Rule Update for Annuity Sales

Governor Ron DeSantis of Florida officially started his campaign for the Republican presidential nomination on May 24, and he also helped efforts to keep traditional annuity sales commissions alive by signing state House Bill 1185. The bill includes the annuity sales rule model update developed by the National Association of Insurance Commissioners (NAIC). Florida became the 37th state to adopt the NAIC model update.

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

Category(s): Florida - 07/24/2023

Governor DeSantis Signs Anti-ESG Legislation

On May 2, 2023, Gov. Ron DeSantis put his pen to paper against so-called “woke” banking. HB 3 aims to “protect Florida retirement accounts and state investments from financial discrimination by eliminating the consideration of environmental and social governance investment strategies” and “protect Floridians from being denied loans based on their political or social beliefs.” DeSantis noted the legislation follows up on and amplifies last year’s ban of ESG investments on the state level, such as pension funds.

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

Category(s): Florida - 07/24/2023

Governor DeSantis Signs Consumer Protection Legislation

On May 24, 2023, Governor Ron DeSantis signed into law CS/CS/HB 1185, by Representative Mike Giallombardo (R-Cape Coral), relating to Consumer Protection. The bill includes several consumer protection provisions for industries regulated by the Florida Department of Financial Services, including public adjusters, insurer advertisements, insurance coverage for hurricanes, and insurer underwriting timeframes.

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

Category(s): Florida - 07/24/2023

Governor DeSantis Signs Insurer Accountability Legislation

On May 31, 2023, Governor Ron DeSantis signed into law CS/SB 7052, by Senator Travis Hutson (R-Palm Coast), relating to Insurer Accountability. The bill, was approved by the legislature in the final days of the 2023 Regular Session and includes provisions relating to insurance coverage, claims handling, rates, and the state's regulatory oversight of insurers. The bill took effect on July 1, 2023.

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

Category(s): Florida - 07/24/2023

Governor DeSantis Signs Legislation to Create Digital Bill of Rights

On June 7, 2023, Governor Ron DeSantis signed Senate Bill (SB) 262, creating the Digital Bill of Rights. The legislation requires technology companies to disclose whether they prioritize search results based on political ideology. Additionally, the legislation prevents government-led censorship by prohibiting state or local government employees from colluding with certain technology companies to censor protected speech.

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

Category(s): Florida - 07/24/2023

Governor DeSantis Signs Motor Vehicle Glass and Department of Financial Services Bills Into Law

On May 16, 2023, Governor Ron DeSantis signed CS/SB 1002 Motor Vehicle Glass by Senator Linda Stewart (D-Orlando) and CS/CS/HB 487 Department of Financial Services by Representative Michelle Salzman (R-Cantonment) into law which, except as expressly specified the bills, were effective upon becoming law. This legislation provides measures to allow for firefighters’ charitable donations by creating a Direct Support Organization (DSO) to support financial efforts to protect their communities and provide life-saving equipment and resources.

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

Category(s): Florida - 07/24/2023

Governor DeSantis Signs PBM Regulation Bill

Florida Gov. Ron DeSantis signed the Prescription Drug Reform Act on May 3 to limit pharmacy benefit manager practices and hold "Big Pharma accountable." The law bans clawbacks, mail-order rebates, spread pricing, patient steering, and networks solely composed of affiliate pharmacies, according to a news release. It also aims to block data-sharing without patients' consent.

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

Category(s): Florida - 07/24/2023

OIR Insurance Commissioner Yaworsky Appoints Deputy Commissioner of Market Regulation and Deputy Commissioner of Property and Casualty

On June 5, 2023, Insurance Commissioner Michael Yaworsky announced the appointment of Sheryl Parker as the Florida Office of Insurance Regulation (OIR)’s first Deputy Commissioner of Market Regulation and Virginia Christy as OIR’s Deputy Commissioner of Property and Casualty. The Deputy Commissioner of Market Regulation position was created to further protect insurance consumers from unlawful or harmful business practices. The Deputy Commissioner of Property and Casualty oversees the Property and Casualty Financial Oversight and Product Review units.

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

Category(s): Georgia - 07/24/2023

BULLETIN 23-EX-9: FAQs Regarding Issuance of Certificates of Insurance in Georgia

On June 6, 2023, Commissioner John F. King issued Bulletin 23-EX-9 to provide answers to 20 frequently asked questions regarding the issuance of certificates of insurance (COIs) in Georgia. The intent in issuing the bulletin and FAQs was to provide clear explanations regarding the issuance, requirements, proper usage, and limitations of COIs, ensuring that all stakeholders can navigate the legal landscape in Georgia and adhere to the established guidelines. The FAQs are available here  for download.

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

Category(s): Georgia - 07/24/2023

DIRECTIVE 23-EX-3: Implementation of HB 315

On July 18, 2023, Commissioner John F. King issued Directive 23-EX-3 to inform that as of July 1, 2023, HB 315 modified O.C.G.A. 33-24-59.32 to allow the Commissioner to pass appropriate rules and regulations for diagnostic and supplemental breast screening examinations. In accordance with that authority, the Department is directing that the terms “diagnostic breast examination” and “supplemental breast screening examination” shall be defined by the guidelines established by the National Comprehensive Cancer Network as of January 1, 2022.

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

Category(s): Georgia - 07/24/2023

Friday Health Plans of Georgia, Inc. Placed into Receivership

Following its entering into a March 8, 2023, administrative supervision consent order with the Georgia Insurance Commissioner and the insolvency of its parent company HMO in Colorado, into administrative supervision on March 8, 2023, by consent order Friday Health Plans of Georgia, Inc., the Georgia HMO subsidiary of Friday Health Plans, Inc., which characterized itself as an insurtech company, fell into a receivership that will result in the company’s liquidation. HHS’s Center for Consumer Information and Insurance Oversight and the Georgia Deputy Receiver established for Georgia holders of the company’s health insurance policies to have a special open enrollment period running form June 1, 2023, to September 29, 2023, with holders of federal health exchange sourced insurance policies having until July 31, 2023, to elect to purchase a new federal health exchange policy.

