LMA Newsletter March 14, 2016

Monday, March 14 , 2016

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The Rock and Roll of Democracy

What comes to your mind when you read that title?  What could rock and roll possibly have to do with democracy?  It is an interesting and enlightening metaphor I believe. As I read through a chapter in the book, “British Local Government into the 21st Century” recently, I became intrigued by the thought of democracy: stripped back, simple, easy to understand, emotional, exciting and fun.  Sounds like the rock and roll of my day. From the same book, Lawrence Pratchett argued that democracy is sometimes  too much like jazz;  it can be an obscure hobby for the dedicated few or even baroque, never changing and from another time. And we know that the rock and roll democracy isn’t everyone’s cup of tea.  It’s energetic and edgy for some but not all of us.  Some folks just tune it all out, preferring to stand on the sidelines. It’s everyone’s choice, but remember, in democracy, WE are the band!


During our daily lives, whether we like it or are even aware of it, we practice democracy.  We do it in the way we treat people, make business decisions, do what is best for the collective vs. the one, or decide what is right and wrong in any given situation.  We in Tallahassee have the opportunity to be entrenched in the legislative process year round.  And those of you who spend many of your daily lives participating in the process from afar, are still a part of democracy in action. Sometimes we fight so hard for what we believe is right for majority and get so frustrated, we too want to just do want to tune it all out.  But we are reminded very quickly that when we merely observe, our complacency becomes part of the problem and the music from the band becomes a dull roar.  In today’s connected world, we have vast resources that can put us in the midst of making democracy an exciting and fulfilling part of our lives.  Our very lives depend on us and I for one cannot and will not stand by and merely observe.  I hope you continue to join us every day to make democracy strong.

Latest Florida Voter Figures

So tomorrow is a big day for Florida, actually for the country.  We will be holding our Presidential Primary Election.  As of 10 a.m. last Thursday morning, 1,512,271 Floridians have cast either vote-by-mail or early in-person ballots: 815,183 Republicans, 635,885 Democrats and 61,203 other. There were 1,026,250 total mail ballots returned so far (553,181 Republican, 432,397 Democrats and 40,672 other). With early in-person voting, 486,021 ballots have been cast (262,002 Republicans, 203,488 Democrats and 20,531 other). Early voting turnout is now at 18.2 percent of all Republican registered voters in Florida (4,466,963); for Democrats the turnout is at 12.7 percent of the total number of registered voters (4,999,538).


Do your part, share your voice, cast your vote!

Insurance Commissioner Applicant Watch

The application period for those aiming to replace Insurance Commissioner Kevin McCarty is now officially closed, with a total of 47 in the applicant pool.  Go HERE to see the applications that were received, many of which will be ineligible for failure to pass one or more of the pre-screening requirements.

Legislative Updates – Some Winners and Losers


The Florida Legislature this past Friday passed an $82.3 billion state budget for the next fiscal year that begins July 1 and sent it to the Governor.   Passing a budget is their only constitutional requirement – now it’s up to the governor, with his line-item veto power, to review it.  Pending any need for a special session (to attempt to override any vetoes – or should he call them back to address the $3 billion Seminole gambling compact they failed to pass during regular session), the legislators won’t return until late fall to begin preparation for the 2017 session starting March 7.

Of course, the legislature did a lot more these past 60 days than just pass a budget.  Here’s a recap of the issues we’ve been most closely following and their outcome at this writing:

Transportation Network CompaniesFAILED: Uber and Lyft reps were working through the final day of session to get the Senate to look at the House bill – HB 509 (Gaetz) and SB 1118 (Simmons) – based on model legislation worked out elsewhere between Uber/Lyft and insurance companies, but still opposed by taxi companies.  In the end, efforts failed, which will now allow more counties to try to enact local rules.

Auto Insurance Rates by Zip CodePASSED: The legislature has passed along HB 659 (Santiago) (in previous effort with SB 1036 – Brandes) to the Governor, allowing rates to be set by zip code, if OIR determines the “proposed rating territory has sufficient actual or expected loss and loss adjustment expense experience to be actuarially sound.”

Balance Billing – PASSED:  HB 221 (Trujillo) (in previous effort with SB 1442 – Garcia) prohibits out-of-network providers of emergency room care from billing patients for the balance of the bill that the insurance company didn’t pay.  It includes a dispute-resolution process to help providers and insurance companies work out billing issues themselves, rather than the consumer.  The Senate added a late amendment adding Down Syndrome to insurance coverage that includes autism spectrum disorder.  On the governor’s desk.

