What a Great Idea…Wish We had thought of it….
See…we really do pay attention all the time. We received a great idea from one of our loyal newsletter readers/friends a couple of weeks ago and we love it. The question/idea was, “can we have an “ask Lisa” column in the newsletter?” Well, of course we can and we are excited about any questions/thoughts/ideas you want us to take a look at in the “Ask Lisa” column. So, as we receive your questions/thoughts we will start that special column in our newsletter, and will do our best to give you good, factual information. So, put on your thinking caps and shoot us a note… This is fun!
LMA Remains Engaged in the Political Process; Attends Candidate Forums
Wednesday 5/21/14 – 2014 is an election year, and come November we’ll be voting for our next Governor and many new Senators and Representatives, depending on your location. With so many candidates in the running for different seats, LMA is staying on top of these important races by attending candidate interviews hosted around the state. This past week we were in Orlando learning about candidates in Central Florida House and Senate races. Consultants from many industries were represented during the interviews with Lisa Miller & Associates attending representing the property insurance perspective. Candidates were given 30 minute blocks of time to introduce themselves after which consultants could ask questions, as time allowed. Many questions ranged from education and healthcare to the state of the candidates’ campaigns. The daylong event proved to be very informative and helpful to LMA in getting to know those individuals who are endeavoring to join the political process in Tallahassee, each wanting to make Florida a better state. We’ll be attending many more candidate forums around the state and as Election Day draws nearer we’ll be prepared, if you desire, to have one-on-one conversations about the legislative races in your areas and how well particular candidates might react to our industry’s issues. We will keep you updated!
Lighter Than Usual Atlantic Hurricane Season – Hurricane Hunters are Real
Thursday 5/22/14- Weather experts with the National Oceanic and Atmospheric Administration (NOAA), The University of Colorado and other sources are predicting a near-normal to below-normal 2014 Atlantic hurricane season. There appears to be consensus among experts that this year’s season will be largely driven by the development of an El Niño occurrence in the Pacific Ocean this summer. El Niño causes stronger wind shear in the Atlantic Basin, which reduces the number and intensity of tropical storms and hurricanes, according to NOAA. El Niño can also strengthen the trade winds and increase the atmospheric stability across the tropical Atlantic, making it more difficult for cloud systems coming off of Africa to intensify into tropical storms. NOAA is predicting 8-13 tropical storms, compared to a 30-year average of 12; 3-6 hurricanes, compared to a 30-year average of six; and 1-2 major hurricanes, compared to a 30-year average of three. NOAA says there’s a 70% likelihood of its prediction for 8-13 storms. In April Colorado State University researchers predicted nine named storms, three hurricanes and one major hurricane. Let’s hope this year’s predictions are accurate and Florida can for another year escape damage from a land falling hurricane.
LMA had occasion to visit with Lt. Colonel Rich Harter of the 53rd Weather Reconnaissance Squadron, known as the Air Force Reserve’s Hurricane Hunters. This group is one of a kind, being the only Department of Defense organization still flying into tropical storms and hurricanes since 1944. When the storms are approaching, one or more of 10 Lockheed-Martin WC-130J aircraft and its crew of the 403rd Wing of Biloxi’s Kessler AFB race off to gather data to transmit to NOAA and others to help us all prepare for the storm. Hats off to these brave men and women who make our jobs easier! Like them on Facebook at https://www.facebook.com/hurricanehunters and invite them to your next event! Amazing!
State Appeals Court Sides with Scout Volunteer
Monday 5/12/14- A state appeals court has ruled in favor of a Boy Scouts of America volunteer in a dispute regarding whether an automobile insurance policy should cover an accident that happened after the volunteer assisted an Eagle Scout candidate with a project. Earlier in the dispute a Citrus County Circuit judge concurred with Old Republic Insurance Company that the policy issued to the Boy Scouts of America and covering registered volunteers did not apply to the case. However, Florida’s 5th District Court of Appeal has sided with Alan Norton, a registered volunteer and director of advancement and leadership training for Boy Scouts Troop 370. Alan Norton and another motorist (Chris Hubner) suffered injuries in a head-on collision after Norton had concluded taking pictures of a cemetery clean-up project for a troop member working toward becoming an Eagle Scout. Old Republic argued that the crash occurred after the project was completed and that Norton was not conducting an official scouting activity at the time, pursuant to the appeals court decision. However, the appeals court panel overturned the lower court. “The ‘activity’ in which Norton was participating was broader than the cleanup of the cemetery,” said the ruling, written by Chief Judge Vincent Torpy. “He was providing assistance and encouragement to the scout towards the completion of his Eagle Scout requirement. The physical cleanup of the cemetery was only a part of the activity. The submission of an official workbook documenting the event was also an essential prerequisite. Norton testified that his purpose in returning to the project was to take photographs for the official project workbook.”
