Monday, November 2,  2015


The Juiciest Fruit


During a recent trip to central Florida I heard the most interesting phrase and it started me thinking about how we are all reaching for the best things in life. “Out on our edges is where growth happens AND where the juiciest fruit is”!  Thoughts of my amazing tangerine tree came to mind and how hard I work to reach the best and juiciest fruit it offers.  I know most of our readers are from Florida so you know all about Florida citrus and how the cool breezes of the Fall season mean yummy tangerines, oranges, and grapefruit. As a kid, it was so much fun to climb the trees in our backyard while my brother stood below me with the bucket to catch the fruit I picked and plopped down from the tree branches.  As an adult growing my own “backyard grove,” I have made sure to nurture the citrus trees and continue this memory of plucking from the tree limbs.  Alas, however, I find I am a bit too mature (old) to climb my trees any longer, so this weekend, I begged one of the neighborhood children to help me get the tons of tangerines from my enormous tree (I know the liability adjusters are cringing as I write this)! Christian is a wonderful boy and he wanted to pick every single tangerine…it was his goal to touch and connect with ALL the fruit. I kept saying, “Christian be careful” and “…those tangerines are too close to the edge of the branch and you mustn’t fall!” But, just as I did as a child, he kept inching out, all the while saying, “but out on the edges is where all the really cool leaves AND the yummiest tangerines are”!  I absolutely could not restrain the energy, drive and enthusiasm of this young man and we continued our adventure until we picked four very large bags of fruit. Such a life lesson and reminder to me that moving close to the edges of our lives, and most often way out of our comfort zones, is where growth happens and the juiciest fruit is found. When we take that risk, albeit with some wisdom, we get inspired, educated and connected to the best things of life. While I may continue to let Christian climb out on those tangerine limbs, I am absolutely going to look for the opportunity that is often put before me to reach for the best fruits of life, even if I have to stretch a little more than is comfortable.  I hope you will too.




Hurricane Patricia? Super Strong Storm Devastates Coast at Landfall


Many of you called and asked for an update on Hurricane Patricia and in a nutshell, Hurricane Patricia made landfall on the Pacific Coast of Mexico as a category-5 event. Patricia was a compact storm, and landed in an area of relatively low population density, but the reports we have are that impacts in the immediate landfall area are severe. However, the track and compact nature of Patricia appears to have spared Puerto Vallarta, Manzanillo and Guadalajara from the most severe impacts. Hurricane Patricia was the strongest hurricane observed in the Northeast Pacific or North Atlantic basins, with maximum sustained winds reaching 200 mph and a lowest ever record barometric pressure of 879 millibars. Just to provide a glimpse of the rarity of such events, Hurricane Camille which made landfall on August 17, 1969, was the second of three catastrophic Category 5 hurricanes to make landfall in the United States during the 20th century (the others being 1935’s Labor Day hurricane and 1992’s Hurricane Andrew). Camille had sustained Cat 5 winds of 175 mph. She flattened nearly everything along the coast of Mississippi, and caused additional flooding and deaths inland while crossing the Appalachian Mountains of Virginia. In total, Camille killed 259 people and caused $1.42 billion (1969 USD; $9.13 billion 2015 USD) in damages. We could say a lot more but we all know…we know…



Office of Insurance Regulation (OIR) to the Market:  Florida-based Insurance Companies are RESILIENT



OIR released the facts last week to refute the many naysayers, including the media, who contend Florida-based insurance companies are not financially solid. Saying that these companies are “resilient,” the OIR news release stated, “…  the Florida property insurance market can withstand significant catastrophic losses.” The 67 companies were tested to withstand a 1 in 100-year event, and repeats of the 1921 Tampa, 1947 Ft Lauderdale and the 2004/2005 storms.  All companies have the resources to keep their promises to their policyholders should those storm scenarios repeat themselves.  The Catastrophe Stress Test reviews the adequacy of reinsurance, capital and surplus of Florida-based property insurance companies and was enhanced to produce a more robust and strenuous testing process giving consumers the benefit of a new public report which reveals more information about the companies providing their homeowners coverage.  More on the stress test is at



Court Clearly Defers to Legislature to Find AOB Crisis Fix


This past Monday (10/26/15) Florida’s First District Court of Appeals (1st DCA) rendered yet another court case court case clearly indicating that the judicial system is not the branch of government responsible for leading the way in finding solutions to the on-going AOB crisis. In a decision rendered this past June, the 1st DCA sided with the Florida Office of Insurance Regulation, which had earlier disapproved requests from Security First Insurance Company (SFIC) to restrict policyholders’ ability to assign their policy rights without the insurer’s approval. Monday’s Court decision came as a result of a Motion for Rehearing filed by SFIC after receiving the adverse ruling in June.


