So, How Are We Doing So Far?

It’s January 26 already.  Over three weeks into the New Year and our commitments continue of exercising more, eating healthier, being kinder, working smarter and saying our prayers every day.  What’s that you say?  You just can’t get on that exercise bike every day as planned, and oh, that chocolate-filled donut was just so nice and warm.   And…that guy just pulled right out into traffic in front of you… without any signal!  What is going on here?  We continue to be so excited about the New Year and the great plans.  But we’d like you to stop right now and chill for a second. We aren’t perfect and never will be.  In fact, studies tell us that of the approximately 45 percent of us who do make these new year commitments, only about 46 percent of us succeed – for about six months. Change is hard, and for a while we seem to be able to keep it up.  We were just wondering what the deal is with this stat so we went researching.  A 1989 study by John C. Norcross of the University of Scranton told us that 77 percent of “resolvers” had been able to keep their commitments “continuously for one week,” and follow-up research by Norcross in 2002 put the figure at 71 percent for one and two weeks. That means that about 25 percent of us don’t stick with it for seven measly days. At three and four weeks, 64 percent reported continuous success. That fell to 50 percent after three months and 46 percent after six months. Only 19 percent deemed themselves successful in reaching their goal and sticking to the effort when Norcross followed up his 1989 survey two years later. Ouch! Those are stats we just don’t want to hear, although in our hearts, we know they are correct.  But, here’s some good news:  At six months, people who do make “New Year’s resolutions” are more than 10 times as likely to keep their commitments as people who don’t follow the annual tradition. Norcross found that just 4 percent of “non-resolvers” were able to say that they had continuously stuck with an attempt to change something after six months. So what do we imperfect humans do as we face these dreary statistics?  We just pick ourselves up and keep on trying and trying and trying.  In fact, Norcross gave us some encouragement when he said, “It’s not so much the “resolution” itself but how attainable and realistic the goal.  Someone says I’m going to lose 50 pounds this year, when it’s more realistic to say I’ll try for a few pounds a month and keep them off.”  Maybe January 26 is the day to take another look at those resolutions/goals and make adjustments to make them a little more REAL!  Good luck…we’ll check on each other again in a couple of months.  Now, let’s take a look at some of the major insurance issues grabbing attention over the past two weeks.

Workers’ Compensation Insurers Can Breathe a Little Easier after

Florida Supreme Court Ruling

Florida’s workers’ compensation insurers collectively had a sigh of relief on January 16 when the Florida Supreme Court handed down their ruling in the Morales v. Zenith Insurance Company case.  You will recall that the case challenged the key provision of “exclusive remedy” in Florida’s workers’ compensation law. This provision of law, that codifies a compromise between labor and management stretching back to the 1930s, bars injured workers from seeking additional benefits in civil court. Under the provision, employers agree to provide medical and wage-loss benefits, regardless of who is at fault, in exchange for injured workers forgoing their rights to sue in civil court. Exclusive remedy has been the bedrock principle of the workers’ compensation system for as long as we can remember.

The circumstances of this case stemmed from a workplace accident that resulted in the death of Santana Morales while he was working for Lawns Nursery and Irrigation Designs, Inc. Morales’ widow agreed to a workers’ compensation settlement with Lawns’ workers’ compensation and employer liability insurer, Zenith. The settlement included a release wherein Ms. Morales agreed that the settlement would be her sole remedy. However, Ms. Morales had also been pursuing a separate civil claim against Zenith under the employer liability portion of Lawns’ policy, claiming that her husband’s death was due to Lawns’ negligence. Morales obtained a $9.25 million judgment against Lawns, which Zenith refused to pay. Then, Zenith successfully moved the case to federal court, which reversed the judgment based on the workers’ compensation exclusive remedy provision in the employer liability policy.  On appeal, the Eleventh Circuit court said it was unclear if the workers’ compensation exclusive remedy in an employer liability policy effectively barred Morales from seeking additional damages in civil court. To resolve that question, the federal court requested that the Florida Supreme Court decide the issue. Florida Supreme Court Justice Ricky Polston, in a 16-page opinion written on behalf of the full court, decidedly upheld the exclusive remedy provision of the law. See LINK for the opinion.  The Morales case is one of several Florida court cases involving workers’ compensation we are watching very closely. The other cases in the appeal process include the issues of:  1) whether the 104-week statutory cap on temporary total disability benefits is unconstitutional; and, 2) questioning the constitutionality of the statutory attorney fee formula.  We will let you know just as soon as the Court rules on these cases as both could have a great impact on the state’s workers’ compensation system as a whole.

