No More Turkey Sandwiches Please, at Least not Until Christmas

Yummy, yummy, and delightful was our Thanksgiving celebration and oh yes, we did stuff ourselves well and then….the turkey sandwiches began.  We do love them so, but maybe not for every meal until the big bird is all gone.  What a blessing it was to have family and friends around to share this uniquely blessed American holiday of good food, good times and an overdose of FOOTBALL!  Here in Tallahassee, we enjoyed the brisk winter breezes of late that made the holiday even more delightful and crisp.  Of course, we still worked, as we do, but enjoyed the slower business pace that rings in this time of year. So, make yourself one more turkey sandwich and let us update you on what’s buzzing.

Congressman David Jolly Introduces

“Patient Freedom Act of 2014”

Federal Legislator Hopes to Nix Individual Health Insurance Mandate

The week before Thanksgiving, Congressman David Jolly (State District 13) introduced H.R. 5725, federal legislation designed to restore the right of Americans to decide which healthcare coverage is best for them. Congressman Jolly’s legislation would repeal Obamacare’s individual health insurance mandate. By repealing the individual mandate, the federal government would no longer be able to force a person to purchase health insurance. Under current law, individuals who don’t meet the insurance requirements of Obamacare face annual penalties of $95 or 1 percent of a person’s taxable income, whichever is greater.  That penalty will increase to $325 in 2015 and $695 in 2016 or 2 percent of a person’s taxable income, whichever is greater. Estimates from the Congressional Budget Office indicate that six million individuals will pay penalties in 2016 if they are uninsured. However, if Congressman Jolly’s bill passes and becomes law, it would take effect retroactively and the mandate to purchase health insurance would be repealed back to the taxable years ending after December 31, 2013. Congressman Jolly stated in response to questions regarding his proposed legislation, “I believe the American people should be in control of their own health care coverage decisions, not government, and this bill gives them that freedom. Some may choose coverage that meets the Obamacare requirements.  Some may decide such coverage is not right for them.  This is about empowering the individual, not government.  And it says to the American people the following – if you like your Obamacare, you can keep it.  But if you don’t want the coverage levels of Obamacare, you are empowered and entrusted to make the decision that is right for you.”  Regardless of your personal opinion on the issue, there will be lively debate and passion demonstrated by members of Congress as this legislation is heard in committee.  We’ll keep a close watch on the bill and keep you updated as developments occur.

Federal Debate on Private Flood Insurance –

Hearing in Washington, DC

In the ever growing state and national debate about alternatives to the National Flood Insurance Program (NFIP), the U.S. House of Representatives’ Financial Services Subcommittee on Housing & Insurance held a recent hearing on “Opportunities for a Private and Competitive Sustainable Flood Insurance Market.” The hearing focused on H.R. 4558, the Flood Insurance Market Parity and Modernization Act of 2014, introduced by Reps. Dennis Ross of Polk County, Florida and Patrick Murphy of south Florida. The bill, in essence, clarifies that private insurance policies are equivalent in status to NFIP policies when it comes to federally-backed mortgages that are regulated by federal mortgage lending rules. The federal legislation is premised on the fact that state regulators have a long history of insurance regulation and determine every day whether an insurer can or can’t keep its insurance policy promises…flood insurance is no different.

Those testifying before the subcommittee included Steve Ellis, vice president, Taxpayers for Common Sense; Jordan N. Gray, senior vice president and general counsel for WNC Insurance Services, a broker that helps lenders place flood insurance; and Don Brown, a Florida insurance agent, consultant and former Florida state legislator. Brown discussed emerging private options for flood insurance coverage and the dangers of proposals to lay protectionist taxes on offshore affiliate reinsurance transactions.  His testimony clearly delineated that a private flood insurance market will create competition and result in better policies and pricing for homeowners.  Congressman Ross said the federal government should get out of the way and private carriers are willing and able to write primary flood insurance.  Many carriers already write coverage in excess of the maximum NFIP coverage for both residences and commercial structures.  As one CEO said this spring during the Florida legislative debate, “There are 2.2 million flood insurance policies in Florida out of 5 million nationwide.  One would think there might be a few hundred thousand that lend themselves to private insurer underwriting and risk-based pricing, which, for some could mean rates cheaper than NFIP.”  The federal bill most likely won’t pass in the lame duck congress but when Congress convenes in 2015, expect to hear a lot more about this bill.  LMA was on the ground floor working with the speakers and Congressman Ross as the bill components were put together and remarks by the speakers were finalized. We will keep you abreast of progress in finding alternatives to NFIP coverage!

