Monday, October 19, 2015


A Better You and Me


More and more we are finding yummy books, articles and even poetry that we like to share with our friends and colleagues in the opening of our newsletter.  We hope you garner some wisdom, clarity or even just a smile when you open our newsletter to the first article.  Today we’re sharing a simple paragraph about being “better”.  Enjoy!


Don’t concern yourself with being better than everyone else. That will mainly get you resentment, disappointment, or both.  Focus instead on being better today than you were yesterday, on being even better tomorrow than you are today.  When you compare yourself to others, you’ll either end up being disappointed or you’ll end up being arrogant. Instead, compare yourself to yourself.  The important thing is to make progress in your own life. Upstaging someone else simply won’t bring you any true value. Improving yourself will. We all share certain things in common, and yet no two people are the same. There is no one who is better than you. And at the same time, you are better than no one else. You are unique.  Make the most of it.  Make it better and better each day. Stop worrying about everyone else and you’ll free up your energy to be the best you can be.


ICA Sha’ron James Issues AOB Data Call


On October 6, 2015, Insurance Consumer Advocate (ICA) Sha’ron James released a data call that, according to the 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. Although assignment of benefits is used in a variety of insurance related transactions, the purpose of this request is to aid my office in examining non-weather related water damage claims involving an assignment of benefits to a third party contractor for services.”  The data call was released to 15 companies based on these companies’ standing in 2013.  There has been discussion among several stakeholders who have concerns the data transmitted by the November 6 deadline to the ICA would not remain confidential as with data calls required by the Office of Insurance Regulation (OIR) who has statutory authority exempting the data from public records requirements. Please call or email me if I can provide further information or discussion.


The ICA data call has 27 fields spanning 5 years (2010-2015), including the following for all claims and separate reporting for non-weather water claims:


  • Number of policies, number of claims, amount of claims paid
  • Number of claims that had an Assignment of Benefits (AOB)
  • Number of claims referred for fraud activity to company’s special investigation unit or other fraud detection entity
  • Number of claims referred for investigation related to subrogation recovery
  • Number of claims that had litigation with the Insured or a Third Party
  • Number of claims where the Insured initiated litigation
  • Number of claims where a Third Party initiated litigation
  • Number of claims Involving a Public Adjuster, attorney, insured and/or contractor
  • Number of claims reported within 30 to 60, 61 to 90 and 91 or more days of loss
  • Number of claims with adjusting/other expenses of not more than $10,000, more than $25,000, etc.

The letter, certification statement, and data template for the AOB Data Call can be found on the ICA website, under  the  “Major Initiatives.” section:


Property & Casualty Insurance Fraud Task Force Meets for Quarterly Meeting



On October 13, we attended the quarterly meeting of CFO Atwater’s Property & Casualty Insurance Fraud Task force. One of the many interesting topics within the meeting was a presentation by Citizens claims executives Jay Adams and Joe Theobald. The 24-slide presentation, (which can be viewed HERE) crystallized Citizens’ challenges with water losses. The statistics in this slide deck were compelling and included in part, the following information:

* Citizens water losses represent 60% of total claims volume;

* The average claim for a water loss is higher than non-water      losses;

* There were 13,500 claims lawsuits in 2013 and 7,000 claims suits today;

* There is an inverse relationship to non-weather water claims when policy count is falling;

* 72% of water claims come from Dade, Broward and Palm Beach counties;

* When a water claim is filed, there are often two or three water claims included at one time. Filing multiple claims is the trend;

* 98% of the water claims reported with representation at first notice of loss come from the Dade, Broward and Palm Beach tri-county area;

* There is a ring of claim vendors particularly in south Florida (Miami, Dade, and Broward counties) that represent 43% of Citizens policyholders and represent 93% of all of Citizens water claims; and,

* In December 2014, of the 562 new suits received by Citizens that month, water losses represented 513 suits or 91%, and the top three counties represented 549 suits or 98%.


These slides speak for themselves. Citizens will be implementing a voluntary managed repair program patterned after their sinkhole repair program. In the coming months, they will work to mandate the repair program. There is a team of us working on demonstrating that these trends aren’t simply an industry issue but rather a consumer exploitation issue. Consumers are being used to participate in these fraudulent activities much like staged accidents in the auto insurance arena. If you have cases or consumers who will come forward and talk about this publicly, please let us know!


