Please call Lee from USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 833-USAssure at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com
Seeing no action on bills that would address Florida’s spiraling property insurance problems head-on, one state senator took a different route Thursday and proposed reducing insurers’ payments to the state’s hurricane catastrophe fund, a move he said could save policyholders as much as $1 billion a year.
Brandes
The amendment by Sen. Jeff Brandes, R-St. Petersburg, to Senate Bill 468 surprised some but sparked considerable discussion at the Senate Appropriations Committee meeting.
“We’ve only known about this for the last 24 hours,” said Gina Wilson, chief operating officer for the Florida Hurricane Catastrophe Fund. She urged Senators to wait on the amendment.
“This is a substantial reset to the cat fund,” Wilson said. “Because of the substantial impact on the cat fund, I think a deliberate and collaborative process would be important – to really understand the impact of what this could do to the fund.”
Brandes, who is serving in his last session, has been outspoken about the need to remedy some of the issues that are causing Florida property insurers to raise premiums, slash coverage and, in some cases, become insolvent. But a Senate bill that would address what insurers have said are some of the main culprits behind the crisis, including solicitation by roofers, out-of-control litigation costs, and the requirement that most homeowner policies must pay for full replacements on roofs, has not received a committee hearing in the 2022 session.
That has prompted Brandes to seek other approaches to try and reduce the escalating cost of property insurance.
“We have yet to see a bill that addresses or would make a real impact on Florida policyholders,” Brandes said in the meeting. “We have to do something.”
“I think he saw this as a good opportunity to get the discussion going,” said Paul Handerhan, president of the Federal Association for Insurance Reform, which supported the senator’s amendment.
Handerhan
The catastrophe fund provides a backstop or state-managed reinsurance for Florida insurers who face huge losses after hurricanes. Premiums are paid annually by insurers, and part of those premiums go into a rapid cash buildup factor. The factor allows quick access to cash that isn’t tied up in bonds, officials said.
Brandes’ amendment would have allowed insurers to buy into the cat fund at a lower level of losses – to pay lower premiums and access the cat fund reserves at a lower threshold than is now required. The amendment also would have required the fee for the rapid buildup factor only when the cat fund’s cash balance dips below $10 billion.
The cat fund now has about $11 billion in reserves and another $3.5 billion in “pre-event” bonds, Wilson explained. The fund by law is limited to about $17 billion in total reserves, but one recent report noted it now has a claims-paying capacity of more than $20 billion.
Brandes and others have argued that the excess capacity is not needed at this time, and that reducing the premiums from insurers would mean the savings could be passed on to consumers. The relief would amount to roughly $150 per year per residential policyholder, he said.
“The cat fund is in its best position ever and consumers are in their worst position ever,” Handerhan said.
Wilson, the cat fund COO, said that reducing premiums, lowering the loss threshold and putting an end to the rapid buildup funding could weaken the cat fund, forcing it to rely on reinsurance and capital investments from private sources. That happened the last time the loss threshold, also known as the retention level, was lowered in 2004, she noted.
Johnson
Carolyn Johnson, director of business economic development at the Florida Chamber of Commerce, said the Chamber is opposed to Brandes’ plan. The current structure keeps the cat fund viable and stable; without it, if the state were hit with major losses in a storm, all insurers, including commercial and auto insurers, could be stuck with higher assessment payments.
The Chamber is looking at other measures that would address the Florida insurance crisis, Johnson said.
Sen. Ben Albritton, R-Bartow, urged colleagues to consider forming a study commission or think tank that could analyze the issue, perhaps this summer.
In the end, Brandes withdrew his amendment, but said he may offer it again next week to the Senate Banking and Insurance Committee, where he is also a member.
The bill that Brandes was attempting to amend, Sen. Keith Perry’s SB 468, was approved Thursday by the Appropriations Committee by a vote of 18-0. The bill, which has already passed the Senate Banking and Insurance Committee, would make a number of technical and relatively minor changes to workers’ compensation and insurance regulations, including the cat fund.
Among other matters, it would direct the cat fund to reimburse for losses covered by lender-placed policies on homes, when the coverage amount differs from the amount under a lapsed policy; would exempt smaller businesses from workers’ compensation premium audits; and would allow Citizens Property Insurance Corp. to offer wind-only policies for condominiums.
The Appropriations Committee also approved SB 838, requested by the state’s fire marshal and chief financial officer. It would make fire investigators in the state eligible for a presumption that provides limited benefits for firefighters who are stricken with any of 21 types of cancers. The program is considered an alternative to workers’ compensation benefits.
The actions came one day after the Senate Banking and Insurance Committee approved another measure sponsored by Brandes. SB 186 could help stem the growth of the state-backed Citizens, an organization that was created to be an insurer of last resort but has ballooned in size in recent years.
The bill would make it harder for seasonal Florida residents, or those with second homes in the state, to qualify for continued Citizens’ coverage if another insurer will write the property at slightly higher or moderately higher premiums.
The bill also would allow more surplus lines insurers to participate in the Citizens take-out programs and would increase the maximum surcharge on policies if Citizens runs a deficit. The more policyholders Citizens has, the higher the surcharge, the bill stipulates.
The measure also would limit commissions that Citizens pays to producing agents.
