| Monday, January 18, 2016 |
| Finish Strong |
| I received this thought for the day last week from a young woman who has had her share of battles in her short 25 years of life and I was touched by the wisdom she shared with me, a person 30+ years her senior. I don’t know if she wrote this herself or received it from another source. Doesn’t matter. The fact that someone so young was touched by the words and wanted to share them with me was enough to make me pause and reflect on my own life. I hope you are impacted the same way. “The person who wins the race does not slow down, but speeds up, when nearing the end. When the challenges become more difficult, the winning response is to become more determined. Achievement belongs to those who finish strong. Achievement comes to those who give one hundred percent of the effort required, all the way to the finish line. What does it take to finish strong? It takes commitment and a positive sense of purpose every step of the way. Many people start strong, with lots of enthusiasm. Yet their own complaints and doubts along the way drain them, so that there’s nothing left as they’re nearing the goal. Winners finish strong because they value and appreciate the opportunity to make the effort. Winners finish strong because they carry a strong sense of positive purpose all the way to the finish line.”
Start strong and finish strong my friends. |
| Updates on Some Bills We Are Following This Session |
| HB 509-Transportation Network Companies by Rep. Matt Gaetz (R-Okaloosa) This bill, which provides requirements for operating as a transportation network company or operating as transportation network company driver and directs the DHSMV to issue permits, was heard by the House Economic Affairs Committee on Wednesday, January 13. After an hour of questioning by the committee, as well as public testimony largely in support of the bill, it passed with 13 yeas and 2 nays.
HB 577-Liability Insurance Coverage by Rep. Larry Lee Jr. (D-St. Lucie) This bill, which adds company employee adjusters to the list of persons who may respond to a claimant’s written request for information relating to liability insurance coverage, was scheduled in the House Regulatory Affairs on Thursday, January 14 and was temporarily postponed. 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, after being amended several times was heard by the Senate Appropriations Subcommittee on Transportation, Tourism, and Economic Development on Wednesday, January 13 passing unanimously with 9 yeas. |
| Some Victories on Horizon for Assignment of Benefits Reform |
| As the readers of our newsletter know (and anyone else we talk to), we continue the good fight toward the end of AOB abuse in Florida. We are excited and confident that this year may see some serious positive action in that fight via the legislative process with four filed bills in the hopper. Two of the bills, Senate Bill 596 by Senator Dorothy Hukill (R-Marion/Volusia/Lake) and House Bill 1097 by Representative Matt Caldwell (R-Lee) will limit what rights can be transferred in AOB contracts and give policyholders the ability to cancel an AOB agreement without penalty within three days. The bills will also require an all-caps notice printed in 14-point type on every AOB contract. We see this as a great move forward in stopping the lawsuit factory by changing the ability for lawyers to sue using AOB as a weapon against Florida’s citizens. The Senate bill is waiting to be heard by the Banking and Insurance, Judiciary, and Rules committees, while the House bill waits on committee assignments. The other two bills, House Bill 671 by Representative Doug Broxson (R-Okaloosa/Santa Rosa) and Senate Bill 1248 by Senator Miguel Diaz de la Portilla (R-Miami/Dade), are anti-kickback bills which will stop lawyers from giving kickbacks to plumbers, among others. The specific bill language gives regulators expanded authority to, “prohibit certain persons and entities from giving a referral fee, commission, bonus, kickback, or rebate, or engaging in any split fee arrangement, in connection with certain repair, mitigation, or restoration services…” The House bill is waiting to be heard by the Insurance and Banking Subcommittee, Government Operations Appropriations Subcommittee and the Regulatory Affairs Committee, while the Senate bill is waits to be heard in the Banking and Insurance, Appropriations Subcommittee on General Government, and Appropriations committees. To further encourage us, last Tuesday it was announced that Florida real estate, construction, and insurance groups are aggressively in the fight to push for AOB reform during this session. A 17-member group, the Consumer Protection Coalition, agrees AOB’s are being abused to extract more cash from insurance payouts and causing insurance premiums to skyrocket. Florida Chamber of Commerce President Mark Wilson stated, “Assignment of Benefits abuse is a huge threat to Florida’s families and businesses and must be stopped. Billboard trial lawyers and questionable vendors are taking advantage of AOB to essentially steal money from consumers and wreak havoc on our state’s insurance market. For the sake of attracting new businesses and jobs, we can’t let that happen.” We also heard from our friends at the Latin American Association of Insurance Agencies who shared that they hear on a daily basis that consumers are pressured to sign AOB forms and wish they had consulted their insurance company before signing. This battle has been long fought and we are very encouraged that this may be the year of something good for Florida citizens in the world of AOB abuse. |
| Watching and Waiting for Water Claim Data Call Results |