Proposed FEMA Public Assistance Policy on Insurance Requires Applicants to

Maintain Insurance Coverage

In October the Federal Emergency Management Agency (FEMA) posted a proposed public policy on insurance in the Federal Register, giving the public until mid-December to submit comments. We are providing you with the proposed FEMA policy and some key points to help you develop an overall understanding of the proposal.  In a nutshell, the proposal requires FEMA Public Assistance (PA) applicants (v. residential or private policyholders) to obtain and maintain insurance coverage equal to the assistance provided by FEMA. The proposed policy clarifies that this requirement extends to both flood and non-flood events and can be satisfied through a variety of options, including commercial insurance, blanket policies, insurance pools, self-insurance or a combination of these options. Basically, FEMA is enforcing the requirement that a state agency, local government, tribal government, or eligible private nonprofit organization that submits an application for assistance must have insurance…that could mean hospitals, public housing authorities, private nonprofits, etc.  The main points of the proposed public policy are:

  • FEMA will only approve assistance under the condition that an applicant obtains and maintains their required insurance. FEMA will deny or de-obligate assistance in the current disaster and may deny future assistance if an applicant does not comply with their insurance requirement.
  • An applicant may request that FEMA modify their insurance requirement based on what is reasonably available, adequate, and necessary.
  • If an applicant does seek a State Insurance Commissioner certification, the certification should include supporting information as outlined in policy.
  • An applicant may comply with the insurance requirement for both flood and non-flood hazards with coverage available through commercial property insurance, which may include blanket policies; standard flood insurance policies; insurance pools; or a combination of these sources.
  • In some cases, and with FEMA approval, applicants may comply with the insurance requirement using a self-insurance plan.
  • In a subsequent disaster, FEMA will reduce assistance by the amount of insurance required in the previous disaster. If an applicant’s anticipated or actual insurance proceeds are higher than the amount of insurance required in the previous disaster, FEMA will reduce assistance by the higher amount.
  • FEMA will reduce assistance to avoid a duplication of benefits as appropriate, and enforce flood insurance purchase requirements.

In addition to the main points above, the following is a comparison between the key points of the proposed policy and the past practice/policy.


Reduction by the amount of insurance required in the previous disaster

Proposed:  FEMA will reduce assistance for a facility that previously received PA funding by the amount of insurance required in the previous disaster.

Current:  In most instances FEMA will reduce PA funding by the applicant’s insurance proceeds, unless the applicant has a blanket policy or insurance pool arrangement, in which case FEMA reduces funding by the amount of previous FEMA assistance. Recently rescinded guidance provided for the same effect, in some cases, as the proposed policy: FEMA did not reimburse costs an applicant paid towards its insurance deductible in a subsequent event.


Proposed: Provides elements of an acceptable self-insurance plan and allows non-States the option to self-insure, which provides non-States greater flexibility to choose the most cost effective way to manage risk.

Current: Allows States to self-insure rather than obtain private risk transfer insurance, but does not provide any specific criteria for a self-insurance plan for non-flood damage. The National Flood Insurance Program (NFIP), also administered by FEMA, has its own requirements for States that request to self-insure against flood damage (44 C.F.R. §75.11); this is for purposes of meeting the requirements of the NFIP to maintain insurance in a special flood hazard area, rather than the section 311 insurance obtain and maintain requirements for the PA program.