Top 10 Causes of Workplace Injuries

While the workers’ compensation market in Florida does enjoy fairly low rates and premiums, we know that the driver of any rate increase is the frequency and severity of workplace injuries.  Workers’ compensation stakeholders at both the national and state level spend a great deal of time and resources studying and hopefully, reducing workplace injuries and their causes. One of the largest writers of workers’ compensation insurance in the country and in Florida, Liberty Mutual, recently released the Liberty Mutual Research Institute for Safety’s 2014 Workplace Safety Index, which among many statistics, told us that overexertion and falls account for more than $25 billion in workers’ compensation costs in the U.S. and rank as No. 1 and 2 of the top ten leading causes and direct costs of workplace injuries in 2012. The research institute examined 2012 claims data (the most recent available) for injuries lasting six or more days and ranked the injuries by total workers compensation costs. They are:


Rank      Type Injury         WC Cost               % of Total Type Injuries

1              Overexertion     $15.1B   25.30%

2              Falls on same level          $9.19B   15.40%

3              Struck by object or equipment $5.3B     8.90%

4              Falls to lower level           $5.12B   8.60%

5              Other exertions or bodily reactions         $4.27B   7.20%

6              Roadway incidents involving motorized land vehicle        $3.18B   5.30%

7              Slip or trip without fall    $2.17B   3.60%

8              Caught in/compressed by equipment or objects               $2.1B     3.50%

9              Repetitive motions involving micro-tasks              $1.84B   3.10%

10           Struck against object or equipment         $1.76B   2.90%



Overexertion was typically related to lifting, pushing, pulling, holding, carrying or throwing. Other exertions, which came in at number five, includes injuries due to bending, crawling, reaching, twisting, climbing, stepping, kneeling, sitting, standing or walking.

Falls are often due to winter time slips and falls on ice and snow. According to several insurers, winter-related slip and fall claims doubled between 2013 and 2014. Obviously, we don’t experience those types of slips and falls here in Florida, but there are still plenty of other causes for slips/falls.

Road deaths often occur at road construction sites, with Texas, Florida, Illinois, Pennsylvania and California the top ranking states for roadway worker deaths. The top cause of road deaths (69%) was pedestrian workers killed by motor vehicles. Those road construction type jobs are laborers, highway maintenance workers, heavy and tractor trailer truck drivers, first-line supervisors of construction and extraction workers, and construction equipment operators. In addition to road construction accidents, private sector construction accidents accounted for 60% of worker fatal injuries. As recent as last Monday, January 19, a construction worker died in Cincinnati, Ohio when an Interstate 75 overpass, that was being demolished, collapsed.  The worker was inside a backhoe when the bridge buckled and collapsed. In cases like this, many dollars are spent and many organizations like the Occupational Safety and Health Administration, the State Departments of Transportation, the employer company and its insurer, are involved in the investigation and settlement of such tragic events. Also in the private sector, service producing industries such as the transportation, warehousing, and administrative and support services, accounted for an additional 27% of worker deaths. Ten percent of workers fatally injured in work zones were in the government sector. The good news is that worker deaths are down according to the Occupational Safety and Health Administration (OSHA). Between 1970 and 2012, the average number of worker deaths dropped from 38 to 12 deaths per day.  While U.S. employments have doubled during this same time, workplace fatalities declined by more than 65 percent and occupational injury and illness rates declined by 67 percent.  The workers’ compensation system isn’t perfect, but all stakeholders in the system seem to be working very hard to make it better each year.  We certainly know that is true in Florida.

Workers’ Compensation Three-Member Panel Adopts Reimbursement Manuals

It was a packed house in Room 116 of the Larson Building last Thursday, January 22, for the meeting of the Workers’ Compensation Three-Member Panel.  Commissioner Kevin McCarty chaired the meeting which took two hours for presentations and discussions as the Three-Member Panel moved forward to adopt the Health Care Provider Reimbursement Manual, 2015 Edition and the Ambulatory Surgical Center Reimbursement Manual, 2015 Edition.  The success in getting the manuals to a place of adoption has come from many hours of work by interested stakeholders in the Florida workers’ compensation system, with the Division of Workers’ Compensation leading the charge.  In addition to comments by representatives of the healthcare provider community and the ambulatory surgical center community, all supporting adoption of the manuals, the National Council on Compensation Insurance (NCCI) provided a written analysis of the proposed changes for each manual.  One of the stats we are always interested in seeing is the overall financial impact of the changes to the Florida workers’ compensation system.  NCCI tells us that the estimated impact will be +1.9% (+$61.0 million) due to changes in the Health Care Provider Reimbursement Manual and -0.1% (-$3 million) due to changes in the Ambulatory Surgical Center Reimbursement Manual.  With the adoption of the manuals, the meeting moved to the Three-Member Panel Biennial Report which included a recommendation that the reimbursement manuals become exempt from the legislative ratification requirements of Chapter 120, F.S.  The basis for this recommendation is that s. 440.13(12), F.S., already provides statutory authority to the Three-Member Panel to establish maximum reimbursement allowances and contains specific provisions on reimbursement amounts that are payable to health care providers.  Commissioner McCarthy stated that this is a “reasonable step to take” in an effort to have current and relevant statistics for the manuals. See LINK for the complete 2015 Three-Member Panel Biennial Report.