Based upon a growing body of bad faith litigation and claims-related data, the insurance industry argues that assignment of benefits can lead to inflated costs and fraud, while water extraction and other post-loss remediation firms argue that the practice helps homeowners quickly hire contractors for emergency repairs. But the appeals court Monday said a “century of precedents” have determined that policyholders can make assignments without insurers’ consent.  In its ruling, the Court said, among other things, “We again conclude … that it is for the legislative branch to consider this public policy problem, not the courts, at this juncture”. As part of its Motion for Rehearing, SFIC also asked the 1st DCA to certify to the Florida Supreme Court as a question of great public importance, whether an insurance policy’s prohibition of an insured’s assignment of “any benefit or post-loss right” without the insurer’s consent is “void as contrary to the Florida Statutes or to this state’s ‘public policy”. But the Court declined to honor SFIC’s request to certify, effectively ending any hope for getting the specific issues in this case before the state’s highest court.  LMA remains all over the AOB issue and we will let you know if the legislature intends to follow the Court’s logic and address this critical issue during the upcoming 2016 Florida Legislative Session. Stay tuned!



AOB News Isn’t All Bad; Suit Against Insurer Thrown Out for Fraud


In an amazing turn of events, a Broward County Judge recently dismissed with prejudice a lawsuit filed by a water restoration firm against Florida Peninsula Insurance Company after the company convinced the Court it had been a victim of fraud at the hands of the water remediation firm. Yes, you heard right. The matter all started when on 9/10/2014, Florida Peninsula policyholder Curline Dixon supposedly suffered a roof and water loss at her home. According to the suit, Dixon thereafter hired a public adjuster who recommended to her that she hire State 2 State Restoration, Inc. to perform water extraction/remediation services. Dixon followed the advice and also executed an Assignment of Benefits (AOB) making State 2 State Restoration Assignee on the insurance claim. State 2 State later brought suit against Florida Peninsula for Breach of Contract over payments of amounts allegedly owned on the claim. As part of the process of preparing the case the insurer discovered information indicating that State 2 State may not have been completely straightforward in the claim and court dispute. Therefore, on 10/8/2015, Florida Peninsula filed with the Court a Motion to Dismiss with Prejudice alleging that State 2 State had fraudulently misrepresented the facts of the case in order to sustain its breach of contract lawsuit against the insurer. The insurer asserted in its pleading that the water extraction firm billed it for work never performed and doctored evidence in the case in order to prevent the Court from discovering the truth in the case.  Broward Judge Stephen J. Zaccor found the insurer’s allegations credible and on 10/13/2015, he signed an Order dismissing State 2 State’s lawsuit against the insurer with prejudice. This means that State 2 State is prohibited from filing this same suit in the future.  Please click HERE if you would like to read the Court’s Order. It’s an extremely interesting read!



Up To Our Eyebrows in Data Calls


Well, perhaps our article title above is a slight exaggeration. However, in our most recent newsletter edition (October 19) we did share with you the October 6th release of Insurance Consumer Advocate (ICA) Sha’ron James’ data call that, according to her cover letter, will “… be a targeted analysis of Florida claims data related to the topic of assignment of benefits (AOB) and gain a clear understanding of the impact this issue presents to the Florida consumer. The ICA data call was released to 15 companies based on these companies’ standings in 2013.


On Friday, 10/23/2015  the Office of Insurance Regulation issued its data call on the AOB issue and its requested data is due back to the Office by December 7th. In summary, the Office’s data call requests data fields information about each water/roof claim closed between 1/1/2010 and 9/30/2015 such as policy limits, characteristics of the house, square footage of the water damaged area, and the identity and contact information for water remediation firms, public adjusters and attorneys involved in each claim. Please click HERE to view a complete list of companies that received the OIR data call.