| LMA continues to stay on top of the situation for any signs of information from the OIR shedding light on the outcome of its data call concerning water claims experience.Company data was due to the Office by December 7th and we were hopeful a report would be out by this point in January. We and other stakeholders have expressed concern that a feature of the requested data might distort data analysis as well as any resulting report(s). Our concern is that the data call focused on closed claims only while a solid percentage of companies’ water related claims remain in an open status due to protracted litigation, litigation almost exclusively prompted by a fairly small number of plaintiffs bar attorneys. Although the OIR is aware of these concerns we will not know for certain how the issue has been addressed until we have benefit of the Office’s analysis and conclusions. You can count on us to follow this important issue and provide updates as developments occur. |
| National Flood Insurance Program Topic of Congressional Hearings |
| Last Tuesday, January 12, the National Housing and Insurance Subcommittee held a hearing entitled “Opportunities and Challenges Facing the National Flood Insurance Program.” The purpose of the hearing was to examine the National Flood Insurance Program (NFIP) and provide an opportunity to review the current government flood insurance model, the technological changes since 1968 that could improve the NFIP, and how the private sector could develop a private flood insurance market that compliments the current NFIP. Currently, the NFIP has about 5.3 million policies providing over $1.3 trillion in coverage in almost 22,000 communities in 56 jurisdictions that participate in the program. As of October 2015, the NFIP had an outstanding debt of $23 billion borrowed from the U.S. Treasury, with $7.425 billion remaining of its total temporary $30.425 billion Treasury borrowing authority.
In addition to the Housing and Insurance Committee meeting, there was a separate legislative hearing Wednesday on H.R. 2901, the Flood Insurance Market Parity and Modernization Act, introduced by Representatives Dennis Ross and Patrick Murphy on June 25, 2015. As you likely know, the bill amends the Flood Disaster Protection Act to clarify that flood insurance offered by a private carrier outside of the NFIP can satisfy the Act’s mandatory purchase requirement. H.R. 2901 defines acceptable private flood insurance as a policy providing flood insurance coverage that is issued by an insurance company that is licensed, admitted, or otherwise approved to engage in the business of insurance in the state or jurisdiction in which the insured property is located. Under H.R. 2901, an acceptable private flood insurance policy may also be issued by an insurance company that is eligible as a non-admitted insurer to provide insurance in the state or jurisdiction where the property to be insured is located. H.R. 2901, if enacted, would provide consumers with private sector alternatives to the NFIP and may reduce flood insurance premiums through greater competition.
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| Developing a Nose for Fraudulent Claims Using Predictive Modeling |
| In the past few days, Property Casualty 360 released an intriguing story about a worker’s compensation claim that was proven fraudulent when the claims adjuster noticed a broken chair in the employee’s home during the claims interview involving the employee claiming they hurt their back in a broken hotel room chair during a business trip. Predictive modeling in this case can track trends and patterns of active business travelers, or for that matter, inner city drivers when it comes to auto insurance claims. In fact, we are all too familiar with receiving calls from our credit card companies when predictive modeling reveals that credit card charges are not our particular charging pattern.
As the story shared, “…predictive modeling allows claims teams to act, the ability to identify potentially fraudulent cases throughout the claims process, maintaining and enabling the human element in claims adjusting, and strengthening an insurer’s anti-fraud reputation.” Speed of information and data about a claim are keys to resolving the claim and/or detecting unscrupulous claims activity. And many of our readers are experts in insurance fraud as part of Special Investigations Unit (SIU) teams who understand that gathering evidence when it is fresh, talking to witnesses with immediacy and jumping into a claim that is suspected to be fraudulent are all vital to ensuring claim dollars are not squandered. With respect to property insurance claims, understanding trends for unemployed policyholders for example can help detect if fire or flood claims are fraudulent as research indicates that those who are not in the workforce have a greater propensity to file a claim. Adjusters gain control over a claim as it progresses as it exposes fraud and clues to look closer! Please take a moment to review the article and share with us your thoughts. You can easily access it here: http://www.propertycasualty360.com/2016/01/11/how-predictive-modeling-is-flagging-fraudulent-cla |
| Fate of the Freighter El Faro Remains Under Active Investigation |
| One of the most thought-provoking maritime disasters in recent history took yet another turn during the first week of this month when the National Transportation Safety Board (NTSB) announced that it’s likely to conduct yet another search of the ocean bottom surrounding the wreck of the El Faro in search of the ship’s high mast. It is on the mast tower where the vessel’s “black box” data recorder is mounted. Early examination of the ship’s wreck site using the most advanced underwater robotic technology revealed that El Faro’s huge mast tower was missing and broken off by either rouge seas or the stress created by the ship’s rapid descent to the ocean floor.
