<p style=”text-align: center;”><strong>We are Moving and Shaking….</strong></p>
Of late we are seeing more and more inspirational articles about the importance of “moving” or even better said, getting up out of our chairs. I think our sitting status may be a result of our great computer technology and of course, in our leisure time, those comfy recliners and 9000 television channels. Many of you will recall the days when we had to actually “go” to someone’s office to have a conversation with them. Not anymore and you all know how much we at LMA love visiting folks in person, but also know that in today’s business world, it just doesn’t happen as much as it once did. So, with that, we wanted to share an inspirational, great book with you, entitled, “Get up! Why Your Chair is Killing You and What You Can Do About It.” by James Levine. It’s an easy read and provides some excellent suggestions and motivation to get us “moving and shaking.” This book has five “stand-up strategies” to inspire us to get up onto our feet and off of our bottoms. We have embellished them a bit and hope you find them as helpful as we do. Here they are:
1. Rearrange our furniture to discourage sitting and promote standing and moving at office and home. Specifically at work, we can schedule some “walking meetings” instead of sitting in those comfy, big chairs in the conference room. And at home, don’t spend too much time in that TV room if those chairs are REALLY comfy and if we just can’t resist, be aware of how many hours we are “investing” in TV watching. Not much of a return on that investment we know.
2. Always have a pair of comfortable, nice shoes at the office so that the “walking meetings” don’t cramp our toes or our style.
3. Make a schedule that includes at least one walking meeting each week if at all possible. During the legislative session, when the weather is cooler, this should be easy-breezy to schedule.
4.Find a person in your life that is a natural born walker and crown that person your accountability partner at work (and have one for home also) to help you stay committed to your walking routine.
5. Don’t make this “miserable” and be patient as you strive to make walking a part of your life. When the weather is nice outside, walk outside; when the weather is awful outside (yes, our daily summer thunderstorms could be a detriment to outside walking) find a great place to walk inside. We all know folks who have a daily walking routine in the malls of our cities where it is cool and we get to “people watch” while we walk. Even walking in airports might be an option.
Above all, know that any change in routine takes time, so just forgive yourself immediately if you miss that scheduled walk once in a while….just don’t let it become the “routine” to miss ANY opportunity to take that walk. At LMA we are always moving and shaking and we love our opportunities to walk about, whether it involves hanging out with a claims adjuster as he/she is working in the field or being the “Phil Donahue type microphone carrier” when insurance execs are reaching out to the public via town hall meetings and public appearances. We hope the next time we are having a “walking meeting” we might pass you on the street or in the mall, and when we do, look for a little wink and a wave, because we’ll know exactly what you are up to!
<p style=”text-align: center;”><strong>Citizens Again Moving to Settle Sinkhole Claims by the Hundreds</strong></p>
Tuesday 7/29/14- In our last newsletter edition published on July 28 we reported on Citizens Property Insurance Corporation announcing an agreement with the Florida-based law firm Thompson Trial Group, P.A. to settle approximately 300 pending sinkhole claims. Under that agreement the sinkhole claimants will receive settlement offers to end litigation and make critical repairs to their homes, potentially saving the state-run insurer and Florida tax payers millions of dollars in future litigation expenses. Just one day after that announcement (July 29) Citizens began Act II by announcing that it had made settlement offers to 600 Marshall Thomas Burnett, P.L. sinkhole policyholder clients to terminate litigation and initiate the repair process. Under the terms of Citizens’ optional repair program, the corporation is offering to end legal proceedings when policyholders agree to repair the homes being affected by sinkhole activity. Just as it did in the Thompson Trial Group settlement proposal, Citizens has agreed to pay for below-ground repairs as recommended by a licensed professional engineer, who will monitor the repair work and direct any additional necessary below-ground repairs. In addition, each policyholder represented by Marshall Thomas Burnett who participates in the settlement will receive a 5-year warranty from the below-ground stabilization contractor. If a participant in the settlement questions the effectiveness of the completed below-ground repairs, they have the right to choose from a list of licensed professional engineers to re-evaluate the work done. Also, policyholders will be allowed to choose a contractor from a list of approved contractors for above-ground repairs and Citizens will pay for additional above ground damage caused by the sinkhole repair. According to the corporation, more than 100 policyholders have already agreed to end litigation and make repairs, said Ken Thomas, a member of the firm. “Citizens and our firm worked diligently in our respective roles,” Thomas said. “Not every client’s case is the same and this offer has not been extended to all of our clients. We will be discussing the terms with each of our clients who have been invited to participate and whether it is in their individual best interests.” “In many cases, this will work for our clients and repairs can finally be made,” Thomas continued
The Citizens settlement offer was forged with the help of Citizens’ coordinating council, who has been overseeing Citizens’ legal defense strategy on all litigated claims. “This agreement is a win for homeowners and their neighbors,” said Chris Gardner, chairman of Citizens’ Board of Governors. “Homeowners will get the repairs needed to repair and protect their most valuable asset, while local communities and future buyers will benefit from increased property values and the knowledge that professional repairs have been completed.”