Please call Lee from USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 833-USAssure at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com
A property insurer must give up its underwriting manuals in a claims dispute, a Florida appeals court said Wednesday.
In People’s Trust Insurance Co. vs. Theodore Foster, the 1st District Court of Appeals in Tallahassee upheld a trial court’s ruling that required the carrier to divulge its underwriting manuals, as requested by the homeowner. Although lawyers for the Deerfield Beach-based insurer argued that previous court rulings have “categorically” prohibited the discovery of manuals in breach-of-contract cases, the appeal judges disagreed.
“This sweeping characterization of the cases isn’t correct,” the court said.
“Although courts in a number of cases have quashed the premature discovery of insurers’ business practices, claims files, underwriting files, underwriting manuals, and the like in breach-of-contract actions, there is no categorical legal rule prohibiting discovery of underwriting manuals in breach of contract cases, especially if they are relevant,” Judge Timothy Osterhaus wrote in the opinion.
People’s Trust did not show that the circuit court had violated a clearly established principle of law, and trade-secret arguments were not presented, the judge wrote.
Foster, the policyholder, filed the breach-of-contract suit after People’s denied his claim that a water pipe had leaked and damaged his home. The insurer said the pipe damage predated the policy. The plaintiff, as part of the lawsuit, then requested People’s underwriting manuals, hoping to show information about the extent of its property inspections.
The circuit court granted Foster’s motion. People’s objected and filed the writ of certiorari with the 1st DCA.
The decision snaps something of a win streak for People’s in Florida’s appeals courts. The courts in 2021 ruled four times in favor of the insurer, which is one of the largest in Florida and boasts former state Insurance Commissioner Tom Gallagher as its chief operating officer.
Last month, the 3rd DCA found that homeowners were bound by their People’s policy, which requires the use of the insurer’s chosen contractors to make repairs.
Attorneys in the Foster case could not be reached for comment Wednesday.
Please call Lee from USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 833-USAssure at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com
Do you have a dangerous job, or a health condition? It’s going to cost you.
Do you spend your weekends doing extreme sports? ISTOCK
It sounds morbid, but when you’re shopping for a life insurance policy, insurers want to know the answer to one question: What’s your life expectancy?
That’s because life insurers take on a financial risk by covering you. The higher the chance of an insurer having to pay out your policy, the more you’ll pay — or the harder it will be to get coverage.
If you fall into one of these five groups, you may be deemed a high risk to insure.
1. You have a pre-existing health condition
“Think cancer, diabetes and any type of autoimmune disorder. Morbid obesity is a big risk, too,” says Jeremy Hallett, CEO of Quotacy, an online insurance brokerage.
However, if you’re managing your pre-existing condition well, insurers will take that into account when setting rates.NOW PLAYING: Schools Struggle With Omicron-Fueled Teacher Shortages00:0003:45https://imasdk.googleapis.com/js/core/bridge3.496.0_en.html#goog_1439761873https://imasdk.googleapis.com/js/core/bridge3.496.0_en.html#goog_589226747https://imasdk.googleapis.com/js/core/bridge3.496.0_en.html#goog_115335663https://imasdk.googleapis.com/js/core/bridge3.496.0_en.html#goog_589226748Visit our Video Center
The reason is simple, says Maureen Shaughnessy, research actuary at LIMRA, a life insurance trade organization.
“The more controlled your health risk is, the more favorable it is for your own mortality — which is good for everybody involved.”
2. You have a dangerous job
If you walk into a risky workplace every day, you can expect to be treated differently from someone with an office job.
The list of “dangerous” jobs is based on specialized tasks. A police officer who works a beat can typically access good rates, but a police officer on the bomb squad could get slapped with a higher premium, Hallett says.
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The guidelines for military members are a little blurry. If you’re in the military but not part of active-duty special operations forces, like Army Rangers or Navy SEALs, a broker can normally get you rates based on your health, Hallett explains. However, if you’re deployed to a dangerous part of the world, you probably won’t be approved for a policy until you’re back on U.S. shores, unless you go with an insurer that specifically caters to the military.
These jobs can also cause issues:
Piloting, including student pilots, helicopter pilots and crop dusters.
Car racing.
Certain types of scuba diving, such as wreck diving and cave diving.
The good news? If you leave your hazardous job, you can ask your insurer to re-evaluate your rates.
Do you spend your weekends doing extreme sports like car racing, piloting, skydiving, scuba diving or mountain climbing? Unfortunately, you’ll likely end up with higher life insurance rates.
“If you’re planning to do Everest or K2, they won’t write you until you’re back,”— Jeremy Hallett, CEO of Quotacy, an online insurance brokerage
Insurers will look at the level of risk you’re taking on and how often you participate in these activities.
“Taking your new Porsche POAHY, 2.41% to race around a track: fine. Simply climbing up a mountain: fine. But once you start to use ice picks and go 10,000, 12,000 feet: not fine. If you’re planning to do Everest or K2, they won’t write you until you’re back,” says Hallett.
To avoid committing fraud, it’s important to be upfront with your insurer during the application process. You must disclose your hazardous hobbies, as well as how many times a year you do them.
The type of drug and the length of time you’ve been clean come into play. Insurers carefully consider relapse rates, as well as the likelihood of contracting diseases through drug use, such as hepatitis C.