Modifying the insurance requirement

Proposed: Provides a method for an applicant to request that FEMA consider other factors in determining the insurance requirement, which allows FEMA to exert greater control over federal grant funding. The Stafford Act includes language to indicate that FEMA may make a determination of what is reasonably available, adequate, and necessary; the proposed policy suggests that we make such determinations when requested.

Current: If an applicant cannot comply with the insurance requirement or believes that the required insurance is not available, adequate or necessary, their recourse is to seek a State insurance commissioner certification, which puts control of federal grant funding into the hands of State insurance commissioners.

State Insurance Commission Certifications

Proposed: Provides guidelines to State insurance commissioners on certifying the types and extent of insurance reasonably available for a particular applicant. (The Stafford Act allows for this certification but does not guide state insurance commissioners in how to complete a certification).

In closing, while we should always very carefully evaluate any proposal for new or expanded government regulation or enforcement, FEMA’s proposed enhanced enforcement relative to maintaining underlying insurance may create new business opportunities for members of our industry. We will closely monitor the progress of the proposed public policy and keep you updated regarding key developments.

DFS Workers Comp Division set to Amend Three of its Administrative Rules

The Department of Financial Services’ Division of Workers’ Compensation has announced a rule development workshop for Wednesday, December 10, 2014 at 9:30 am in Room 102 of the Hartman Building, which is located at 2012 Capital Circle Southeast, Tallahassee, Florida. The Division has issued a Notice of Proposed Rule Development and intends to amend the following existing Rule Chapters:

69L-6.027 – Penalty Calculation Worksheet,

69L-6.028 – Procedures for Imputing Payroll and Penalty Calculations, and

69L-6.035 – Definition of Payroll for Calculating Penalty

The amendment to Rule 69L-6.027 revises a penalty calculation worksheet to provide the premium credit for the initial payment of premium made to secure coverage against an assessed penalty and to adjust the penalty look back period and the penalty multiplier to conform to statutory changes. The amendment to Rule 69L-6.028 changes the time frame to impute the employer’s payroll in the absence of business records from 20 to 28 days after receipt of the department’s request to produce records, and changes the factor to calculate employee payroll from 1.5 to 2 times state average weekly wage, to conform to section 440.107, Florida Statutes, as it now reads. Also, the timeframe for the employer to provide additional records is revised to twenty business days after the service of the first amended order of penalty assessment. The amendment to Rule 69L-6.035 also changes the factor to calculate employee payroll from 1.5 to 2 times state average weekly wage, to conform to section 440.107, Florida Statutes, as it now reads. Additionally, the amendments change citations in Rules 69L-6.028 and 69L-6.035 to reflect the current convention of naming to the specific subdivision cited.

The official Notice of Proposed Rulemaking appeared in Volume 40, Number 227 of the FAR. The proposed draft revisions can be viewed HERE.

LMA will of course cover the rule workshop on December 10 and provide our readers with an update afterwards. If you have questions about the proposed rule amendments please contact our office and we’ll gladly provided needed assistance.