<p style=”text-align: center;”><strong>Yes, they’re back….</strong></p>
As everyone most likely has heard, House Speaker Will Weatherford called a special session which started on Thursday, August 7 for the purpose of reapportioning Florida’s Congressional Districts. In the Speaker’s memo to members on August 3, he stated that while the special session was being called to address the ruling by Judge Lewis, “we continue to maintain our strong objection to any attempt to disrupt the current election process. Florida’s Supervisors of Elections have raised serious concerns over changing the elections process at this late date. The NAACP also pointed out in their response to Judge Lewis that, “In a special election, get-out-the-vote infrastructure simply does not exist. Voters who face challenges to political participation – be it financial, job scheduling, transportation, or other impediments – will be irreparably harmed by conducting the election at a time where that infrastructure does not exist.” We understand that legislative staffers were instructed to be tight-lipped about how the districts may be redrawn and when the House and Senate finish their stay here, hopefully some decisions will be made. We’ll let you know what this special session produces.
<p style=”text-align: center;”><strong>International Travel Expenses for Citizens’ Board Questioned by Governor’s Office</strong></p>
Last week Citizens President and CEO Barry Gilway was asked to explain why Governor Scott’s call on Citizens board members to change their travel policy so that it prohibited international travel and permitted only essential employees to attend board meetings, had not been followed. Mr. Gilway was advised to attend the August 19 Cabinet meeting to report why board members continue to go on foreign business trips. Mr. Gilway assured the Governor’s office he would be in attendance and stated, “I received the governor’s request and am really looking forward to updating the cabinet on the issue.” Evidently the international travel again became an issue when the Palm Beach Post reported last week that Citizens Chairman Chris Gardner was given approval for overseas travel to work on a reinsurance issue for the corporation. In response to this article, Jay Neal, Executive Director of the Florida Association for Insurance Reform responded strongly in defense of Citizens (see <a href=”http://www.floridainsurancereform.org/”>www.floridainsurancereform.org</a> and the article link is in the upper left corner of the site) stating that the Post article was “..unbalanced, unfair, and frankly over-the-top.” Mr. Gilway defends some of the travel as necessary and sometimes the international travel costs are hard to avoid. We’ll be there on August 19 to hear the discussion.
<p style=”text-align: center;”><strong>2015 Health Insurance/PPACA Qualifying Health Plans – Rates up? Rates down?</strong></p>
Monday 8/4/14- LMA has followed the fascinating drama being played out in the health insurance arena. On the one hand, the Florida Office of Insurance Regulation (OIR) announced that premiums for individual major medical plans that are compliant with the federal Patient Protection & Affordable Care Act (PPACA) regulatory requirements will increase an average of 13.2% in 2015, according to data provided to the OIR by insurance providers participating in the federal marketplace. (Recall that OIR has no rate approval authority over these filings – Washington, DC DOES have the approval pen). On the other hand, the White House released a statement that Floridians will pay less in 2015, which OIR spokesperson Harvey Bennett countered by saying, “Any assertion that overall rates are going down in Florida is false.” OIR figures show that the average monthly premium for a Silver plan ranges between $938 and $1,452 for a family of four earning $51,000. Even with a federal subsidy, that could mean an out-of-pocket cost of $500 or more per month to have coverage that still requires Florida insureds to pay about 30% of expenses out-of-pocket for deductibles, copayments, and coinsurance. The rising premiums come on the heels of a 37% average increase in the combined individual and small group plan rates in 2014, per a study released in April by Morgan Stanley. That confirms predictions the OIR made last year of premium increases of 30-40% for the individual market plans and 5-20% for the small group market plans for plan year 2014. Fourteen companies filed PPACA-compliant Federally-Facilitated Exchange (Exchange) plans for the 2015 individual market, including three new companies that did not participate on the Federal Exchange last year. Of the 11 returning plans, eight filed average rate increases ranging from 11% to 23%, and three filed rate decreases ranging from 5% to 12%.