“Heroin, opioids and meth are problematic. Typically, you can’t get coverage for a year after drug treatment,” says Hallett.
As for alcohol treatment, insurers want to see you sober for one to two years before offering a lower rate.
A DUI is more than a blip on your driving record — it can also affect your ability to get low-cost life insurance.
If you got a DUI in the past year, you can expect a higher premium when you apply for life insurance. If you got multiple DUIs over five years ago, you’ll likely pay more than twice as much for coverage as someone with a clean driving record.
However, your insurer might not penalize you for just one DUI that happened five or more years ago.
Work with a life insurance broker or independent agent. These professionals partner with a bunch of life insurance companies, so they can help you navigate your options.
“You need a human being to take your profile to the market, shop it and come back to you with the best offer,” Hallett says.
As Shaughnessy says, every insurer has a different risk appetite. To make sure you’re getting the best deal, it’s worth comparing life insurance quotes.
Please call Lee from USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 833-USAssure at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com
If you want to shop and change Insurance, especially in South Florida, you had best try now or hope for year end to happen again??
Call today & tell your friends & neighbors quickly
Please call Lee from USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 833-USAssure at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com
The cost of homeowners insurance is on the rise, and not just because property values went up — almost 20% across the board — during last year’s homebuying frenzy. How high insurance costs may go is anybody’s guess at this time. But the Federal Emergency Management Agency is now operating under a new flood insurance rate structure that changes how it looks at risk. Furthermore, the growing number of natural disasters is forcing insurers to reevaluate their risk, with the end result almost assuredly being higher premiums. Weather is even starting to inform lending decisions, with the distinct possibility that lenders will charge more for loans in high-risk areas — or not write them at all. TOP VIDEOS × Weather events always are a threat. But during last year’s first nine months alone, the National Centers for Environmental Information counted a record 18 major storms, each with losses exceeding $1 billion. Such events are why, back in 1968, lawmakers created the National Flood Insurance Program to protect property owners from flood losses. The NFIP also protects taxpayers who fund the program by reducing Uncle Sam’s exposure. But almost annually, the NFIP well runs dry and requires additional appropriations from Congress, which, after years of inaction, has yet to reconstitute the program so it remains solvent. $2 for 2 months Subscribe for unlimited access to our website, app, eEdition and more CLAIM OFFER Speaking of dry, as of Dec. 1, the NCEI also says moderate to exceptional drought conditions cover nearly half the country. So more disasters unrelated to flooding are in the offing, too. To bolster its balance sheet, FEMA, which oversees the flood insurance program, has switched gears. Instead of rating risk solely on whether a house is located in a flood zone or not, the new formula looks at a variety of factors, including distance to a flood source, the severity and frequency of flooding, and property characteristics such as the cost to rebuild the property in the event of damage. The result: Some 3.3 million homeowners who currently have coverage will pay more, according to a study from Porch, a provider of software and services to several home service industries. The typical NFIP premium is $734 annually. FEMA predicts that 77% of those with flood insurance will see a price increase — a hike of about $88 a year for most, according to Porch’s calculations, but some by as much as $240 per year — with the remainder enjoying a lower premium. For those hit hardest, the increase will be spread over a few years. Granted, this only impacts owners who reside within a specified flood zone. But since floods can happen anywhere, anytime and for many reasons, it is a good idea to obtain coverage no matter where you live. RE|source Miami newsletter News, deals and trends for the Miami-area real estate industry.
Please call Lee from USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 833-USAssure at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com
The head of one of the larger property insurance companies in Florida said Friday that without a doubling of some of its rates, it will be forced to seek more capital from investment firms, a prospect that may not be sustainable in the long run.
At a rate hearing held by the Florida Office of Insurance Regulation, the deputy commissioner of property and casualty, Susanne Murphy, asked Southern Fidelity Insurance officials if the troubled company could survive.
“Is it accurate to say that without increases of the sort that you are seeking approval of today, that Southern Fidelity Insurance Co. would not be a going concern?” Murphy asked.
Susanne Murphy
Bryon Wells, the co-CEO of Clearwater-based Southern Fidelity, which is seeking increases of 85% and 111%, answered this way: “This rate increase is vital to the financial stability of this company as we move forward. Without these increases we would have to have substantial amounts of capital.”
The company, with almost 99,000 policyholders in Florida, has received several rate increases in the last two years, but now needs some of the largest ones ever, thanks to what insurers have called continuing losses and claims litigation costs in Florida.
Friday’s rate hearings, which also examined smaller rate requests from Cypress Property & Casualty and from Centauri Specialty Insurance, gave some insight into the financial problems facing some Florida-admitted carriers. The meetings also highlighted what the insurance industry has said is a vital need – more legislation that could help curb claims litigation and prevent more companies from becoming insolvent.
Southern Fidelity’s chief actuary, Missy Shelley, said that 2019 and 2021 legislative reform efforts have had only modest impacts on litigation costs. The frequency, severity and cost of represented claims more than tripled from 2017 to 2021, and did not slow down after the 2019 assignment-of-benefits legislation. The trendline for non-represented claims, though, has stayed almost flat, data from the carrier show.
But with little movement on insurance bills in the Florida Legislature this year, there is growing concern that further reform measures won’t get done.