Federal Appeals Court: Reserve Information Confidential & Proprietary
Thursday 4/29/14- Siding with the industry, the United Statutes Court of Appeals for the Third Circuit recently rejected an insured’s discovery request for reserve information in a first-party bad faith action. In its April 29 ruling in Mirarchi v. Seneca Specialty Insurance Company, the Court of Appeals upheld the district court’s denial of the insured’s request for the reserves and, in so ruling, endorsed numerous prior district court decisions that have held such information to be non-discoverable. In the Mirarchi case a fire damaged the insured’s property. Seneca Specialty paid the entire undisputed amount, and the parties went to appraisal on the disputed portion of the claim. An umpire entered an award close to the amount sought by the insured, and the insurer paid. Thereafter, however, the insured filed an action against Seneca Specialty in federal court, asserting that the insurer had delayed payment in bad faith, and requested discovery of the company’s reserve information. Seneca refused to provide the requested information, and the district court held that it was not obligated to do so. The trial court thereafter dismissed the bad faith claims in their entirety, noting that the insurer had paid the undisputed amount despite the lack of any contractual or legal obligation to do so and further that the insurer, in valuing the claim lower than the appraisal award, had relied on reasonable expert opinions. Late last month, a unanimous Third Circuit panel upheld the trial court’s decisions on appeal. In affirming the ruling that the insurer did not have to produce reserve information during discovery, the Court of Appeals agreed with the district court that “a loss reserve is the insurer’s own estimate of the amount which the insurer could be required to pay on a given claim,” and “[does] not represent an evaluation of coverage based upon a thorough factual and legal consideration[.]” Judge Thomas L. Ambro’s opinion also agreed with the district court that loss reserve figures are generally irrelevant and not discoverable. The Mirarchi decision is important for insurers because it provides support for the position that discovery demands for reserve information are improper even in instances in which the insured has pled a cause of action for bad faith. Under this case, such information is proprietary and thereby irrelevant and non-discoverable. To read the Court’s opinion please clicks HERE.
State Board of Administration Announces Cat Fund Estimated Capacities
The State Board of Administration of Florida (the Board) has released official notice of the estimated borrowing capacity, estimated claims-paying capacity, and projected balance of the Florida Hurricane Catastrophe Fund (Cat Fund or the Fund) as of December 31, 2014, in accordance with Section 215.555(4)(c)2., Florida Statutes. These estimates relate to the 2014-2015 Reimbursement Contract Year. The Cat Fund’s projected post-event borrowing capacity estimate was $8.3 billion for May 2014. The estimated borrowing capacity and projected available year-end cash balance provide estimated claims-paying capacity of $21.250 billion over the next twelve months, although the statutory limit is only $17 billion. Greater detail regarding the “May 15, 2014 Claims-Paying Capacity Estimates” Report can be found by clicking HERE. The projected year-end balance available for reimbursement of participating insurers on December 31, 2014, is estimated to be $10.950 billion, which represents the amount of assets available to pay claims, not including any bond proceeds. Given the projected year-end cash balance of $10.950 billion and the additional liquidity provided by the $2 billion of pre-event bonds that were issued in April 2013, the FHCF has a total of $12.950 billion in liquid resources, and would therefore need to issue only $4.050 billion in revenue bonds to fund its $17 billion statutory limit. It would take a while for the cat fund to exhaust these types of resources with some saying a minimum of 6 months and others saying 2 years, depending on the size of the storm(s). So if you were king for a day would you use this incredible financial resource to reduce the liability that Citizens poses for our state or would you simply let this cash build up, sit – and wait for the storm(s). That is the debate that the legislature grapples with and will again be the subject of discussion next year. Stay tuned!