The OIR is also providing two examples that show the estimated 2014 vs. 2015 health insurance premiums in the individual market for each Florida County. The first example is for a <a href=”http://origin.library.constantcontact.com/download/get/file/1112374130762-66/PPACAFamilyScenarioByCnty08042014%5b1%5d.pdf”>family of four</a> with an income of $51,000 and the second example is for a <a href=”http://origin.library.constantcontact.com/download/get/file/1112374130762-67/PPACAIndividualScenarioByCnty08042014.pdf”>single individual</a> with an income of $27,000. This analysis does account for federal premium tax credits (subsidies) to illustrate overall premium costs. Changes in those subsidies will cause some consumer costs to increase this year and others to decrease, as noted in the examples. Both examples use the selection of a Silver plan, which is the most frequently selected plan on the Exchange due to the ability of some consumers to take advantage of cost sharing assistance. (Federal premium tax credits are available to qualified consumers at all plan levels purchasing policies through the Exchange while cost sharing assistance is available only to qualified consumers who enroll in a Silver plan through the Exchange.)
<p style=”text-align: center;”><strong>PIP Litigation Keeps Going and Going….This Time in Dade County Circuit Court</strong></p>
Thus far most of the courtroom action seeking to have various provisions of the Legislature’s 2012 PIP reforms held unconstitutional has occurred in Tallahassee circuit and appellate courts. However, in late July attorneys in South Florida petitioned a Miami-Dade Circuit Judge to declare the state’s PIP law unconstitutional based upon the Legislature’s 2012 reform reducing nonemergency PIP benefits from $10,000 to $2,500. Prior constitutional challenges in Florida courts to the current PIP statute have been filed by acupuncturists, massage therapists and chiropractors; however, the Miami -Dade case has been brought by insured Yesenia Boatswain against Garrison Property & Casualty Insurance Company. Trial attorneys are now asserting that current benefits are so diminished under 2012 reforms supported by Governor Rick Scott and CFO Jeff Atwater that the entire concept of the PIP system where drivers forego access to the courts to have medical bills taken care of quickly regardless of who is at fault, has fallen apart. Some attorneys believe that the reduction of PIP benefits from $10,000 to $2,500 is unconstitutional because insureds have passed on their traditional tort remedies, essentially in exchange for payment of medical bills. However, the other side has solid arguments in support of the 2012 reforms. Industry trade groups and insurance regulators say the reforms have helped to reduce PIP fraud, the single largest cost driver in Florida’s auto insurance system and reduce PIP rates. Since 2012 rates have decreased by 13.2 percent among the state’s top 20 auto insurers. Regardless, some powerful legislative leaders who have grown weary of protracted PIP litigation continue to signal a desire to scrap Florida’s PIP statute in favor of an entirely different system. LMA will continue closely monitoring the PIP litigation and legislative fronts and keep you apprised of developments. Stay tuned!
<p style=”text-align: center;”><strong>Why are Additional Insured Endorsements Giving us Headaches?</strong></p>
One of the most common endorsements being used in the commercial insurance world is the Additional Insured (AI) endorsement. And, the variety and kind of AI endorsements is astounding. We have heard from the industry that there are some “suspect” AI endorsements out there, which makes us wonder what exactly is going on with these endorsements in the commercial insurance world. We aren’t saying that all AI endorsements are suspect, but think there may be some things the industry needs to watch out for. So, as we often do, we conducted some research, talked to some folks and wanted to share what we have learned on this topic.
