We are receiving more and more input from Floridians and their insurers on the AOB situation in Florida.  We are listening and carefully watching the debate in the legislature. From what we see, it looks our legislature is looking at curbing assignment of benefits abuse and not necessarily eliminating assignments.  We certainly don’t want see our fellow Floridians lose any rights during the claims process but the abuse of the AOB is what has our hair on fire and has fueled the fight.  We reported last week on the bills that are in play, one being SB 596 by Senator Dorothy Hukill (R-Marion/Volusia/Lake) that doesn’t eliminate an assignment but attempts to stop the lawsuit factories that she claims are prevalent.  Of course, the Citizens Property Insurance Corporation is in the heat of this issue and last week, Chris Gardner, Chairman of the Board of Governors, wrote an article regarding how water loss claims are “changing the math” for the Corporation.  We offer a few excerpts from his article:

“Most Citizens policyholders in Florida will see rate reductions in 2016 under a slate of recommendations approved in August by the Office of Insurance Regulation, which take into account historically inexpensive reinsurance, a stronger Citizens and a reinvigorated private market. Not so in South Florida, where average homeowners’ rates are expected to rise by 6.2 percent. That increase, OIR has determined, is directly linked to an alarming spike in non-catastrophic losses, especially water loss claims. Unlike wind coverage rates, which depend on scientific models, determining rates for non-catastrophic losses is relatively straightforward. Simply put, what is predicted to be paid out to some policyholders in non-weather claims must be paid for by all policyholders in each region via higher rates established by OIR for Citizens each year. That simple math equation is now hurting our South Florida policyholders. The amount paid for water losses in the average annual South Florida premium has more than doubled from $664 in 2012 to $1,452 in 2014. In the past 18 months, the percentage of tri-county customers filing water claims has doubled to more than 16 percent. The number of policyholders filing water claims in other parts of the state has tripled to 9 percent.” To learn more about efforts being made by CPIC, you can access the video links from their December board meeting and meeting of the actuarial and underwriting committee here.

There are many faces of AOB like the case of the Clermont retired couple who expressed shock and dismay during their recorded statement when they found out that the roofing company was suing their insurance company…the policyholders were crying on the phone begging to find ways to stop the lawsuit and found out they couldn’t unless the roofing company rescinded the AOB they signed.  There’s the case of a widow in South Florida who had a Glades plug in fragrance catch fire and burn a hole in her wood floor, about  2″x2″ and the restoration company charged $21,000 to get the smoke out of her house with a $1400 check processing fee!

We know all too well that there are very strong positions on the AOB problems we face and the debates reflect those positions.  We are on the side of making Florida the best place to live and are very hopeful that our lawmakers will carefully and with the greatest knowledge of the real problems, face this important problem and make good legislative decisions during this session.

Center of the University of Pennsylvania, and is a compilation of the assessment of 29 global risks of impact and likelihood over a 10-year time line.

* Chiefly, the report finds an increased likelihood of all risks – environmental, geopolitical, societal, economic, and technological, looks set to shape the global agenda in the coming year.

* Failure of climate-change mitigation and adaptation is the number one global risk in terms of impact.

* Large-scale involuntary migration tops the list of risks in terms of likelihood and is the fastest rising in terms of both impact and likelihood.

* Cyber attacks are now considered the greatest risk to doing business in North America.

In addition to emphasizing risks, the report also focuses on potential solutions as well as reviewing initiatives that have been employed across the public, private and governmental domains worldwide.   More concentration has been devoted to environmental risks.  According to Howard  Kunreuther, co-director of Wharton Management

Risk Center and an academic advisor for GRR 2016,  “this year’s Global Risks Report highlights the importance of the Paris Agreement on climate change as an historic turning point with the need for constructing implementable plans to significantly reduce carbon emissions.  To encourage developing countries to invest in energy efficient technologies, low- or no-interest long-term loans could be provided through international organizations. Energy efficient technologies such as wind and solar are now cost-efficient relative to standard technologies so they are likely to be utilized by businesses and households.”

Climate change is also a weighty issue affecting other risks, but is only one of many other interconnections, which are constantly evolving and creating unpredictable impacts, requiring constant adaptation.  While techno- logical crises are not yet having a systemic impact, they have a very high probable risk, which may not have yet been fully priced by experts.  At least eight countries have cyber attacks as their primary risk and feature among the top five risks in 27 economies.   This is an indicator of the extent that the threat has affected business in many countries.  The Global Risks Interconnections Map is a strong visual outlining risks in 5 categories, and the Risks-Trends Interconnections Map depicts how global trends are connected.  These can be accessed via the main page on the report.

Marsh & McLennan Companies and Zurich Insurance Group, other academic advisers (Oxford University’sMartin School and the National University of Singapore) and the advisory board of the Global Risks Report 2016 also supported the development of the report.    For more information please visit the following links:

* Read the Report: http://reports.weforum.org/global-risks-2016/

* Executive Summary: http://reports.weforum.org/global-risks-2016/executive-summary/

* Watch the Global Risks 2016 introductory video at

http://reports.weforum.org/global-risks-2016/video/

Burning desire. Financially strapped Mark Leonard botched an insurance arson of his Indianapolis home. A leaking gas line blew up the place, killed two next-door neighbors and leveled much of the neighborhood.