Flood Standards Development Committee Meets Thursday

The Florida Commission on Hurricane Loss Projection Methodology’s Flood Standards Development Committee will meet this Thursday (1-29-2015) from 9:00 AM to 4:00 PM to continue its important work. Members of the industry and public are free to attend or participate by conference call. A copy of the meeting agenda as well as conference call dial-in number and instructions can be obtained by clicking HERE.

Citizens’ On-going Efforts to Resolve Sinkhole Claims

We wanted to take a moment and update our readers on the strides Citizens Property Insurance Corporation is making to resolve sinkhole claims litigation.

In fact, more than 1,650 homeowners are moving forward with necessary repairs thanks to settlement agreements reached with Citizens to end litigation that had delayed critical repairs to protect themselves, their families and their homes.  As of December 15, 2014, Citizens had reached agreements with 1,669 policyholders to end litigation and begin work to safeguard homes, protect neighborhoods and restore property values that help communities pay for schools, roads and other critical services. Over the past several months, Citizens has taken aggressive steps to end litigation on sinkhole repair cases. Since the first settlement agreements were signed in April 2014, such efforts have reduced a backlog of more than 2,400 litigated sinkhole claims by nearly 70 percent. Under the settlement agreements, Citizens has agreed to abide by a neutral evaluator’s decision in situations in which there is disagreement over the best method of repair. Citizens covers all recommended underground repairs and additional above ground work for any damage caused by the underground remediation. Law firms receive a set fee for expenses. Citizens have extended the settlement terms to any policyholder who chooses to end litigation and begin repairs. Participating policyholders choose a contractor from a long list of qualified businesses. The qualified sinkhole contractors complete the underground repairs critical to stabilizing the property. Citizens pay the claim as the repairs are being completed. Policyholders can choose from any contractor listed in the agreement to complete sinkhole-related, above ground repairs. This is good news for the citizens and policyholders in Florida and for the economy of the state in general.  We hope to see this good work continue.

Keeping our Eyes on Cybercrime

You will recall the article in our January 12 newsletter regarding the hot topic of cybercrime, statewide, nationally and internationally.  We continue to read new information every day on how this is impacting all areas of our world.  This past week, we read some interesting information about how our universities are addressing the mad dash for cyber security experts, which means a need to recruit and educate students in the field.  We found in our research that the University of Tampa has announced it will begin offering an undergraduate major in cyber security this fall; Saint Leo University plans to launch a master’s program in cyber security in August, complementing its undergraduate program in information assurance and security; and, the brand new Florida Polytechnic University in Lakeland has a concentration in information assurance and cyber security in its computer science and information technology track.  In fact, last year, buoyed by a $5 million allocation from the Florida Legislature, the Florida Cybersecurity Center opened on the campus of the University of South Florida, acting as a statewide clearinghouse to share knowledge, resources and training among Florida’s 12 public universities. The demand appears to be great as demonstrated by placement firm, Burning Glass, which shared that there were 209,749 national postings for cyber security jobs in 2013, up 74 percent from 2007. The jobs are posting with an average annual salary of $94,000. The top region for the demand was in the Washington, D.C. area, with Tampa placing 24th in the nation for those positions.  A hot topic as we reported last time…I would say so and a rapidly growing industry.

We Can Feel the Energy in the Air

We can already tell, in just these first few weeks of January, that 2015 is going to be a “happening kind of year.”  Almost as soon as the calendar slipped over into the New Year, the business of business just seemed to wake up and say, “Let’s make it happen.”  We are already crazy busy here at LMA, and loving it, as you know.  We are on the road here in Tallahassee and everywhere around the State.  These next two weeks, we’ll attend the Florida Realtors conference and Florida Chamber of Commerce Annual Insurance Summit in Orlando for several days.  The packed agendas for these events promise some great speakers and topics. Here in Tallahassee, we are already spending lots of hours in legislative committee meetings and working the halls getting to know the new members of the Legislature. We’re keeping our eyes and ears on the subjects we know you are interested in and will keep you updated as chamber leaders begin to shape their true agendas for the upcoming Regular Session. Stay tuned!

We also really appreciate you taking the time to read the articles we provide in each publication of our newsletter and as always, want to hear back from you.  So give us a call and until next time, try that exercise bike one more time!

Oh, and one last thing. Most of you are likely aware of the recent “back and forth” between Governor Scott and CFO Jeff Atwater concerning the process of making Cabinet level appointments. The exchange between the two leaders was prompted by the recent resignation and replacement of FDLE Commissioner Jerry Bailey and the Governor’s desire here at the beginning of his second term to replace executive leaders at the Office of Insurance Regulation (OIR), Office of Financial Regulation (OFR) and the Department of Revenue. We are providing the following letters between the Governor and CFO for your review.  They speak for themselves and the public discussion about these topics will take place at the February 5th Cabinet meeting. We will keep you posted!

Lisa and the Team