Just as a refresher, let us give you a bit of background on these endorsements and their key areas. The CG 20 10 endorsement is perhaps the most widely used additional insured endorsement, and its history is consistent with the history of the other additional insured endorsements. The 1985 CG 20 10 additional insured endorsement was the first additional insured endorsement to the overhauled CGL policy and provided language such as: “Who Is An Insured (Section II) is amended to include as an insured the person or organization shown in the Schedule but only with respect to liability arising out of “your work” for that insured by or for you.” The original additional insured endorsement did not have many limitations. In 1993, ISO revised the CG 20 10 endorsement to exclude completed operations coverage. (Insurers sought this change to reduce exposure to lawsuits filed long after construction projects ended.) The 1993 endorsement amended Who is An Insured (Section II) as the person or organization shown in the Schedule, but only with respect to liability arising out of your ongoing operations performed for that insured. There was much debate between insurers and insureds about the meaning of “ongoing operations,” as well as whether the 1993 endorsement was intended to remove completed operations coverage. Further changes to the endorsement occurred in 2001, 2004 and 2010. However the 2004 revisions created the greatest change as they deleted the favorable (from the insured’s perspective) “arising out of” language from the policy and inserted in its place the phrase “caused in whole or in part” by the acts or omissions of the named insured or those acting on the named insured’s behalf at designated locations. The 2004 endorsement also contained the same exclusions for completed operations contained in the 2001 endorsements. (The main purpose of the 2004 endorsement was to avoid providing coverage for losses that arose out of the operations that were caused solely by the additional insured’s acts or omissions). And then came the 2013 revisions that maintain the same language used in the 2004 endorsements, with the exception of two important caveats. The 2013 endorsements begin with a broad “HOWEVER,” narrowing coverage in such a manner that insurance afforded to an additional insured: (1) only applies as permitted by law, and; (2) if such coverage is required by contract, the coverage afforded “will not be broader than that which you are required by the contract or agreement to provide for such additional insured.” Further, the 2013 change contained an additional restriction on the limits of insurance such that if coverage for the additional insured is required by contract, such insurance is limited to the lesser of the amount: (1) required by contract or agreement, or; (2) available under the limits of insurance listed in the declarations. So what does all this mean now? The 2013 additional insured changes clarify three key points:
1. Coverage will not exceed that permitted by law;
2. Coverage is restricted to the amount required by contract; and,
3. Coverage is limited to that which is required by contract.
Therefore, it is IMPERATIVE that all parties clearly understand and state the coverage they intend to provide on the front end of a contract and CLEARLY define coverage limits. As part of this educational article, we also wanted to get some first-hand input from an agent that has in-depth knowledge of the topic, and how this works in the real world; therefore, we contacted Ron Kuruvilla of We Insure, Inc. Headquartered in Jacksonville, We Insure is Florida’s second largest insurance agency operation with over 60 offices around the state primarily specializing in selling property & casualty insurance to Florida families and businesses. Ron shared the following with us. “An additional insured endorsement is used to add an entity (person or organization) on an insurance policy to be covered for the listed limits for a claim or risk that might arise to the named party as a result of a covered peril that occurs due to the conduct or operations of the original named insured. Some carriers will follow and use the standard ISO forms. However, some may use different editions of the form. For example, one carrier may use a CG 2010 11/85 form while another may use a CG2010 07/04 edition. These two forms may seem similar in name however, the 07/04 edition is lacking in some major coverages that the 11/85 edition did cover. Not understanding this can lead to a huge E&O exposure for the agent. To make matters even more complicated, some carriers will create their own forms. At that point, it is up to the agent to make certain that the carrier’s forms are similar to the forms the entity requiring they be listed as additional insured is actually requesting. One way for agents to protect themselves is to send a copy of the additional insured endorsement along with the certificate. That way, the agent can make sure the insured and the AI have been given a copy of the form and can review to ensure their coverage needs are met with the endorsement.”
We intend to continue our research regarding some of the problems insurers, agents and insureds are facing with the multiple versions of the AI endorsement and will talk more about this topic in the future. In the meantime, if your interest is peaked and you would like more information now, you might consider reaching out to the folks at weinsureagent.com via their website or by calling directly at 1-877-677-4063 and ask for Ron.
<p style=”text-align: center;”><strong>The Workers’ Compensation Research Institute Releases the Annual Medical Price Index for Workers’ Compensation</strong></p>
The WCRI recently released its annual Medical Price Index for Workers’ Compensation. The MPI-WC report is designed to inform policymakers how states stack up with each other concerning their medical costs for injured workers. The WCRI report covers 25 large states that represent nearly 80 percent of the workers’ compensation benefits in the United States.