Medical Marijuana – PASSED:  The legislature, frustrated by regulatory and legal delays in implementing its bill passed in 2014 to help epileptics with seizures, passed a bill that expands medical marijuana laws to include terminally-ill patients  (see “Medical Marijuana” below in this newsletter).  On the governor’s desk.

Transparency in Health Care – PASSED: HB 1175 (Sprowls) (in previous effort with SB 1496 -Bradley) requires hospitals & insurers to make available information which can be used by consumers to make health care decisions based on cost & quality; requires AHCA to oversee a greater access and transparency effort on costs, including claims data.  On the governor’s desk.

Workers’ Comp Health Care Provider Reimbursement Manual Ratification – PASSED: SB 1402 (Simmons) (in previous effort with HB 7073- House Rulemaking Oversight & Repeal Subcommittee) was a necessary revision of the 2008 version of the manual and will, among other things, update the reimbursement rates to health care providers treating injured workers.  On the governor’s desk.

Workers Compensation System Administration – SIGNED INTO LAW: HB 613 (Sullivan) (in previous effort with SB 986 – Simpson) streamline the compliance and enforcement of rules governing Florida’s workers’ compensation laws, including those involving reporting a death.

Unclaimed Property by Life Insurers – PASSED:  SB 966 (Benacquisto) (in previous effort with HB 1041 – Hager) requires life insurers periodically compare their active policy database against the Social Security Administration’s master death index file (just as they routinely do for annuitants’ benefits). Any unclaimed life or annuity contract unclaimed after five years would revert to Florida’s CFO for future claimants.  The bill includes an industry-opposed “look-back” period, requiring life insurance companies to search their records back to 1992 in order to find deceased persons covered by company life insurance policies as well as make efforts to locate corresponding beneficiaries.  On the governor’s desk.

Insurer Regulatory Reporting – PASSED:  SB 1422 (Simmons) (in previous effort with HB 1163 – Hager) implements the ORSA Model Act and the Corporate Governance Annual Disclosure or CGAD Model Act developed by the National Association of Insurance Commissioners.  The Office of Insurance Regulation has sought these bills to maintain Florida’s accreditation with the NAIC.  On the governor’s desk.

Building Code – PASSED: HB 535 (Eagle) (in previous effort with SB 704 – Hutson) revises various provisions related to the Florida Building Code and to its Compliance and Mitigation Program; restricts application of the Building Code for certain aspects of construction; and revises educational provisions for building code inspectors, plans examiners, and building code administrators. It also establishes an industry workforce task force to study issues associated with training of construction workers.  On the governor’s desk.

Assignment of Benefits – FAILED:  HB 1097 (Caldwell) and SB 596 (Hukill) reforming how AOBs are used ultimately failed as originally proposed, despite warning from Citizens that its progress in reducing its size – and the potential assessment burden on consumers – would be hurt without such reforms.

Prohibited Insurance Practices – FAILED:  HB 671 (Broxson) and SB 1248 (Diaz de la Portilla) had provisions which would prevent illegal kickbacks and referral fees to contractors involved in an insurance claim.Property Insurance Appraisers & Appraisal Umpires – FAILED:  HB 79 (Artiles) and SB 336 (Richter) would have created a property insurance appraisal umpire licensing program and repealed provisions relating to appraisal conflicts of interest and limit appraisal fees charged by a public adjuster.

Peril of Flood – FAILED:  HB 929 (Ahern) and SB 584 (Brandes) would have extended the informational filing of flood rates and provided a matching $50 million annually to local governments for flood risk reduction.

Florida District Court Issues Ruling in Health Insurance AOB Dispute

On March 2, 2016, Florida’s Third District Court of Appeal (DCA) issued its ruling in a case brought against United Healthcare Insurance Company (United) by physician Olivio Blanco Jr. (Dr. Blanco) and a collections firm he hired known as La Ley Recovery Systems-OB, Inc. (La Ley). The case centered around professional fees Dr. Blanco claims United failed to pay him and his assignment of benefits to La Ley, empowering the firm to pursue payment from United and to bring suit if necessary. Prior to the DCA’s involvement, La Ley brought suit against United in the Circuit Court for Miami-Dade County alleging breach of contract and negligent misrepresentation, among other things. In the lawsuit La Ley filed, the firm asserted that prior to providing services to a patient, Dr. Blanco contacted United to verify coverage, and United supposedly represented to Dr. Blanco that the services were covered and that United would fully compensate him for the services according to the pre-established rate of payment. After treating the patient, Dr. Blanco submitted the claims to United, but United failed to fully compensate Dr. Blanco. In response to the circuit court suit, United moved to dismiss La Ley’s complaint on two primary grounds. First, the insurer argued that La Ley did not have standing to bring the action because the health plan does not permit assignment of benefits to third parties. In fact, United’s agreement with Dr. Blanco stated, “If a Subscriber provides written authorization to allow this, all or a portion of any Eligible Expenses due to a provider may be paid directly to the provider instead of being paid to the Subscriber. But we will not reimburse third parties that have purchased or been assigned benefits by Physicians or other providers”. Secondly, United argued that even if La Ley had standing, La Ley’s state-law claims are preempted under section 514(a) of ERISA because all of La Ley’s claims related to an ERISA-governed health plan. Following a hearing on the insurer’s motion to dismiss, Miami-Dade Circuit Court Judge Bronwyn C. Miller sided with United and issued an Order dismissing the suit. The suit was dismissed with prejudice based upon the payment of benefits provision noted above and the assertion that federal ERISA law preempts state law in this case.