While several insurance bills have been introduced, an omnibus bill drafted by the chairman of the Senate Banking and Insurance Committee has been touted as the best bet to curb solicitation by roofers, limit more roof-damage claims to actual cash value, and help put the brakes on the growth of the state-run Citizens Property Insurance and its under-priced polices.
But two weeks into the 2022 session, Sen. Jim Boyd’s Senate Bill 1728 has not made it to a committee hearing, sparking anguish from industry leaders. Although a Boyd staff member said that because the bill was filed just before the Jan. 11 deadline, it did not make it on the committee’s Jan. 18 agenda. But the measure also is missing from the committee meeting agenda for Tuesday, Jan. 25.
“He’s chairman of the committee. If the chairman isn’t putting his own bill on the agenda, it may not see any movement this year,” said Michael Carlson, president of the Personal Insurance Federation of Florida. “That’s disheartening.”
State Sen. Jeff Brandes, R-St. Petersburg, a frequent proponent for more reforms, said Friday that he, too, is concerned about the lack of action on the Senate bill.
“I truly hope there’s a grand plan with the House,” said Brandes, a member of the Banking and Insurance Committee.
Brandes has crafted his own bill, SB 186, that would help offset any future deficits that Citizens incurs by placing a surcharge on premiums. The measure also could help curtail Citizens’ growth by limiting policyholders’ ability to say no to take-out offers, and would allow more surplus lines carriers to participate in the Citizens take-out program.
That piece of legislation is scheduled to be discussed at Tuesday’s Senate Banking and Insurance Committee meeting.
But insurance industry advocates have said more is needed, and some are beginning to wonder why lawmakers and Gov. Ron DeSantis aren’t doing more to address the problems still facing Florida’s property insurance market.
“It’s been a comedy of apathy, trial bar influence and legislative malpractice that has led Florida to these 30% annual rate increases,” said Brandes, who is term-limited and will be out of the Legislature after this session.
Now, he added, “it’s a five-alarm fire but no one’s coming to the rescue.”
Some Florida Democrats have also taken notice of DeSantis’ apparent absence on the simmering property insurance issue. An outspoken former state representative, Sean Shaw, tweeted last week: “Manatees dying, insurance rates soaring, and no affordable housing…and you wonder why all the Gov talks about is race and the press,” according to FloridaPolitics.com.
A few legislators have said that lawmakers, facing redistricting, abortion and COVID issues, may have little appetite this year for more insurance reforms. SB 76, approved last spring, made needed changes but may take a while to show results, they have said.
But Brandes pointed out that the Legislature won’t meet again until March 2023, meaning that any legislation that gets passed then won’t take effect until summer of that year or January 2024.
“Many companies will not be able to survive until then,” he said.
Southern Fidelity could well be one of those companies, if regulators don’t approve the requested rate increases. The carrier, now part of Gulf & Atlantic Insurance Companies, shows in its third quarter financial report that its direct losses in the preceding 12 months were double those for the previous 12 months.
The company posted a $116 million net loss, preceded by a $119 million net loss in 2020. Southern maintained a statutory surplus of $45 million at the end of the quarter. But the company also has received more than $200 million in capital investment, much of it from HSCM Bermuda, part of Hudson Structure Capital Management, which took a majority stake in Gulf & Atlantic in 2020.
It’s not clear if Hudson will continue to support Southern Fidelity. Hudson’s founder and managing partner, Michael Millette, could not be reached for comment Friday.
It’s also uncertain when regulators will make a decision on the rate request. A spokesperson for the Florida Office of Insurance Regulation said the agency has no timeframe, but that the decision would come after the written comments period closes Feb. 4.
Please call Lee from USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 833-USAssure at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com
PROPERTY 1. Property Insurer Reimbursement SB 1058/HB 695by Sen. Hutson and Rep. StevensonThis bill is supported by OIR and passed its first two committees in both chambers in week 1. The bill authorizes the State Board of Administration (SBA) to provide Florida Hurricane Catastrophe Fund (Cat Fund) coverage to authorized insurers or Citizens Property Insurance Corporation (Citizens) for the policies of unsound insurers that Citizens or the authorized insurer assumes or otherwise provides coverage. The authorized insurer or Citizens may obtain Cat Fund coverage for such policies either through the authorized insurer’s or Citizens reimbursement contract with the Cat Fund, or by accepting an assignment of the unsound insurer’s contract with the Fund. The bill defines “unsound insurer” to mean an insurer determined by the Office of Insurance Regulation to be in unsound condition as defined s. 624.80(2), F.S., or placed in receivership under ch. 631, F.S. Under current law, these options for obtaining Cat Fund coverage are only available to Citizens and only apply to the policies of liquidated insurers. 2. Surplus Lines Tax on Flood Insurance Premiums HB 1149by Rep. GiallombardoThe bill provides that premiums charged for surplus lines coverages for peril of flood are not subject to specified premium receipts tax. The bill has been referred to three house committees but has not yet been heard. There is no Senate companion measure. 3. Property and Citizens Property Insurance Corporation SB 1728/HB 1307by Sen. Boyd and Rep. Gregory· Increases the citizens policyholder surcharge to:*15% of premium if citizens have fewer than 1 million policies.*20% if the citizens have between 1-1.5 million policies.· Requires the citizens Executive Director to meet minimum experience levels.· Increases the threshold a policyholder has to refuse a “take-out” offer to 20% greater than the renewed premium for comparable coverage. This applies to both personal and commercial lines.· Removes the eligibility for policyholder removed through an assumption agreement to remain in citizens.· Allows qualified surplus lines insurers to “take-out” citizens policies. Policies with replacement cost above $700,000 and a premium offer of 15% or less will no longer be eligible for citizens coverage. For policies with a replacement cost less than $700,000 remains eligible if it receives an offer of coverage from a surplus lines insurer.