Two Weeks Left and Budget Consensus May Be in Trouble
Two weeks left and although lots of bills are moving very fast now, the budget is stuck. Last week the House passed a $76.2 billion balanced budget that funds Florida’s top priorities, and with Florida’s economy continuing to improve, there is a budget surplus. The House budget did not include federal funding to cover additional indigent care under Florida’s Medicaid program. There are approximately 800,000 adults and children who need healthcare who currently are unable to access Medicaid. The Senate passed their budget with intent to draw down additional federal Medicaid funding called “Medicaid Expansion.” We clearly see that this debate is overshadowing most public policy issues in the Capitol right now and the legislative leadership is saying different things. House Speaker Steve Crisafulli (R-Brevard) said last week, “Each and every year when we come up here, we have disagreements with our partners in the Senate and they get resolved.” But this is different it appears. The Speaker continued with, “This affects Florida forever. When you go into a federal program like that, you will soon find out what it means to be married to Washington. As we’ve seen with LIP, that’s not necessarily a good thing.”
Senate President Andy Gardiner (R-Orlando) says he isn’t bothered by the possibility of a special session. “If it means we extend, we extend. If it means we come back in a month, a lot of us have been here a long time, that’s ok. What’s important is we get it done right”, said President Gardiner.
So does this mean a special session will be called? If the House and Senate can’t work this out, it certainly does. We are right on top of this and will keep you informed on the one item the legislators MUST agree upon. In the meantime, here is what happened last week to the bills we have been following:
Legislative Activity Updates
Property & Casualty Insurance
(AKA Insurance Omnibus Bill)
CS/SB 258 by Sen. Jeff Brandes (R-Pinellas) and CS/HB 165 by Rep. David Santiago (R-Volusia)
As we previously reported, Sen. Brandes’ bill CS/SB 258 makes various changes to statutes relating to property and casualty insurance. Current law provides that the use of a single United States Postal Service zip code as a rating territory for auto insurance is unfairly discriminatory. This bill allows the use of a single zip code as a rating territory if the territory incorporates sufficient actual or expected loss and loss adjustment expenses experience so as to be actuarially measurable and credible. In addition, current law requires the Office of Insurance Regulation to consider projected hurricane losses using a model or method found reliable by the Florida Commission on Hurricane Loss Methodology when reviewing a rate filing. This bill increases from 60 days to 120 days the time an insurer is not required to use the newest version of an approved hurricane model. This week Sen. Brandes’ bill was placed on the Senate special order calendar for Wednesday, 4/22.
CS/HB 165 by Rep. David Santiago (R-Volusia), was changed from its original form when it passed the House Regulatory Affairs Committee on Wednesday, 4/14 with 17 yeas and 0 nays. Those changes created a significantly different bill than CS/SB 258, the Senate companion. While the bill still makes uniform the time frame for property nonrenewal notices, requires notice of sinkhole neutral evaluation for covered and timely claims, clarifies the dates for application of the Medicare fee schedule in PIP, makes changes to the pre-insurance inspection law to exempt new leased vehicles from pre-insurance inspections, revises documents required by insurers for pre-insurance inspection exemptions, and limits claim reimbursement and property damage coverage suspension based on the timing of document delivery for pre-insurance inspections; the committee removed zip code rating for auto insurance and electronic delivery of personal lines insurance policies. In addition, CS/HB 639, the Commercial Insurance Rating Filing Procedures bill that came out of the House Insurance and Banking Subcommittee, was added to CS/HB 165 to keep the language in CS/HB 639 alive. The commercial insurance bill speaks to two items from the deregulation of commercial insurance rates in 2011. Current rating law requires the CEO, CFO and the Chief Actuary of a property insurer to certify under oath, the accuracy of a rate filing. Since rate filings are no longer required for non-residential property or multi-peril insurance, the bill restricts the certification requirement to residential property insurance rate filings and excludes commercial non-residential multi-peril insurance and commercial motor vehicle from the annual rate filing requirement. The bill is on the House calendar for Tuesday, 4/21/15.
As we mentioned previously, an omnibus bill is often one that gets bogged down with other bill language. As you see from what happened with CS/HB 165 last week, this is beginning to happen again this year. We’ll continue to watch these two bills closely for you.