Tower Hill Select Obtains Sinkhole Defense Verdict


After a four-day trial in Hillsborough County before the Honorable Claudia Isom, the jury returned a verdict in favor of Tower Hill Select Insurance Company, finding that the Plaintiffs failed to prove that a direct physical loss occurred during the applicable policy period.  The jury did not have to reach the second question on the verdict form, which asked whether the Defendant had proved that the loss was not caused by sinkhole activity, but rather by excluded causes. The claim was initially reported in December 2010 by a public adjuster.  The insureds, Carlos and Carmen Perez, alleged that a sinkhole loss occurred in May of 2010.  Tower Hill retained BCI Scientists & Engineers (k/n/a AMEC), which conducted testing.  BCI concluded that a sinkhole loss had not occurred and identified several causes of damage, all of which were excluded.  The insureds hired the Freemon Law Firm, which filed a lawsuit for breach of contract. Plaintiffs hired N.S. Nettles & Associates who conducted testing during litigation, which revealed an 8-foot weight of rod underneath 20 feet of sediments described as very loose in one of the borings.  Experts agree this is a significant event and the Plaintiffs focused their case on this fact. At trial, Carmen Perez testified that the damage occurred during the policy period.  However, on cross-examination, lead trial attorney Jonathan Hall successfully had the witness admit that there was damage before the policy period started and obscured the witness’ testimony about how and when she noticed the damage.  This was the focus of Tower Hill’s closing argument. The Plaintiffs presented testimony from Sandy Nettles, P.G. and Justin James, P.E. about the data collected, focusing on the 8-foot weight of rod as substantial evidence of sinkhole activity.  During cross examination by Mr. Hall, both witnesses acknowledged that they could not establish that the weight of rod conditions were present before they conducted their tests after the policy period.  This was perhaps the most significant testimony of the trial in light of subsequent juror questions about the timing of the weight of rod in relation to the policy period. Tower Hill presented expert testimony from David Wilshaw, P.G. and Mark Hardy, P.E., both of whom explained the geological conditions and the causes of damage to the jury to refute the testimony of the Plaintiffs witnesses.



Insurers Win CAT Fund Data Call Rule Challenge 


In late August of this year the Florida Property & Casualty Association, Inc. filed a formal rule challenge before the state Division of Administrative Hearings to hopefully have an Administrative Law Judge (ALJ) agree that portions of the CAT Fund’s 2015 Insurer Reporting Requirements (Data Call Portion) Rule are invalid. The challenge to the rules was filed because the association’s insurer members believe that their policyholders’ street addresses constitute confidential and proprietary information that the CAT Fund should not require be reported. It is certainly the case that when any government entity in Florida requires regulated persons to submit any type of data or other information there must be in place a very clear and specific exemption in Florida’s public records law (Chapter 119, F.S.), otherwise, the submitted data or information can be obtained by anyone through a public records request. After considering the entire record and legal arguments made by both sides in the dispute, Administrative Law Judge Robert Meale issued a Final Order in the case on October 9, 2015.  The ruling  states in part, “Rule/form requiring insurers covered by Florida Hurricane Cat Fund to report street addresses of covered property is invalid for exceeding grant of rule-making authority and enlarging, modifying or contravening law implemented”. In more simple terms, Judge Meale ruled that the CAT Fund lacked the required very specific statutory authority to require by rule that policyholder street addresses be reported to the Fund. The ALJ’s Final Order makes for a very interesting read so click  HERE if you would like to study it in detail. Kudos to the Colodny Law Firm  for leading the legal fight opposing this CAT Fund initiative.  We will continue to monitor this situation and brief you on any developments that occur.



The Weeks Ahead


As we move into November and the coming holidays, we are preparing even more for the upcoming legislative season.  That is a big part of the work we do for our clients, colleagues, friends and all Floridians.  It is so important to the LMA Team to cover the issues that enhance and improve the continued growth and prosperity of the beautiful state we live in.  We are already in committee meetings, as you know, and are meeting with the folks that we have elected to do the “right thing” for Floridians and the nation as a whole.  We know that the actions of Florida reach far beyond the beautiful, pristine shorelines of our state.  Please continue to contact us with any concerns, thoughts, ideas, suggestions that will help us do a better job.  We can’t do the good work without you.


Until next time, reach for the best of life and stay in touch!


Lisa and the Team