As Goes Florida, So Goes the Rest of the Country


We are always watching the action in the world of flood insurance and in doing so read an interesting article recently. You will agree with us, and will not be surprised, that once again our great state of Florida leads the nation in innovative thinking. Flood insurance reform has been a hot topic for quite a while now and of course, Florida is greatly impacted by flood insurance reform, or lack thereof. The recent article cited the Stronger Safer Florida Coalition’s encouragement of continued depopulation of Citizens, right-sizing the CAT Fund, and implementation of proper flood mitigation strategies. Many of you are familiar with the Coalition, but for those who are not, the Stronger Safer Florida is a nonpartisan coalition comprised of business, consumer and environmental groups from throughout Florida. The diverse membership reflects the broad support for changes to the state-run Citizens Property Insurance Corporation and the Florida Hurricane Catastrophe Fund. The coalition believes that by returning Citizens back to the insurer of last resort and “right-sizing” the Florida Hurricane Catastrophe Fund, we can better protect all Floridians as well as environmentally sensitive areas throughout the state. The article includes points that we know you, like us, will find very, very interesting. It’s no secret that Florida’s topography makes this one of the most flood-prone states in the nation. And sea level rise is only making this fact of Florida life more prevalent. Policymakers at all government levels should put aside the debate over climate change causes and instead focus on solutions for rising seas and more frequent and costly flooding. Reports have found Florida has more private property at risk from flooding linked to climate change than any other state with $152 billion in danger by the year 2050. Financial risk and potential environmental damage is why Stronger Safer Florida encourages the continued depopulating of the state-led Citizens Property Insurance Corporation, right-sizing of the Florida Hurricane Catastrophe Fund and implementation of proper flood mitigation strategies (all of which can protect consumers, businesses and environmentally sensitive coastal property). During the 2015 legislative session, state Sen. Jeff Brandes succeeded in passing flood insurance reform legislation that improves coastal development standards and sets up a flood insurance program mirroring the National Flood Insurance Program but offering greater flexibility of coverage and shifting the burden of claims paying to the private market where it can be more appropriately underwritten. Now Florida Congressmen Patrick Murphy and Dennis Ross have filed the Flood Insurance Market Parity and Modernization Act, which allows for customizable private flood insurance options and more consumer choice. The Florida Wildlife Federation applauds this idea as long as a reliance on the private market is maintained and building in high risk, low-lying flood zones is discouraged. As the effects of rising seas and flooding intensify, we will need to take steps to mitigate the problems before they cripple our economy. Major flood claims could have the same effect on Florida’s consumers as a season of hurricanes. It’s something that local and state leaders must address. The Ross-Murphy proposal gives more power to state insurance agencies and more choice for consumers. It’s a Florida solution that can benefit the whole country.


Insurance Consumer Advocate (ICA) holds workshop: “Finding a Balanced Approach to Unexpected Medical Expenses”


The ICA held a workshop on October 15, 2015, to explore what happens when consumers receive medical bills unexpectedly after being treated in a hospital or other medical setting, often called Balanced Billing.  The debate about balanced billing has been one for over 30 years with the advent of HMOs and other managed care type plans.  Speakers included the Department of Financial Services’ (DFS) Consumer Services Division Director Tasha Carter who provided statistics and comments on the calls for help her division receives when consumers find surprise bills in their mail boxes from out of network providers that they didn’t know had provided medical services.  Carter cited an American Journal of Medicine study that showed 30 years ago -8% of bankruptcy filings were related to medical fee challenges and in 2014 the figure is now 62% of that percentage, about 75% of those who filed bankruptcy had health insurance.  Her office, since 2011, has received only 530 calls/requests for help however. Toma Wilkerson,  DFS Division Director of Insurer Rehabilitation & Liquidation testified that 6 million of Florida’s 20 million consumers are members of HMOs and 3.7 million are in a Medicare or Medicaid HMO. While Section 631.3154, F.S. holds HMO subscribers harmless with respect to balance billing, Toma stressed that when an HMO fails and there have been 14 HMOs fail since 1997, even though the law prohibits balance billing, doctors send the bills to the subscribers anyway. Representatives from the America’s Health Insurance Plans (AHIP) provided a link to their recent report entitled, ” Charges Billed by Out-of-Network Providers: Implications for Affordability” (which can be found at Dr. Jack Hoadley, Ph.D. from Georgetown University’s Health Policy Institute provided a state by state regulatory scenario with respect to this issue.


Other speakers included the hospital and medical association representatives, Emergency Physician Association and members of the public.   The health plans, while wanting to be sure consumers are not harmed, do not want to be responsible for paying the balance of a bill for out of network providers because they do not believe they can secure the rate increases needed to pay those bills.  The physician providers want someone to pay their bills and the hospitals will tend to side with the  physician providers.  Because this issue is wrapped up in Governor Scott’s mission to force hospitals to disclose their fees, balance billing will be a hot topic this coming session.  The ICA’s two platforms for the 2016 session involves finding solutions to balance billing problems consumers face and solving the consumer exploitation of the abuse of assignment of benefits in the property and casualty arena.  The ICA has been in office less than a month and has been extremely engaged.  Please keep your eye out on the ICA initiatives website at