Florida Insurance Guaranty Association
(FIGA) Reform Legislation
CS/SB 836 by Sen. Jack Latvala (R-Pinellas) and CS/HB 557 by Rep. Jake Raburn (R-Hillsborough)
Both SB 836 and HB 557 have successfully cleared all committee stops and are awaiting floor action in the House and the Senate. We expect them to be heard this week in their respective chambers. We will let you know when both achieve final passage by the Legislature.
Transportation Network Companies (TNCs)
SB 1298 by Sen. David Simmons (R-Seminole/Volusia); and, CS/HB 817 by Rep. Matt Gaetz (R-Walton)
In reviewing the House and Senate packages last week and the differences between the two versions, we found that they both still require the transportation network companies to provide at least $1 million in liability coverage for death, bodily injury and property damage while passengers are in the vehicles. For the “on-call” time, the Senate version wants the driver or company to have coverage of at least $100,000 for death and bodily injury, and at least $50,000 for property damage. The House version is offering minimums of $50,000 for death and bodily injury and $25,000 for property damage. The Senate bill requires 24-hour coverage for drivers who have been with a TNC for six months or longer and that the TNC insurance coverage is issued by an admitted insurer. The House version still includes the national agreement we reported on previously and includes the ability to purchase coverage by TNC’s through non-admitted/surplus lines companies.
CS/HB 817 by Rep. Matt Gaetz (R-Walton) didn’t move forward this week and still waits to be heard on the House floor.
SB 1298 by Sen. David Simmons (R-Orange), which was scheduled to be heard by the Senate on Tuesday (4/14/15), was retained on the Special Order Calendar for the next Senate floor action this week.
Citizens Depopulation
SB 1006 by Sen. Anitere Flores (R-Miami/Dade) and HB 1087 by Rep. Michael Bileca (R-Miami/Dade)
CS/SB 1006 and HB 1087 are very similar, as we’ve mentioned before. Both bills restrict takeout offers to once every six months per policy; however, Sen. Flores’ bill (CS/SB 1006) restricts the offers only if the policyholder declines a takeout offer first and does not have language that allows the policyholder to return to Citizens as a renewal if the initial premium from the takeout insurer is more than 10% of the premium estimated when the takeout offer is made. There are other differences as well and we expect these two bills, if they continue to proceed, to become a part of negotiations between the Senate and the House as we progress to the end of session.
SB 1006 by Sen. Anitere Flores (R-Miami/Dade), which she described last week as making the Citizens depopulation program more consumer friendly, was heard in the Senate Appropriations Committee on Thursday, April 16. There was little debate other than questions regarding changes to the takeout “encouragement” letter that Citizens sends to policyholders earmarked for take-out. Due to the committee discussion on the letter, Sen. Flores informed the committee that she would work on a floor amendment on that issue. The bill passed the committee with 15 yeas and 0 nays.
CS/HB 1087 by Rep. Michael Bileca (R-Miami/Dade) received lots of action last week even before it was heard on the House floor last Thursday ( 4/16/15). On Tuesday, two amendments were filed to the bill with only one surviving. Amendment 198103, filed by Rep. Bileca proposed to change the law on Citizens’ agent appointments. Currently, Citizens can appoint only agents that also hold an appointment with an authorized (admitted) insurer writing property insurance in Florida at the time the agent is initially appointed by Citizens. With Rep. Bileca’ s amendment, the law will require an agent appointed by Citizens to be appointed with an authorized (admitted) insurer actually writing or renewing property insurance in Florida and that insurer must continue writing or renewing such coverage in Florida, otherwise, the agent will no longer be eligible for his/her appointment with Citizens. The bill was passed as amended by the full House with 114 Yeas and 0 nays.
Assignment of Benefits (AOB)
HB 669 by Rep. John Tobia (R-Brevard); Similar bills, SB 1064 by Sen. Dorothy Hukill (R-Volusia); SB 1210 by Sen. Alan Hays (R-Lake County)
Sadly, again this past week there was no forward movement on these mission critical bills. LMA and associated stakeholders who have been working diligently throughout session to move legislation designed to curb the extreme abuses occurring through the use of AOBs have continued to push the above measures as assertively as possible. We will keep you posted on progress and developments.
Flood Insurance
SB 1094 by Sen. Jeff Brandes (R-Pinellas); HB 895 by Rep. Larry Ahern (R-Pinellas)
The Senate version of this bill (SB 1094) passed the full Senate and is sitting in House messages. We anticipate the bill will be heard in the House this week and we’ll keep you briefed on developments.