Many readers will recall that the 790-foot freighter El Faro en-route from Jacksonville to Puerto Rico carrying a large cargo of new vehicles mysteriously sank this past October 1 just east of the Bahamas. Not one of the 33-member crew was ever rescued or recovered. The El Faro was in extremely heavy seas kicked up by Category 4 Hurricane Joaquin when it lost engine power, leaving the ship floundering in the path of an extremely dangerous hurricane. After an intensive search the ship’s remains were found just east of the Bahamas in 15,000 feet of water, one of the deepest points in the entire North Atlantic. Although visual examination of the wreck is helping provide some leads in determining the actual cause of the sinking, NTSB investigators are saying that recovery of the black box will lead to a much better understanding of what transpired causing the ship to slip beneath the waves so rapidly that crew nor captain had sufficient time to launch life rafts or put on individual survival suits. Also referred to as a voyage data recorder, a ship’s black box records the direction, speed, duration, and practically every aspect of a vessel’s navigation while also recording conversations occurring on the bridge between the captain and crew. Locating wreckage and especially voyage data recorders is extremely difficult in 15,000 feet of water; however, such feats have been accomplished before with at least two commercial jetliner black boxes recovered in 12,000 or more feet of water. The NTSB investigation into the catastrophe comes with a backdrop of numerous lawsuits filed by the families of the lost crew. One such lawsuit has been filed by the family of crewman Lonnie Jordan in Duval County Circuit Court seeking damages of $100 million. We will let you know how the NTSB’s investigation continues. |
| Top Ten World’s Largest Insurers by Net Premium in 2014 |
| According to a recent rating organization report, the world’s largest insurer as measured by 2014 net premiums written (NPW) is UnitedHealth Group Inc. United States based companies were among the top in assets and NPW. Berkshire Hathaway Inc., made the biggest jump from 14 to 9 and American International Group Inc., from 9 to 12. Also climbing in rank was health insurers Anthem Inc., Kaiser Foundation Group of Health Plans, and Aetna Inc., all seeing rapid gains in the U.S. health insurance market. France’s AXA S.A. kept its top spot among global insurers ranked by assets, but fell to No. 2 by NPW. China-based companies made gains in the ranking by NPW, however, Japan Post Insurance, continued its recent descent in the ranking, falling to number 5.
The top 10 global insurers ranked by non-banking assets are: 1. AXA S.A., France; 2. Allianz SE, Germany; 3.MetLife Inc., United States; 4. Prudential Financial Inc., United States; 5. Japan Post Insurance Co., Ltd., Japan; 6.Legal & General Group plc, United Kingdom; 7. Assicurazioni Generali S.p.A., Italy; 8. Prudential plc, United Kingdom; 9. Berkshire Hathaway Inc., United States; and, 10. Nippon Life Insurance Co., Japan. The top 10 global insurers ranked by NPW are: 1. UnitedHealth Group Inc., United States; 2. AXA S.A., France; 3. Allianz SE, Germany; 4. Assicurazioni Generali S.p.A., Italy; 5. Anthem Inc., United States; 6. China Life Insurance (Group) Co., China; 7. State Farm Group, United States; 8. Kaiser Foundation Group of Health Plans, United States; 9. Munich Reinsurance Co., Germany; and, 10. Aetna Inc., United States. |
| So Week 1 Came to an End |
| Week 1 of 2016 Session – check. As is often the case with the first week, things are beginning to percolate pretty well with several prominent bills already making their way through the process. Committee meetings were held and some bills were voted upon and passed to the next committee. With the colder weather in town, we wonder if our legislators will be more energized to get things done more quickly than during the months of April and May, when the warm sunshine beckons them outside. Maybe the colder weather will keep them inside the capitol building working some longer hours, rather than take that cold trek to their cars. Either way, these weeks will fly by as usual and we are counting on good, positive legislation to be the result of the hard work ahead. Regardless of the cold, heat, rain or snow – the LMA Team will be there, staying on top of the action.
As Always, Lisa and the LMA Team
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