Amendment for Motor Vehicle Premium Discounts Filed on Last Day of Session
On Friday afternoon (May 2 -last day of Session), Sen. Darren Soto of central Florida filed an insurance-related amendment to HB 7005 dealing with numerous issues at the Department of Highway Safety & Motor Vehicles. Sen. Soto’s amendment (667084) added new language to s. 627.0653, Florida Statutes, addressing insurance discounts for specified motor vehicle equipment. The amendment states that the Office of Insurance Regulation (OIR) may approve a premium discount to any rates, rating schedules, or rating manuals for liability, personal injury protection, and collision coverages of a motor vehicle insurance policy filed with OIR if the insured motor vehicle is equipped with autonomous driving technology or electronic vehicle collision avoidance technology that is factory installed or a retrofitted system and that complies with National Highway Traffic Safety Administration standards. The HB was a general bill that addressed transportation issues and our curiosity was particularly peaked at the autonomous driving technology terminology. After some research, we found that a company named Mobileye was behind the legislation and lobbied hard for its passage. Mobileye touts that by using sophisticated vision algorithms with collision avoidance technology, it is able to “interpret” a scene in real-time and provide drivers with an immediate evaluation based on its analysis furthering automakers using technology into their safety feature applications known as Advanced Driver Assistance Systems (ADAS). The Artificial Vision Technology (machine vision) for mono-cameras, supplies global vehicle manufacturers with a core System-on-Chip designed to specification for vision based solutions. This is new technology and we are interested in how it may continue to impact motor vehicle premium rates, rating and rating rules. We’ll let you know as further news hits the marketplace.
DIF Detectives Make Two Insurance Fraud Arrests
This past week detectives with the Department of Financial Services’ Division of Insurance Fraud (DIF) made two major arrests in connection with on-going investigations. On Friday (5/23/14) DIF announced the arrest of Nancy Amieva of Port Charlotte for filing fraudulent insurance claims after intentionally flooding her home and setting her kitchen on fire. The claims, totaling more than $70,000, were never paid when suspicions were raised about their legitimacy. If convicted, she faces up to five years in prison. Following a tip from Amieva’s insurer, a DIF investigation revealed that Amieva had contacted her insurance company twice in the week prior to the incident, inquiring about her fire and theft coverage, asking about the documentation needed for lost items and how long it would take to receive a payout after a claim is made. Amieva also made inconsistent statements about the fire and events leading up to the fire and flood. She also forged documents in order to be reimbursed for being away from her home while repairs were made to her residence. Earlier [on Thursday (5/22/14)] DIF announced the arrest of Aurora Hernandez on charges of organizing and billing for a staged accident, commonly known as Personal Injury Protection (PIP) fraud. Hernandez’s arrest is the latest in a string of arrests resulting from Operation No-Med Services, which dates back to May 2013 and involves four accident clinics in Miami-Dade County.
In May 2013 the Division of Insurance Fraud conducted an investigation called Operation No-Med Services, which has led to the arrests of a medical doctor, two clinic owners, five medical licensees, six staged accident organizers and six others. Hernandez, who operated Magic Hands Medical Services, faces a maximum of 235 years in prison for her involvement in the staged accidents. DIF detectives are also actively seeking Ricardo Jimenez, owner of two now-defunct Miami-Dade clinics. LMA congratulates Col. Simon Blank, Director of the Division of Insurance Fraud and DIF’s detectives for their continuing exemplary efforts in combating insurance fraud throughout the state.
Thanks for your Positive Input and Recommendations
As you saw in our opening to today’s newsletter, we really love hearing from you and love your ideas. With every newsletter publication, we get great comments and encouragement from our readers/friends about the content and information we work so hard to provide. This last week, we were encouraged to hear….”Lisa, Top of the morning. Great stuff! Thanks!” Those eight words made our day brighter and better! Believe us, we know all too well, in our very busy lives, how many extra moments it takes to stop and just say, “Hey, loved that”; “thanks” or “here’s an idea”. We are always excited to “see” you and just wanted to take a few moments in our newsletter today, to say “thanks for all you do to support our work for the wonderful citizens of our great state and country. We just can’t say “thanks enough”. So, we encourage you today to take a moment in your busy schedule to tell someone, “thanks for all you do.” Just like for us when we hear from you, YOU will make their day brighter and better.
“Til next time, be safe and careful out there….Always, Lisa