Sinkhole Activity Damage Improvement/Economic Development
SB 404 by Sen. Wilton Simpson (R-Hernando); Comparable, HB 7067 by Rep. Mike La Rosa (R-Osceola/Polk)
This measure declares that there is a compelling state interest in enabling property owners to voluntarily finance certain improvements to property damaged by sinkhole activity with local government assistance; ads as a qualifying improvement the repair of sinkhole activity damage under Section 163.08, FS, Property Assessed Clean Energy financing mechanisms; and expands the definition of “blighted area” to include a substantial number or percentage of properties damaged by sinkhole activity which are not adequately repaired or stabilized. Ultimately, the bill allows local governments to redevelop sinkhole damaged land using funding generated through tax increment financing. As of this past Friday (4/17/15), Sen. Simpson’s measure (SB 404) remained on the Senate’s Second Reading Calendar with no further floor action occurring. This week its likely we will see the bill move through second reading and be placed on the higher chamber’s Third Reading Calendar. “Third Reading” on the Senate floor is where the last opportunity occurs for in-depth discussion and debate among members before a final vote is taken. We’ll keep you updated as changes occur!
HB 7067 by Rep. Mike La Rosa (R-Osceola/Polk)- On Wednesday April 15, Rep. Mike La Rosa offered a strike-everything amendment (a total rewrite) of HB 7067 to the House Economic Affairs Committee. In that bill was language (which had been removed) from HB 933 that is similar in concept to what is proposed in SB 404. There is much to be done to marry the House and Senate on this important topic and we are following closely.
Property Insurance Appraisal Umpires
HB 491 by Rep. Frank Artiles (R-Miami/Dade); Similar Bill: SB 744 by Sen. Garrett Richter (R-Lee/Collier)
These bills create the property insurance appraisal umpire licensing program including continuing education and disciplinary processes under the auspices of the Department of Business & Professional Regulation. The differences we discussed in last week’s newsletter between the House and Senate versions in the areas of exemptions from licensure, qualifications for licensure and prior experience requirements remain. Sen. Richter’s bill also has a much more expansive definition of the terms “appraiser” and “appraisal” than Rep. Artiles’ House bill. The Senate bill describes “appraisal” as the process defined in the property insurance contract for determining the amount of the loss once coverage is established. This past week Rep. Artiles’ measure (HB 491) moved swiftly by winning critical approval from the House Regulatory Affairs Committee on Tuesday (4/14/15), the bill’s last committee stop. By Thursday (4/16/15) the bill was ready to be heard by the full House and dashed through First Reading. On Friday (4/17/15), the bill was placed on the House Second Reading Calendar and we anticipate Second Reading occurring sometime early this week. To the opposite, Sen. Richter’s similar measure (SB 744) appears to have hit a snag late this past week when it failed to make the agenda for its last scheduled committee stop. The measure needs approval of the important Senate Appropriations Committee; however, the committee’s last meeting will occur tomorrow (Tuesday, 4/21/15) and at present, Sen. Richter’s bill is not reflected on the agenda. We are closely monitoring both bills and will keep you up-to-date on developments.
Insurance Fraud Reform
SB 1306 by Sen. Rob Bradley (R-Alachua/Bradford) and HB 1127 by Rep. Jennifer Sullivan (R-Lake/Orange)
SB 1306 by Sen. Rob Bradley (R-Clay), which was amended earlier in session to remove all additional fraud reporting and SIU changes, deals with PIP fraud only, cleans up language for healthcare clinic unlicensed activity and un-compensable and unlawful charges, sunsets the direct support organization for PIP, and defined last week by Sen. Bradley as “reducing unnecessary government”, was passed by the Senate Appropriations Committee on Thursday, 4/16 with 17 yeas and 0 nays.
CS/CS/HB 1127 by Rep. Jennifer Sullivan (R-Lake), which is identical to SB 1306, was passed by the House Judiciary Committee with 17 yeas and 0 nays on Tuesday, 4/14 and placed on the House Calendar for 4/21.