Brian T. Casey, Esq. - LOCKE LORD LLP, (404) 870-4638 , bcasey@lockelord.com

Category(s): Georgia - 07/24/2023

Georgia Court of Appeals Affirms Home Health Services Passenger Van not Operated by Motor Carrier under Direct Action Statute

In Hughes v. Ace American Insurance Company, Case No. A23A0609 (May 26, 2023), the Georgia Court of Appeals affirmed the lower court’s summary judgment in favor of Ace American that a passenger van operated by home health services company that transported its patients to and from various locations, such as physicians’ offices, pharmacies and grocery stores, as an ancillary part of its business was not a motor carrier for purposes of the direction action statute under Georgia’s Motor Carrier Act, and therefore Hughes, whose truck was involved in an accident with the van, could not maintain a direct action against Ace American under its commercial auto insurance policy issued to the home health services company. The court reasoned that the van was not operated by a motor carrier because there was no separate charge to the patients for the transportation services and these services were merely ancillary to the primary business of rendering rehabilitative home health care support, which did not make the home health care services company engaged in transporting passengers for hire.

Brian T. Casey, Esq. - LOCKE LORD LLP, (404) 870-4638 , bcasey@lockelord.com

Category(s): Georgia - 07/24/2023

Georgia Court of Appeals Affirms No Insurance Coverage for Uber Driver Who Used Fake Identity

In Tisdale v. Farmers Insurance Exchange, Case No. A23A0616 (June 27, 2023), the Georgia Court of Appeals affirmed the lower court’s summary judgment in favor of Farmers Insurance that Tisdale was not entitled to coverage under Uber’s transportation networking insurance policy for her medical expenses arising from an April 2020 accident involving her car while she operated it while being logged on to Uber’s ride share service and transporting a passenger. Before the accident, Tisdale had previously worked as an Uber driver from 2015 to 2017 but was dismissed by Uber after its background check on Tisdale showed she had a domestic violence charge, bad check writing conviction and previous driver’s license suspension. In 2020, Tisdale reapplied to become an Uber driver using a fake name and driver’s license. The court found that she did not qualify as an insured under the insurance policy and, even if she had, she would not have been a covered insured based on the policy’s exclusion for fraud and misrepresentation.

Brian T. Casey, Esq. - LOCKE LORD LLP, (404) 870-4638 , bcasey@lockelord.com

Category(s): Georgia - 07/24/2023

Georgia Insurance Commissioner Appoints First Executive Director for Georgia Access

On May 22, 2023, the Georgia Insurance Commissioner announced his appointment of Cheryl Gardner as the first Executive Director of Georgia’s new state-based health insurance exchange, Georgia Access, which will open for business for the 2024 plan year.  Mr. Gardner’s experience includes having served as the Chief Executive Officer of BeWellnm (New Mexico’s health insurance exchange), Executive Director of the Arkansas Health Insurance Marketplace and Director of Policy and Strategy for the Utah Health Exchange.

Brian T. Casey, Esq. - LOCKE LORD LLP, (404) 870-4638 , bcasey@lockelord.com

Category(s): Georgia - 07/24/2023

Georgia Insurance Commissioner’s Bulletin 23-EX-9 (FAQs for Certificates of Insurance)

On June 6, 2023, the Georgia Insurance Commissioner issued a new bulletin reminding insurance agents that Section 33-24-49.1 of the Georgia Insurance Code establishes a regulatory framework for the issuance of certificates of insurance for in-force insurance policies. The Bulletin contains a list of eighteen questions and the Georgia Insurance Department’s positional answers thereto.

Brian T. Casey, Esq. - LOCKE LORD LLP, (404) 870-4638 , bcasey@lockelord.com

Category(s): Georgia - 07/24/2023

Georgia’s Implied Waiver Doctrine Not a Means to Create Insurance Coverage

In a recent unpublished decision of the 11th Circuit Court of Appeals in Century Communities of Georgia LLC v. Selective Way Insurance Co., No. 19-14697 (11th Cir. 2023), it was held that the Georgia Supreme Court’s 2012 decision in Hoover v. Maxum Indemnity Co., 730 S.E.2d 413 (Ga. 2012), addressing that an insurer’s waiver of policy defenses does not apply to coverage defenses, i.e., whether a loss is potentially covered under a policy. Rather, under Hoover, only certain policy defenses, being whether a procedural condition of the insurance contract has been fulfilled, can be subject to a waiver.

Brian T. Casey, Esq. - LOCKE LORD LLP, (404) 870-4638 , bcasey@lockelord.com

Category(s): Georgia - 07/24/2023

Georgia’s New Commercial Financing Transactions Law may Impact Certain Premium Finance Loans

Following in the footsteps of California, New York, Utah and Virginia, Georgia’s Senate Bill 90, effective January 1, 2024, will impose for the protection of small commercial borrowers certain Truth-in-Lending like written disclosure requirements on lenders that make loans in “commercial financing transactions”, which generally are commercial loans having an original principal amount of less than $500,000, subject to certain exceptions based on either the licensed or regulated nature of the lender or the nature of the exempted loan. Because these exceptions do not include licensed insurance premium finance companies or insurance premium finance loans of any type, insurance premium finance loans for commercial lines insurance policies for financing annual premiums of less than $500,000 will likely be subject to the new regulatory disclosure requirements.

Brian T. Casey, Esq. - LOCKE LORD LLP, (404) 870-4638 , bcasey@lockelord.com

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