· Requires underwriting and claims files to be confidential by assuming carriers.· Makes technical changes to the citizens clearinghouse statute. Contained in Senate Version Only (House bill is limited to Citizens changes)· Requires roofers to include specific language on advertising about the insurance deductible and fraud. · Allows insurers to use roof surface reimbursement schedules and roof sublimits for personal lines. *Policies with roof schedules can depreciate roofs only up to 4% unless more is actuarially justified. *A roof reimbursement schedule can be included in the policy with a Notice of Change of Policy Terms.*Policies with roof schedules or roof sublimits must provide full replacement coverage for roofs less than 10 years old, total losses, and roof losses due to hurricanes. These bills have not yet been heard. 4. Domestic Surplus Lines Insurance SB 1402/HB 951by Sen. Burgess and Rep. GregoryThe Senate version was heard on the Banking and Insurance agenda on January 18 while the House version has not yet been heard.· Creates a definition of a “Domestic surplus lines insurer”· If a domestic insurer possesses a surplus of $15 million, they may after board approval and approval of OIR, be made eligible as domestic surplus lines insurer.· The domestic surplus lines insurer is subject to all financial and solvency requirements imposed upon domestic admitted insurers.· Surplus lines insurance policies issued by a domestic surplus lines insurer are exempt from all requirements relating to insurance rating and rating plans; policy forms; premiums charged to insureds, policy cancellation; nonrenewal; and renewal.· Policies issued by the domestic surplus lines insurer are subject to taxes assessed upon surplus lines policies, but exempt from other taxes levied upon domestic and foreign admitted insurers.· Policies are not subject to part II, III or V of chapter 631 5. Pet Insurance: Veterinary Telehealth SB 448/HB 723by Sen. Brodeur and Rep. BuchananThe House version has passed its first of two committee stops with unanimous support. The Senate version is scheduled to be heard on January 24. Current law defines a “veterinarian/client/patient relationship” (VCPR) as one in which a veterinarian has assumed responsibility for making medical judgments about the health of an animal and its need for medical treatment. Veterinarians are permitted to prescribe drugs in the course of veterinary practice; however, the veterinarian must be either personally acquainted with the keeping and caring of the animal and have recently seen the animal, or have made medically appropriate and timely visits to the premises where the animal is kept before prescribing drugs in the course of practice. The use of electronic communications to facilitate patient health care (telemedicine) is not addressed in the practice act and is not specifically prohibited or authorized in Florida. However, medical doctors may practice telemedicine in Florida and may establish a patient relationship with a patient evaluation via telemedicine under certain circumstances.· Establishes a framework for the practice of veterinary telemedicine.· Limits a veterinarian’s ability to prescribe controlled substances while practicing telemedicine to situations where:*The veterinarian has previously performed an in-person physical examination or made medically appropriate and timely visits to the premises where the animal is kept; or*The veterinarian is treating a terminal patient transferred to the veterinarian for hospice care by a veterinarian who previously performed an in-person physical examination of the patient and such veterinarian has reviewed the patient’s medical records.· Specifies that only Florida licensed veterinarians may practice veterinary telemedicine, and grants the Board jurisdiction over the practice of veterinary telemedicine.· Allows an animal control authority under the “indirect supervision” of a veterinarian to administer rabies vaccinations. AUTO1. PIP REPEAL SB 150/HB 1525by Sen. Burgess and Rep. GrallThe PIP repeal bills were filed in both chambers in week 1 after last year’s PIP repeal bill was vetoed by the Governor due, in part, to an OIR commissioned study received after Session ended that showed last year’s bill resulted in an overall price increase in premiums of 13.3% for all coverages. Neither bill has been heard.HB 1525 was filed by Rep. Erin Grall (R) who is the Chair of the House Judiciary Committee. SB 150 was filed by Sen. Danny Burgess (R), who is Chair of the Senate Judiciary Committee.The House and Senate PIP repeal bills pretty much line up – except for bad faith. The Senate bill contains the same bad faith language that was in the PIP repeal bill that passed last year. The Senate continues to push this language which is problematic for many insurers. The bad faith language in the Senate bill only applies to failure to settle auto claims and is found at lines 1771-2092.The House PIP repeal bill does not contain any bad faith reform which was the House starting position last year, though they eventually went to the Senate bad faith position in the final bill.The biggest change in the PIP bills this year is on medical payments: The bill that passed last year automatically included $10,000 of med pay benefits unless a signed rejection was received (i.e., opt out).This year, the House and Senate bills flip their med pay position and only require a mandatory offer of med pay (i.e., opt in). Opt in med pay has historically been opposed by the doctors, hospitals, and health insurers as a cost shift to them.A summary of the high points of this year’s PIP repeal bill in the House and Senate follows:· Repeals PIP and replace with mandatory BI coverage of $25K/$50k and $5k death benefit. PD coverage remains at $10k – contained in both House and Senate bills.· This is the same as the bill that passed last year.· Requires opt-in med: med pay offer of $5k and $10k (can offer any med pay amount over $5k); $0 deductible for med pay ($500 max deductible) – contained in both House and Senate bills.· This is basically the opposite of the bill that passed last year which has opt-out med pay.· Contains a limited “no pay no play” provision which requires a mandatory $10k set-off for recovery by an uninsured driver – – contained in both House and Senate bills.· This is the same as the bill that passed last year.· Contains bad faith reform (though problematic for many insurers) – only in Senate bill. 2. Public Records of Crash Reports and Traffic Citations SB 1614/HB 1121by Sen. Harrell and Rep. BrannanThe Senate version passed the Senate Transportation Committee on January 18. The House version has not yet been heard.