Those of us, who follow workers ‘ compensation issues and the workers ‘ compensation industry as a whole, will often, if not always, declare that medical costs for an injured worker are VERY DIFFERENT than medical costs for the typical healthcare patient. We haven’t seen strong empirical data to support why there is a difference, but we know that in most cases it absolutely costs more to treat an injured worker than a patient with a non-work related accident or illness.
To put the WCRI findings in context, it is interesting to note that the National Council of Compensation Insurers (NCCI)’s state of the market annual report has consistently shown data to support the WCRI’s findings with the latest report indicating that 60+ cents of every workers’ compensation dollar is paid to workers’ compensation medical providers.
During the 2013 Florida Legislative session, representatives and senators attempted to limit workers’ compensation medical provider reimbursements but the initiative failed. Our state has been studying workers’ compensation medical costs for over 15 years and those studies and conversations will continue as we all work to find ways to rein in the medical cost side of workers’ compensation dollars. Each year, the NCCI brings in its new rate filing to Florida for the OIR actuaries to review and respond to the cost driver, and while we continue to see that workers’ compensation rates in Florida either drop or stay very stable, we scratch our heads at why the medical costs keep rising. The studying will continue and Florida, as well as many of the larger states will continue to search for answers and resolutions. We would love to hear your thoughts on the important issue for insurers, medical providers and of course, injured workers. Please take a moment and send us a note with your ideas. We’ll continue to stay close to the issue and hopefully in the near future, be able to provide you with an update on the status of the WC Hospital Reimbursement Rule that we hear is close to a good place. If you would like to take a closer look at the hard stats included in the WCRI, click on the following link for access to the report:
<a href=”http://www.wcrinet.org/studies/public/books/wcri861.pdf?utm_source=MPI+6+-+Non-Members&utm_campaign=MPI-WC&utm_medium=email”>WCRI Medical Price Index for Workers’ Compensation, Sixth Edition (MPI-WC)</a>
<p style=”text-align: center;”><strong>$1.1 Million in Misappropriated Insurance Premium Leads to Arrest</strong></p>
Late last month the Department of Financial Services’ Division of Insurance Fraud announced the arrest of Carlos Gutierrez, the former president and owner of G.M. Underwriters in Miami, on grand theft and fraud charges after an investigation revealed he allegedly stole nearly $1.1 million in insurance premiums from seven insurance and premium finance companies. An investigation led by the Department of Financial Services’ Divisions of Insurance Fraud and Agent & Agency Services found that Gutierrez purportedly directed his staff to divert insurance premiums between March and August 2012 to pay his own business debts. Gutierrez, his agency and top staff have been permanently banned from the insurance business in Florida. Being permanently banned means that a person can never again hold any type of license from the Department or the Office of Insurance Regulation and may never be employed or participate in the affairs of an insurance licensee. Any person who violates an order banning participation in the insurance industry commits a 3rd Degree Felony. If convicted on the grand theft and fraud charges mentioned above, Gutierrez faces up to 60 years in prison.
<p style=”text-align: center;”><strong>Geez….Lets Lighten up a Bit in Our Closing Article</strong></p>
I don’t know how many of you read the “funnies” on Sunday, but I still do, and one of my favorite sections is the “Dear Beakman” column. Some may think it silly for an adult to read a children’s Q&A column, but I always find it interesting and sometimes I learn stuff! So, since our first article today challenged us to stop sitting in front of our computers, etc., so much, I thought it would be fun to share a recent Dear Beakman publication regarding computers. So here goes:
<em>Dear Beakman, </em>
<em>Where were computers invented? The kind I could put on a desk, not the huge ones? Mike</em>
<em>Dear Mike,</em>
<em>The first desktop computer was unveiled at the 1964 World’s Fair in New York. Factories started making them in 1965. The Olivetti Company in Italy, already famous for its typewriters, named it the Olivetti Programma 101. Olivetti made about 44,000 of them and they were EXPENSIVE, $23,902.46 each in today’s dollar value. Most of the Programmas were sold in the US and several helped NASA with its moon-landing Apollo 11 mission. The ABC-TV network used them to predict election results in 1968. They were also used by the U.S. Air Force to plan B-52 carpet bombing campaigns in the Vietnam War. </em>
Now wasn’t that fun and don’t act like you knew all that stuff. Until next time, keep walking and learning, and walking some more….Lisa