After the loss in Circuit Court, La Ley filed an appeal with the Third DCA. When the DCA issued its ruling on March 2, the Court sided with United and affirmed the Circuit Court’s earlier decision to dismiss the lawsuit. The DCA did so for two reasons: (1) United’s health plan clearly provides that United will not reimburse third parties, such as La Ley, that have been assigned benefits by a provider, and (2) La Ley’s state-law claims, which “relate to” a health plan governed by the Employee Retirement Income Security Act of 1974 (“ERISA”), are defensively preempted under section 514(a) of ERISA. Although health insurance related, this case has some striking similarities to the property and casualty assignment of benefits issues the Florida Legislature wrestled with throughout the 2016 Regular Session, and begs the question that if Health Insurers can limit or prohibit medical providers from assigning benefits to third parties, why can’t property and casualty insurers do likewise in their insurance policy forms?

Possible U.K. Exit From European Union Raises Insurer Concerns

While the vigorous debate rages on in Great Britain over whether the United States’ closest partner in the region will remain in or leave the European Union (E.U.), industry media sources report that a number of large insurers have serious concerns about the potential exit. Although British Prime Minister David Cameron strongly favors his country remaining in the E.U., some members of the U.K.’s Parliament and other national politicians have taken issue with the E.U. for its lack of accountability and over burdensome regulations. Ultimately, voters in the U.K. will make the final call when on June 23 they will decide on a binding referendum to leave or remain as an E.U. cornerstone.


According to industry sources, if the U.K.’s citizens vote to leave the E.U. the departure could have a major impact on London’s insurance markets  and leave billions in premiums hanging in the balance.  An E.U. departure might well result in insurers from the United States, Japan, Bermuda, and others with operations in the U.K. to lose their ability to transact insurance throughout the entire European Union. Under current conditions, insurers licensed and regulated by U.K. insurance regulators have the ability to write business throughout the E.U. while only reporting to their home regulator. The ability to engage in passporting comes under an E.U. membership allowance very similar to a provision in the U.S.’s National Association of Registered Agents & Brokers (NARAB) law. This U.S. law allows licensed insurance agents who are approved members of NARAB to write insurance in any state on a non-resident basis while only reporting to NARAB and their home-state regulators.


Very recently over 200 businesses in Great Britain signed a letter encouraging citizens to vote to remain a member of the union; the letter was published in London’s The Times newspaper. According to sources, Lloyds Chairman John Nelson and a representative of London’s RSA Insurance Group, P.L.C. were among signatories of the letter. Also, in a recent speech, Lloyd’s chief risk officer and general counsel Sean McGovern stated that the U.K.’s membership in the E.U provides three “very important benefits” for the London insurance market: it provides access to the single market, encourages foreign direct investment and facilitates trade with countries outside the E.U. He went on to say that as a conservative estimate, the London insurance market currently writes about $8.67 billion of premium volume from the E.U., annually. LMA will continue monitoring the situation in Britain and keep you updated as key developments occur.

Medical Marijuana

Frustrated by two years of regulatory and legal wrangling that’s been getting in the way of providing relief to patients with epileptic seizures, the legislature sent Governor Scott a bill last week that broadens Florida’s medical marijuana laws to include terminally-ill patients.
The bill prohibits the use of smoke-able marijuana, allowing for only pills, creams, or liquids containing a low-THC level.  Two physicians would have to put the patient on the state’s “compassionate use” registry and those under 18 years old would require two physicians as well to agree to a marijuana prescription.  Doctors would have to undergo an annual eight-hour training course.  The bill goes beyond one the legislature passed in 2014 for epilepsy patients that has become mired in court challenges.