· Written reports of crashes will be exempt under s. 119.07(1).· Expands who can receive the crash report to the Department of Health and any person or entity acting on behalf of a federal, state, or local governmental agency carrying out its functions.· Creates stricter and clearer guidelines for holding a crash report. · Exempts “driver information” on traffic citations from public records, creates a sunset of October 2, 2027.*Date of birth*Driver license number*Address excluding the zip code*Trailer tag numberThe bill also provides legislative intent language that both traffic citation and crash report information should not reveal personal information. 3. Driver History Records SB 1202 by Sen. BrodeurThis bill has no House companion which makes it unlikely to pass, but we will be monitoring the text of this language to see if it pops up in a larger House bill. The bill excludes speeding tickets from a driver’s history to be released to a 3rd party. The bill has not yet been heard. GENERAL INSURANCE1. INSURANCE OMNIBUS SB 468/HB 503by Sen. Perry and Rep. GregoryHB 503 by Representative Gregory passed its first of two committee stops in the House and its second committee stop in the Senate. One amendment was filed and adopted this week on both House and Senate bills which removed a provision regarding service of process. This was planned and the service of process language will be addressed in the CFOs agency bill. The bill has several components to it including the following:· Directs the Florida Hurricane Catastrophe Fund to provide reimbursement for a loss under collateral protection insurance (also known as lender-placed or force-placed insurance) when the coverage amount differs from the coverage amount under the lapsed policy if the homeowner received notice of the collateral protection insurance coverage amount, or the homeowner requested a different coverage amount from the collateral protection insurer.· Provides that current requirements under the Workers’ Compensation Law for annual, physical onsite payroll audits of employers in the construction class will only apply when the estimated annual premium is $10,000 or more.· Authorizes associations, trusts, and pools formed to provide self-insurance for public entities to use communications media technology to establish quorum and conduct public business.· Provides that an all-lines adjuster who is appointed and employed by an insurer’s affiliate may serve as a company employee adjuster for the purpose of adjusting claims.· Allows a residential property insurer’s rate filing to estimate projected hurricane losses by using a weighted or straight average of two or more models approved by the Florida Commission on Hurricane Loss Projection Methodology.· Authorizes an insurer to file a personal lines residential property insurance rating plan that provides premium discounts, credits, and other rate differentials based on windstorm construction standards developed by an independent, not-for-profit, scientific research organization.· Limits the requirement that an insurer provide a policyholder who has an automatic bank withdrawal agreement with the insurer with 15 days advance written notice of any increase in policy premiums. Instead, notice will only be required for premium increases that will result in an increase in the automatic withdrawal of more than $10 from the previous withdrawal amount.· Provides Citizens Property Insurance Corporation with discretion to offer wind-only policies to condominium associations when 50 percent or more of their units are rented more than eight times per year for a period of less than 30 days.· Eliminates a requirement that an insurer that provides electronic delivery of the insurance policy to a policyholder (or the person entitled to delivery) to also provide within the electronic transmission notice of the policyholder’s right to receive the policy via United States mail. The bill also eliminates a requirement that the insurer provide a paper copy of the policy to the insured upon his or her request.· Allows a policyholder to select a hurricane deductible greater than 10 percent, reject windstorm coverage, or reject contents coverage under a residential property insurance policy by typing the existing exclusionary statement language, instead of handwriting it.· Provides that s. 627.7152, F.S., governing assignment agreements, applies to instruments that assign or transfer post-loss benefits to a service provider that provides scopes of service or provides inspection services.· Provides that the term “assignment agreement” does not include an instrument by which a licensed public adjuster is compensated for public adjuster services.· Requires that an assignee provide the notice of intent to initiate litigation to the name and mailing address designated by the insurer in the policy forms if notice is sent by certified mail, return receipt requested, or to the e-mail address designated by the insurer in the policy forms if notice is sent by electronic delivery.· Requires that an automobile policy that does not provide coverage for bodily injury liability and property damage liability include notice accompanying the declarations page that the policy does not provide such coverages and does not comply with any financial responsibility laws. Such policies generally cover antique motor vehicles.· Exempts licensed personal lines and general lines agents from salesperson licensing requirements otherwise required to solicit, negotiate, advertise, or sell motor vehicle service agreements, home warranty contracts, and service agreement contracts. 2. Information Submitted by Insurers/Public Record Exemption SB 7016by Senate Banking and InsuranceThe Senate version passed in the Senate on January 19. We expect a House committee bill in Insurance and Banking to filed with this exemption sometime in the next few weeks. Continues the public records exemption for certain information submitted to the Department of Financial Services (DFS) related to an insurer’s anti-fraud plan or annual fraud report pursuant to s. 626.9891, F.S., by removing the October 2, 2022, repeal date.Currently, s. 626.9891, F.S., provides that certain information submitted to DFS related to an insurer’s anti-fraud plan or annual fraud report is exempt from s. 119.07(1), F.S., and article I, section 24 of the Florida Constitution.Pursuant to the Open Government Sunset Review (OGSR), the public records exemption is scheduled to repeal October 2, 2022, unless reenacted by the Legislature. Since the bill continues the exemption and does not expand the scope of the public records exemption, the bill requires a majority vote of each chamber for passage.