While we’re on the Subject of Insurance Fraud
As we do every quarter, a representative from the LMA Team attended the P&C Insurance Fraud Task Force meeting. We’ve told you in past articles about the hard work the task force does to help stamp out insurance fraud, as the website clearly announces. At the second quarterly meeting on April 14 in Orlando, the Claims, Legislative, Underwriting, and Public Awareness Committees met to further their work on the goals of their committees. The Claims Committee continues to focus on how fraud affects claims and looks at ways that fraud can be deterred and fought within the claims process. This committee spends a great deal of time looking for innovative ways to address the ongoing problems in Assignment of Benefits. Their work is tough but they are determined to put a halt to this runaway train. The Legislative Committee looks at current Florida Statues and Administrative Rules and identifies areas where legislation can make a difference in deterring insurance fraud. At this time of year, this committee keeps the task force members updated on legislative session action. The Underwriting Committee spends its time focusing on the insurance application process, forms that are used, and how improvements in how insurance is written can lead to a reduction in insurance fraud. One of the projects of this committee currently is the creation of a power point and class room course for agents and agencies on how to address fraud through agents/agencies. The Underwriting Committee hopes to have the course ready by the next quarterly meeting. And lastly, the Public Awareness and Outreach Committee seeks ways to inform consumers and citizens of Florida on how insurance fraud affects them directly. We are very proud of this group of folks who take their personal time and monies to attend these meetings and work toward a fraud-free Florida.
Workers’ Compensation
SB 1060 by Sen. David Simmons (R-Seminole/Volusia) and HB 1013 by Rep. Bill Hager (R-Palm Beach)
CS/SB 1060 by Sen. David Simmons (R-Seminole/Volusia), which removes the need for legislative ratification for maximum reimbursement allowances and manuals that are approved by a three-member panel for purposes of the Workers’ Compensation Law, sits in the House for consideration, and had not been taken up as of last Friday.
CS/HB 1013 by Rep. Bill Hager (R-Palm Beach) lost its chance to be heard in the House Regulatory Affairs Committee this week which indicates the bill may be dead. The only hope for the House workers’ compensation manual ratification issue is if this bill gets tacked onto another workers’ compensation bill.
What happens or doesn’t happen next week may be the end of this effort to remove the legislative ratification requirement for maximum medical reimbursement manuals for workers’ compensation claims. We’ll let you know as soon as we do.
Bills on Life Support and Highly Unlikely to Pass
As mentioned earlier, there’s actually little time left in this 2015 edition of the Florida Legislature’s Regular Session and at this point, leadership in the House and Senate appear mainly focused on how their two Chambers can navigate a solution to the mushrooming budget stalemate. An agreement must be reached with enough time remaining for the 48-Hour “cooling off period” to run prior to final votes being taken, otherwise, a session extension or special session to address the state’s budget will be a certainty. With little time left each day for committee chairs and other influential members to perform rescue missions and lobby for votes, there is a small number of bills we’ve been closely monitoring for you that are hanging by a thread and not likely to pass. Those bills include the following:
- Civil Remedies against Insurers: HB 1197 co-sponsored by Rep. Kathleen Passidomo (R-Collier) and Mike Hill (R-Escambia/Santa Rosa); SB 1088 by Sen. Jeff Brandes (R-Pinellas).
- Quota Share Reinsurance-(Citizens bill): SB 936 by Sen. Jeff Brandes (R-Pinellas); HB 1307 by Rep. Dan Raulerson.
- Insurer Solvency Reform: SB 1190 by former Senate President Tom Lee (R-Hillsborough) and HB 1085 by Rep. David Santiago (R-Volusia).
We’re There So You Don’t Have to Be
We have paused for just a moment to look at where we are in the 2015 Legislative Session, with only ten days left; the passing of the budget is looming large. As you know, passing the budget is the only requirement of Florida’s legislative body and this year is fraught with its problems, specifically the absence of about $2 billion in LIP (Low Income Pool Program) dollars. Legislators have known for a year that this $2 billion in supplemental aid would expire this summer. State officials were told by the CMS that “Medicaid expansion as envisioned under the federal health care act is a wiser use of taxpayer dollars” and that the supplemental payments hinge on the state’s decision to expand Medicaid.
As of last Friday, the Senate’s budget package included LIP and Medicaid expansion dollars in its spending plan and the House package does not-and there lies the $4 billion problem in the proposed 2015-16 fiscal year budgets.
We are watching this battle very closely of course, as well as staying on top of those bills we report on each week. It will be around-the-clock action this week and we’ll be around-the-clock in the middle of it all.
Until next time,
Lisa and the Team