Puppy plot. Nearly 30 puppies cringed in their cages as Gloria Lee’s henchman spread gasoline around her Las Vegas pet shop for an insurance arson. Incredibly, Lee’s own store security cameras filmed her executing this scheme. The dogs were saved.

Dollars & dents. One of America’s biggest-ever staged crash rings stole money in the New York City area. Crash kingpin Mikhail Zemlyansky churned out $279 million in false injury claims from setup wrecks. He bribed doctors to make false diagnoses.

Spineless spinal con. Dr. Aria Sabit sliced open and fused spines of healthy patients to try and steal $32 million of insurance money. Some of the Detroit-area man’s patients were disfigured and permanently injured.

Unsettling settlements. Manhattan attorney Steven Krawitz stole $1.9 million of insurance settlements from nearly 50 clients. Most received no money; some were destitute. Krawitz even stole from a 96-year-old great-grandmother.

Unhealthy health plans. At least 12,000 consumers bought fake health coverage William Worthy sold throughout the U.S. in a $14-million theft. Many of theSouth Carolina man’s victims had thousands of dollars in unpaid hospital bills.

Police raid. NYPD officer Jose Urena became lawless. He kept buying Mercedes he couldn’t afford. He then burned, vandalized or crashed them for false insurance claims – and to escape car payments.

Lifeless life plot. Debt-ridden Jose Lantigua bribed corrupt officials to declare he’d died and was cremated inVenezuela. The Jacksonville, Florida man tried to steal more than $9 million in life insurance. Except Lantigua looked nothing like the U.S. man whose identity he stole.

Deadly life insurance. Pierre Collins beat his son Barway to death, duct-taped his body and threw him into aMinneapolis river for a mere $50,000 in life insurance.

It’s all horrifying and disgusting for sure.  We will never give up this fight against fraud and know you will continue to stand strong alongside us.

SB 1118-Transportation Network Company Insurance by Sen. David Simmons (R-Volusia/Seminole). This bill requires a transportation network company driver or such company on the driver’s behalf, or a combination of the two, to maintain primary automobile insurance issued by specified insurers with certain coverages in specified amounts during certain time frames; requires a transportation network company driver to carry proof of certain insurance coverage at all times during his or her use of a personal vehicle and to disclose specified information in the event of an accident; requires a transportation network company to make certain disclosures to transportation network company drivers.  The bill was passed last Tuesday, January 19 by the Senate Banking and Insurance with 10 yeas and 0 nays.  The next stop for this bill is the Senate Judiciary Committee.

HB 577-Liability Insurance Coverage by Rep. Larry Lee Jr. (D-St. Lucie)/SB 774 by Sen Bill Montford (D-Leon, surrounding counties).  Both of these bills passed their first committee.  These bills add to Section 627.4137, Florida Statutes, that company employee adjusters will be one of those on the list of persons who may respond to a claimant’s written request for information relating to liability insurance coverage when a lawsuit occurs.  The current law requires the following to be produced, under penalties of perjury, in the event of a lawsuit: The name of the insurer, copy of the policy and name of each insured; liability coverage limits; and a statement of any policy or coverage defense which such insurer reasonably believes is available to such insurer at the time of filing such statement.  One would think this bill would be perfunctory but as in last week’s Senate Banking and Insurance Committee meeting, Senator Montford agreed to work with all parties to make this one page bill better!  Happy to discuss with each of you what our thoughts are about why this seemingly noncontroversial bill is controversial!

SB 584-Flood Insurance by Sen. Jeff Brandes (R-Hillsborough/Pinellas). This bill, which authorizes the Division of Emergency Management to administer a matching grant program to provide up to $50 million in technical and financial assistance to local governments to implement certain flood risk reduction policies and projects, and authorizes the Florida Communities Trust to undertake, coordinate, or fund flood mitigation projects and to acquire and dispose of real and personal property or specified interest when necessary or appropriate to reduce flood hazards waits to be put on the Senate Appropriations Committee agenda.

According to proponents, the measure would simply require life insurance companies to consult the Social Security Administration’s Death Master File to verify the status of their life insurance policies. Examinations conducted since 2008 by the Office of Insurance Regulation (OIR) and other states’ insurance regulators have shown that many life insurance companies verify the death of a customer in order to halt annuity payments but not for the purposes of paying out life insurance benefits. By not doing so, beneficiaries are unable to collect death benefits unless and until they can locate the policy paperwork, of which they may not be aware, and present a death certificate to the company. The bill also states that life insurance companies must turn unpaid policy benefits over to Department of Financial Services as unclaimed property after a specified period of time. During Tuesday’s committee meeting, however, two industry lobbyists representing a large segment of Florida’s life insurance industry raised concerns about the bill. Those concerns included the potential implementation costs associated with the retroactive application of the requirement to check the Death Master Index File, the measure’s break from the 150 year legal requirement that claimants submit bona fide proof of an insured’s death in order to substantiate a claim as well as an assertion that the industry should perhaps be entitled to some degree of credit for having a business model that works in the vast majority of circumstances. It became quickly apparent from follow-up comments by CFO Atwater and the bill’s sponsor that the industry’s concerns were found to be particularly displeasing. This bill will likely create some degree of controversy as it moves forward in the committee process, and LMA will monitor its progress and provide updates along the way.  Stay tuned!

Always in the Halls….Lisa and the Team