The bill passed with bi-partisan support in the House (99-16) and in the Senate (28-11) but only after two hours of sometimes contentious Senate debate, where opponents said it established a “state-sanctioned drug cartel” of five nurseries already authorized under the 2014 bill to grow, process, and distribute the drug.  Those nurseries must be certified by the state Department of Agriculture.

One of those five nurseries, Surterra Therapeutics, reports it has plants in the ground and should have product ready to sell to patients in June.  Company president Susan Driscoll says its first store will open in Tampa and plans include more than 15 other locations statewide, including both cultivation centers and stores.

Florida voters this November will have the opportunity to expand medical marijuana laws even further.  Amendment Two would apply to any patient with a “debilitating condition”.  A similar constitutional amendment failed four years ago by just two-percent of the 60% required to pass.

For those who love pets as I do, medical marijuana may hold promise for our dear animals that suffer seizures.  A bill sponsored by Sen. Jeff Brandes (SB 852)would have opened the door to research into using medical marijuana as a treatment for animals. The bill failed to gain traction this time around.  Here’s a very short video clip with yours truly making the case to the Tallahassee Democrat newspaper: Lisa’s TV interview.


Cottage Industries for Trial Lawyers

A number of bills have also been passed along to the governor designed to curtail what some refer to as the “cottage industry” of trial lawyers.

Many of our readers are fans, as I am, of Senator Jeff Brandes (R-Pinellas County), who valiantly fights the good fight on a variety of topics, including advocating for private flood insurance.  This session, Sen. Brandes has filed a bill geared to stop “Patent Trolls”.  These are entities that make no products themselves but instead purchase a patent and then file dubious patent infringement lawsuits purely to extract money from commercially-productive companies that may use the patented technology in their operations. Patent trolls threaten to sue unless the business pays a licensing fee, which some do, rather than litigating.In a nutshell, SB 1298, now awaiting the governor’s signature, makes it tougher to be a troll by prohibiting patent infringement demand letters that are materially misleading or false, where the patent is invalid or unenforceable, or where the troll lacks a current right to license the patent.

Public Records Trolls (my term, in keeping with the bizarre doll theme here) act similarly.  They file frivolous public records requests that are so enormous, a local government cannot reasonably fulfill them and when they cannot, they are sued.  HB 1021/SB 1220 came together to give judges more leeway in these cases in assessing court costs (including attorneys’ fees) to the prevailing party.  It’s also on the governor’s desk.

This same modus operandi has tentacles to the “Balance Billing” issue.  The legislature has passed a measure (HB 221/SB 1442) that prohibits out-of-network providers of emergency room care from billing patients for the balance of the bill that the insurance company didn’t pay, as the providers weren’t in-network.  The bill includes a dispute-resolution process to help providers and insurance companies work out billing issues themselves, rather than sticking it to the consumer.  Trial lawyers found a troll-rich environment for suing providers who pursue patients with these delinquent (and often huge) bills.

And last but not least, all of you have been following the assignment of benefits (AOB) issue and there are trolls here as well.  Trial lawyer firms use the unsuspecting consumer who signs an assignment of benefits form as the ticket to trolling for lawsuits!   Citizens recently estimated that among the monthly average of 621 lawsuits filed against it for non-weather water damage, 61% filed suit without first notifying Citizens of any claim deficiencies. Really?  Do we need to sue each other before we even talk through and try to resolve the dispute?   And yes, most of the lawsuits disproportionately originate in Miami-Dade, Broward, and Palm Beach Counties.

Hmm. A skeptic might argue that with balance billing now left between the providers and the insurance companies, a new troll might emerge.  Stay tuned!

As We End, We Begin Again

We were there last Friday as the 2016 Legislative Session closed its doors.  As with all sessions in the past, we fought the good fight for the citizens of our state.  We won some and lost some, and we know that with each win or loss there is much work to do after Sine Die.  The democratic process that we are blessed to be a part of in our amazing USA is just that:  democratic and a process.  The wheels of democracy never stop and that is because of the folks who are dedicated to stand up and not tune it out.  While we do stop for a moment and take a bit of a deep breath this week, we will quickly be reviewing again what was accomplished during this session and what we need to do next to put fast feet under the successes.  So, let’s all take that short pause and get back to the process of making it all happen.


Standing with you every day –
Lisa and the LMA Team

Upcoming Events

Inaugural FloodPCA Conference
April 5, 2016
Tampa Airport Marriott30th Annual Governor’s Hurricane Conference
May 8-13, 2016
Rosen Shingle Creek
Orlando, Florida

National Flood Conference
May 17-20, 2015
Washington, DC

May 18 & 19, 2016
Disney’s Coronado Springs Resort
Lake Buena Vista, Florida