Please call Lee from USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 833-USAssure at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com
So before Troili goes full Jack Nicholson, let’s explain what’s happening here.
Last Summer, Washington Insurance Commissioner Mike Kreidler placed an emergency order stopping insurers from using credit scores to determine rates. He said the practice hurts people of color and would impact those who’ve taken a financial hit due to COVID.
“We’re very sensitive to the people who are being harmed. Let’s get this out there before any more people are hurt,” Kreidler said last March when he announced the rule.
The insurance lobby predicted the move would cause rates for many people with good credit to go up.
“There’s a high risk that the price of insurance will be going up because credit scores have been shown to be a way in which insurers can help reduce the cost of insurance for consumers,” said Kenton Brine, president of the Northwest Insurance Council.
But in October, a Thurston County judge struck down the Commissioners order.
However, Troili received this explanation for the higher rates emailed from his State Farm representative:
“… you were wanting some additional information about the WA legislation that banned the use of credit in insurance pricing. Insurance companies lobbied heavily against this, but unfortunately it still passed, so many people with good credit are seeing price increases.”
In fact, no law was passed on insurance credit scoring.
“Trying to flower up a rate increase when really they were going to increase the rates anyways. It’s likely they’re going to have to increase their rates because of market forces,” Troili says.
State Farm did not directly answer questions about the email. But they did say this in a statement:
“…we are making decisions on how to best serve our customers’ long-term needs. … Any changes will first be communicated to our agents so they are positioned to assist our customers during these uncertain times.”
Turning to the Northwest Insurance Council, President Kenton Brine says insurers are telling the truth. They set the rates under the rules that were in place at the time.
“So insurers are on pins and needles because that rule, we had anticipated based on the commissioner’s own comments, would have been adopted in late November or not later than the first of december to go into effect January first,” Brine says.
Two other issues: rate changes can take up to a month to kick in, and at the end of all of that Commissioner Kreidler could double back and try to make the credit scoring ban a permanent rule.
“Some insurers are concerned that if they put those kinds of rates back in play, they’ll be required to pull them back out again,” says Brine, “further frustrating, confusing and angering their customers.”
For those who have seen their rates go up because of the ban on the use of credit scores, we’ve learned that some companies have told the Insurance Commissioner’s office that they are going back to their old rates that include credit scoring.
That means those with good credit can shop around.
In the meantime, Kreidler is asking insurers to answer questions about their financials during the emergency rule, and how they communicated to their policyholders about it.
“That’s pretty straightforward,” Kreidler says.
He says only five percent have responded. And if more don’t…
“I’d have to say hey, you obviously don’t care so let’s go ahead with the rule,” Kreidler says.
For now, Eric Troili from Sedro-Woolley has one more request on behalf of people who have to pay higher rates when the court struck down Kreidler’s order.
“We should be getting a credit,” says Troili. “Credit me. Credit all of us.”
Here’s the list of insurers that have gone back to using credit scoring to calculate premiums:
American Commerce Insurance Company
Commerce West Insurance Company
Integon Preferred Insurance Company
Integon National Insurance Company
Progressive Casualty Insurance Company
Progressive Classic Insurance Company
Progressive Direct Insurance Company
Progressive Max Insurance Company
The Cincinnati Insurance Company
Allstate Vehicle and Property Insurance Company
Allstate Fire and Casualty Insurance Company
Commerce West Insurance Company
Stillwater Property and Casualty Ins Co
Stillwater Insurance Company
We’ve also learned there are at least four other credit scoring bills being proposed in the state legislature. Commissioner Kreidler is fighting all of them. We’ll be following their progress and will keep you updated.
Please call Lee from USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 833-USAssure at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com
Florida regulators will hold hearings Friday, Jan. 21, on another round of hefty rate hikes requested by property insurers facing losses in the state’s distressed property insurance market.
Southern Fidelity Insurance Co., which was approved for a 31% rate increase in 2020, has now requested an 84.5% spike on new and renewing homeowners multi-peril policies and a 111.1% increase for dwelling fire policies. Cypress Insurance Co. has requested a 26.3% on homeowners policies, and Centauri Insurance is proposing a 28.3% increase in dwelling fire policies.
Southern Fidelity is the largest and perhaps best-known of the three insurers, partly because its finances have been in the news in the last two years. The carrier merged operations with Capitol Preferred Insurance in 2020. As a condition of the merger, the Florida Office of Insurance Regulation required the firm to raise additional capital and pay off a loan from the state, according to news reports. Then, Hudson Structure Capital Management took a majority ownership in the insurer.