Owner of Dangerous Dogs Sues Neighbor Who Owned Victimized Beagle

Yes, it is true and you won’t believe it. A woman in Texas City, Texas who owns four pit bulls is suing the owner of a beagle who was the victim of her dogs’ attacks for $1 million dollars. Really? It all started in October when her four pit bulls got into the yard of her neighbor through a hole in the fence between the two properties and killed Richard Baker’s 10 year old beagle hound.  You would expect the next event would be Baker suing Emerald White (owner of the pit bulls) and in fact, Baker was encouraged to sue White, but declined when he was satisfied that the police declared the dogs dangerous according to Texas City ordinance.  But instead of Baker suing White, she sued Baker because she was “seriously injured” after she was “unexpectedly and viciously attacked” as she entered Baker’s back yard to retrieve her dogs.  Hmmmm…Stranger than fiction we often say and of course, we immediately started thinking of dog bite liability and any trends for Florida in that arena.  Our research found that most all city/county governments have their own ordinances regarding “dangerous” dogs and the requirements for their owners once dogs are deemed as such. The Texas City ordinance in question defines a dangerous dog as one that “makes an unprovoked attack on a person that causes bodily injury” or “commits unprovoked acts” in a place other than its enclosure. In addition, the owners must have a “secure enclosure” for the dog that is at least six feet high with a mechanical locking device. Also, each dog must be registered with the city annually as a dangerous dog,  wear a special tag on its collar and the owners must post a sign in their yard alerting residents of their dangerous canine(s). Owners must also carry $100,000 in liability coverage for each dog. In Florida some homeowners’ policies cover dog bites, some don’t, and some exclude certain “dangerous” breeds like German Shepherds, the Rottweiler and Doberman Pinschers.   Our research also found that according to the Federal Centers for Disease Control and Prevention, dogs bite more than 4.7 million people every year, resulting in more than $400 million in medical costs. Meanwhile, dog-bite insurance claims have been rising steadily for almost a decade. The Insurance Information Institute says the cost of dog-bite claims jumped 53 percent from 2003 to 2011. Dog-bite claims now account for more than one-third of all homeowners’ insurance liability claims, with statistics that show some dog-bite claims costing insurers six figures in damages before the claims are settled; and in some cases the liability limit was maxed out before  legal fees and additional medical costs were covered.  Sounds like a good reason for obtaining umbrella coverage. We think that due to the increase in homeowners’ claims for dog-bite, this is important coverage to talk about. The news story of the folks in Texas peaked our interest and we are monitoring for the outcome of the $1 million dollar lawsuit.  Along with that, we wanted you to give some thought to how insurers are handling this exposure in Florida.  Let us know what you know.

Med Mal Reform – We Expect to Hear More in the 2015 Legislative Session

Florida has not had any major reforms to its medical malpractice insurance statutes since 2003.  But in an article published by Joanna Shepherd-Bailey, associate professor of law at Emory University, she stated that only three percent of medically injured patients have access to courts currently and in the lower-income and minority populations, the numbers are lower.  In addition to having limited access, Floridians are spending over $40 billion a year for defensive medicine costs – a major cost driver (more than 25 percent in overall spending) in increased health insurance costs.  This cost factor is increased when doctors and other medical professionals are ordering more and more medical procedures in order to protect themselves from the possibility of litigation. One of the reforms that will most likely be in play during session is the Patients’ Compensation System (PCS), being introduced by Rep. Jason Brodeur, (R-Sanford).  Rep. Brodeur sees multiple benefits of adopting the system, allowing for a decrease in health care costs and an increase in access to the justice system, including more compensation for patients.  In addition to the cost savings and increase in access, the enactment of the system would bring more jobs to Florida, according to Rep. Brodeur.  In a peer-review study conducted by Emory University, adopting the PCS alternative to traditional medical litigation would allow Florida Employers to hire an additional 45,000 to 100,000 workers from the savings alone. We are monitoring the various stakeholders in this debate and would appreciate your input. Often lines of coverage that face “legislative reform,” like med mal and workers’ comp, give us glimpse as to what may be future reforms in other areas.  We see ourselves in the middle of this debate in the 2015 session.

The Season of Giving Is Upon Us

Thoughts of giving are all around during this season and while we “shop” for those special gifts for the ones we find dear, I wonder if the truly blessed gifts we give throughout the year are the more special.  Like the very precious gift of our time; whether sitting with a friend in the hospital, or just listening intently when someone needs to share difficulties.  Another precious gift that we can certainly give throughout the year is the gift of joy.  Joy seems so simple to give…just a little hug when you come and go, or an authentic smile to whomever serves your meal at the restaurant.  How often do we scurry about, neglecting to give those hugs and smiles throughout the year?  Our world is made up of so many folks who are less fortunate in life than we and while we can’t solve everyone’s needs, we can sure make the time to gift them with our time and our kindness.  Let’s practice giving those two gifts during the month of December and see if maybe, just maybe, we’ll receive the even greater gift in return.

Have a JOYFUL day today …Lisa