Special Insurers Seen As Takeover Targets


Standard & Poors sees a number of specialty insurers as potential takeover targets by both rival carriers and investors seeking to expand in the segment, thanks to stellar operating performance versus the P/C industry as a whole. The ratings entity said in a new report that 13 specialty insurers – Allied World Assurance Co. Holdings AG, American Financial Group Inc., Arch Capital Group, Argo Group International Holdings Ltd., AXIS Capital Holdings Ltd., HCC Insurance Holdings Inc., Ironshore, Inc., Markel Corp., Navigators Group. Inc., OneBeacon Insurance Group Ltd., RLI Corp., RSUI Group Inc. and W.R. Berkley Corp. – in aggregate have “significantly outperformed the U.S. P/C industry” in terms of underwriting. Most scored between A- and A+ in terms of financial strength ratings, save for HCC Insurance and its AA rating. Ironshore is not rated. Two – Ironshore and HCC Insurance – agreed to be acquired in just the last six months. AXIS was in a merger deal with PartnerRe before Italian investment firm EXOR swooped in to acquire PartnerRe. S&P noted, insurers such as AIG, Nationwide and ACE dominate specialty lines through their affiliates, which are then part of inter-company pooling arrangements with much larger standard lines companies. Because of this, S&P said it is “impossible to assess the stand-alone operating performance of these units” so they’re not included in the roundup. With growth slowing in the overall industry, specialty carriers and their rapid growth trajectory makes them desirable, S&P said. A big selling point, according to S&P, is that their strong underwriting profitability has left these carriers with “more favorable assessments of operating performance, a key component of business risk profile under our insurer rating methodology.” Standard & Poor said that specialty insurers are hard to define, but that they have some common traits that make them attractive, such as their ability to quickly enter a line where they see profit potential and then pulling back when that niche market gets too competitive. Using 2014 data, S&P ranks W.R. Berkley Corp. highest among specialty insurers in terms of gross premiums written ($7 billion). HCC scores number one in terms of average combined ratio (83.7), and RLI gets the top slot in terms of average return on revenue (24.3 percent).


Florida Commissioner McCarty Asks FEMA for NFIP Rate Data by Dec. 15


Florida Insurance Commissioner Kevin M. McCarty has followed through on his promise to State Senator Jeff Brandes to investigate the National Flood Insurance Program’s (NFIP) rating practices of Florida insureds. In an Oct. 2 letter to Craig Fugate, administrator of the Federal Emergency Management Agency (FEMA), McCarty requested that FEMA “work collaboratively with the Florida Office of Insurance Regulation by providing access to ratemaking data and supplemental information.” McCarty says access to such data will facilitate the review of how NFIP determines its rates. The letter to FEMA includes a supplemental document entitled the “NFIP Rate Support Data Request”, which outlines the basic rate-making data the Office is requesting by December 15, 2015. “As the nation’s leading provider of flood insurance in the United States, we believe that the NFIP’s data set is the most complete and robust data set available. We would therefore very much appreciate if the NFIP would provide the Office with the information requested in the attached document,” McCarty wrote. The information requested will also enable the Office to address the concerns raised by Senator Brandes on behalf of his constituents in a letter sent to the Commissioner on August 12, a statement from FLOIR said. In his letter to McCarty, Brandes expressed concern over rising flood insurance rates in the state of Florida, saying “Florida is facing a growing flood insurance crisis” and that Floridians “cannot wait on Washington to institute the federal reforms necessary to unleash the competitive forces of the private market.” Branded said although there are jurisdictional limitations on FLOIR in regulating NFIP rates, “the input of our state regulator on this matter is critically important to the success of federal reform initiatives.” McCarty responded in a letter on Aug. 14 that NFIP’s rates for Florida may be “unfairly discriminatory” and that his office would ask for the actuarial study, including data and models used to determine rates in the state, from FEMA for further examination. “We share your concern about the need for transparency in the ratemaking process utilized by the Federal Emergency Management Agency for the National Flood Insurance Program (NFIP), and we have publicly expressed those concerns,” McCarty said in his Aug. 14 letter to Brandes. McCarty said Florida’s NFIP experience suggests that the flood loss ratio from 1978-2012 was 28.3 percent – which is not an alarming loss ratio and does not seem to suggest that dramatic increases are needed for Florida risks. “The Office can request pertinent data and perform a review of NFIP rates based on Florida law if we can acquire the necessary data from NFIP,” McCarty said at the time.


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. We will continue to monitor this situation and brief you on any developments that occur.



Legislative Happenings


As the opening of the 2016 legislative session fast approaches, lawmakers are continuing to grapple  with the senatorial redistricting mandate.  In combination with the upcoming legislative committee meetings, the Florida Legislature will convene a Special Session pursuant to Article III, Section (3)(c), Florida Constitution, and Section 11.011, Florida Statutes, at the Capitol in Tallahassee, Florida, beginning at 12 p.m. on Monday, October 19 running through November 6.  The sole purpose of the Special Session is to produce a joint resolution to address redrawing of the Senate districts.

Naturally LMA  will be in the halls and watching the legislature’s every move. If you’d like to follow the activities, check out the meeting schedules at the following sites:





A Better You and Me Can Make Our World a Better Place


So, before you move this newsletter to your “save LMA newsletter” file, or heaven forbid, delete it (don’t tell us if you do), take another moment and read our opening article again slowly. And as you do, contemplate the areas of your life where a greater focus and attention might help all of us make the world a better place, because you and I are better people. Then, of course, pay it forward always.
All The Best,

Lisa and the LMA Team