In April 2021, OIR allowed Southern Fidelity to non-renew 19,600 policies. Then, after its 2020 rate increase, the firm requested another hike, for 36%, in August 2021.
At the August hearing, OIR officials grilled Southern executives on the methodology used to justify the rate hike. More pointed questions are expected at Friday’s hearing.
The Southern Fidelity hearing begins at 8:30 a.m. Eastern time. Registration is required to see the virtual meeting, but audio of the hearing can be accessed by phone by calling (877) 309-2074; the access code is 632-387-746.
The Cypress Insurance rate hearing starts at noon. The phone number is (866) 901-6455; the access code is 855-674-386.
The Centauri Insurance hearing is set for 3 p.m. The phone number is (877) 309-2074; the access code is 781-641-602.
Please call Lee from USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 833-USAssure at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com
Committee Approves Florida Surplus Lines Bill; Stiffens Penalties for Adjusters
Florida took a step toward opening its distressed property insurance market to more carriers Tuesday when a Senate committee approved a bill that would let Florida-based surplus lines insurers sell surplus policies in Florida.
The Senate Banking and Insurance Committee also passed measures that would add stiffer penalties for some actions by public adjusters; would for the first time in years allow higher workers’ compensation reimbursement for physicians; and would add new requirements regarding insolvent insurance companies.
Senate Bill 1402, offered by Sen. Danny Burgess, R-Zephyrhills, would end the requirement that surplus lines carriers cannot be domiciled in Florida. If approved by the full Legislature and signed by the governor, the bill would allow many more carriers to write hard-to-place properties, but those companies would not be considered admitted carriers and would not be subject to state regulators’ review on rates.
Sen. Stewart
The surplus carriers also would not be backed by the Florida Insurance Guaranty Association if they become insolvent, potentially exposing policyholders to significant losses. Consumers would have to be informed of that when they purchase a surplus policy, the bill states.
“I definitely think that we need more options on insurance, and this is a really good bill,” said committee member, Sen. Linda Stewart, D-Orlando.
George Feijoo, a lobbyist who represents FCCI Insurance Group, a commercial carrier, argued that the bill would do little to fix the homeowners insurance crisis in Florida but would have other benefits. Under existing Florida law, if a surplus lines company wants to write in Florida, it must incorporate and be domiciled in another state. That practice is cumbersome to insurers. SB 1402 would also mean that domestic surplus lines would be regulated by Florida’s financial solvency laws, instead of those of other states, Feijoo said.
Burgess said at the meeting that he is still trying to understand why current Florida law is set that way, but he noted that 21 other states have passed similar measures that ease the restriction.
“Allowing domestic insurers to become eligible to transact surplus lines insurance may increase the number of property insurance policies written by surplus lines insurers,” a legislative staff analysis of the bill explained.
A similar bill is in the House, HB 951, by Rep. Tommy Gregory, R-Sarasota.
The committee, a key stop in the legislative process for insurance-related bills, also approved SB 1430, also sponsored by Burgess. The bill would make a number of technical changes to insolvency rules, including allowing insurers to make advance assessment payments to the Florida Insurance Guaranty Association, in quarterly installments.
Sen. Burgess
It also would require that the workers’ compensation rate-making organization for Florida, the National Council on Compensation Insurance, to include insolvent comp insurers’ loss experience data when recommending rates.
An amendment offered by Sen. Jeff Brandes, R-St. Petersburg, would also allow officers and directors of insolvent insurance companies to later be named officers or board members of other insurers, unless the Florida Office of Insurance Regulation finds that they had contributed to or caused the insolvency. The amendment and the bill passed the committee.
Brandes withdrew an amendment that would have required a post-mortem analysis on all insurers that go belly-up. He noted that when airplanes crash, the incident is subject to intense scrutiny by regulators. But when insurance carriers crash, no one examines the reasons. The concern Tuesday was which agency would be best suited to conduct the analysis.
The committee passed two other bills Tuesday. SB 1292, by Sen. Joe Gruters, R-Sarasota, would give regulators new powers to investigate and penalize errant insurers and public adjusters.
The bill would double financial penalties for adjusters who engage in deceptive practices during a state of emergency. And although the state Department of Financial Services already has subpoena power in some investigations, the bill would allow the department to fine insurers $2,000 per day when they fail to comply with investigations.
SB 1274 would ratify higher reimbursement rates for physicians and others who treat injured workers. The Florida Division of Workers’ Compensation and its reimbursement review group, known as the Three-Member Panel, have approved new reimbursement manuals in each of the past several years. But state law requires legislative review of any rule or regulation that would cost businesses above a certain amount.
Since 2016, lawmakers have declined to act on the improved reimbursements, leaving Florida workers’ comp doctors some of the lowest-paid in the nation, studies have shown. SB 1274, by Sen. Doug Broxson, R-Pensacola, passed the committee 9-0.
The much-anticipated property insurance bill that would tweak reforms started in 2019 and in 2021, is SB 1728, by Sen. Jim Boyd, R-Bradenton, chairman of the committee. That bill did not make it on the committee’s agenda for Tuesday, however, because it was filed late, just before the deadline last week, a Boyd staff member said.
The Home Insurance Guru 