LMA Newsletter Nov. 14, 2016



 2016-17 Legislative Session

Interim Committee Meeting Schedule


Tallahassee’s New Meeting Place!

We now have The Conference Room available for rental for all kinds of events.  Co-located with the offices of Lisa Miller & Associates, The Conference Room is an affordable and convenient venue for business, political or social events.

For more information, contact Roberta Courtney-Bailey at 850-222-1041, email at [email protected], or see photos and details on our website at http://lisamillerassociates.com/the-conference-room.  And feel free to come by and take a look!


Election Post-Mortem
We made it through the elections – all of us did.  The sun came out on Wednesday November 9, and we at LMA are grateful for all the support you gave us as we worked tirelessly in the campaigns of those who are “wired” like us and understand the insurance industry’s passionate purpose of taking care of its policyholders.  So many of you invested your time, talents and resources to encourage all those in your world to get out and vote and it was evident with many of the close races and thin vote margins.

This election, unlike any America has seen in generations, was a wakeup call for all of us…that every vote matters, that opinions matter and that, frankly, polls and data analysis and fancy gizmos to predict election outcomes are just that…simply predictions.  So now that the races are over and our elected officials are looking ahead, here’s what our journey looks like as we head into legislative committee weeks in 2017.

First, the number one issue for Floridians is jobs and the economy and the election results reflect that.   Pro-jobs, pro-business candidates were the clear winners over others who may have had other agendas. Second, there was a slight shift in legislative seats…one Republican seat now belongs to a Democrat in the Senate, and two Republican House seats will now be occupied by Democrats. This shift did not change Republican majority and control: 79 to 41 seats in the House and 25 to 15 seats in the Senate. Newly elected lawmakers will be officially sworn in on November 22, 2016 with March 7, 2017 culminating the start of Florida’s 2017 Legislative Session.   We will testify dozens of times during the 60-day session, making sure your voice is heard and we will be reaching to you for help. Don’t be surprised when you get the call and we ask you to come join us to educate and advocate for your causes.

Did every candidate LMA clients supported win?  No…but we did make a difference and we are more energized than ever to provide you all the tools necessary to keep your promises to your policyholders and customers!


Sunshine State Survey 
For those of you who follow the political journey, you no doubt know the saying, “all politics is local.” Those four words bear out the results of the annual University of South Florida-Nielsen Sunshine State Survey that concluded Floridians are happiest with the politicians closest to home. In fact, Floridians are most fond of city and county governments, followed by state government and then the federal government.

The survey found that 42 percent of Floridians said their city governments did a good or excellent job of serving the public and that 43 percent felt that way about their county governments. Only 12 percent said their city governments did a poor job, while 14 percent said that about their county governments.  Florida’s capital city got a 29 percent public service rating as good or excellent and about the same number, 26 percent, said it did a poor job.

Any idea who got the worst rating? You guessed it… the federal government with a 24 percent good or excellent job rating of serving the public, while 37 percent said the feds do a poor job.

The survey of 1,248 people was conducted from Sept. 1 to Sept. 19 with less than 3 percent margin of error. You can see the survey here.


The U.S. Supreme Court Refuses To Hear Stahl Worker’s Comp Case
Last week, the U.S. Supreme Court declined to take up a case that raised questions about the constitutionality of Florida’s workers’ compensation insurance system, exercising the court’s discretion to not explain its reasons.   The appeal from Daniel Stahl, a former Hialeah Hospital nurse who suffered an on-the-job injury, was an effort to overturn a 2015 lower court’s opinion confirming Florida’s 2003 workers’ compensation constitutionality.

In state courts, Stahl’s attorneys argued, in part, that a 2003 workers’ compensation law was unconstitutional because it “decimated and eviscerated” benefits, while injured workers could not pursue civil lawsuits. Stahl could not return to work as a nurse after injuring his back, and the 2003 law eliminated his attempt to secure permanent partial disability benefits.  Florida Supreme Court justices heard arguments in the Stahl case but declined to make a ruling.  The Stahl case was part of a series of challenges to the workers’ compensation system, including a ruling in the spring of 2016 that found a limit on attorneys’ fees in workers’ compensation cases was unconstitutional. That ruling was the basis for regulators approving a 14.5 percent increase in workers’ compensation insurance rates and has set the stage for a legislative battle in 2017 about the system.  We will be monitoring all the worker’s comp insurance developments as they occur.

Florida Supreme Court justices heard arguments in the Stahl case but declined to make a ruling, which is unusual to court watchers.  In fact, in talking with legal scholars throughout the state, it is an anomaly where the Florida Supreme Court heard a case then decided to not issue a ruling.  If any of our readers know differently we would love to hear from you!


 A Replacement Cost Policy Can Allow For Repairs
Florida’s 4th District Court of Appeals has ruled that both state statute and the language of an insurance policy expressly provide that liability in “replacement policies” could be limited to the cost of repairing the covered property instead.  The court ruled that a Broward County Circuit Court abused its discretion a number of times in deciding against an insurer in a homeowner’s water claim lawsuit and ordered a new trial.

In Prepared Insurance Company v. David Gal, homeowner Gal originally sued Prepared for its failure to pay full replacement cost and include general contractor overhead and profit in the check it cut him for water damage to his custom-made kitchen cabinets.  While pending trial, a second water leak did even more damage and Gal brought in a general contractor who concluded the cabinets would have to be replaced – along with now much of the kitchen itself.

Prior to trial, the court granted a partial summary judgment in Gal’s favor, finding the insurer failed to pay the overhead and profit and that the policy required replacement, not repair.  At trial, the court found that a general contractor was necessary and denied the testimony of Prepared’s original adjuster and cabinetry expert because they weren’t general contractors.  It also denied the insurer the right to cross-examine Gal’s contractor, finding the second leak had nothing to do with the case.  A jury awarded $44,304 in damages and Prepared appealed.

The 4th DCA found not only that the trial court incorrectly interpreted the insurance policy and statute, but also should have left it up to a jury – not the court – to decide whether the cabinets could be repaired and if a general contractor was necessary.  The DCA ruling found that Prepared should have been allowed to present the testimony of its adjuster and expert and should have been allowed to cross-examine Gal’s expert.


 NAIC Proposing Guidance on Regulators’ Post-Castastrope Powers
The NAIC is developing draft statutory language on regulators’ powers in catastrophes, which, for those who are battle tested in post catastrophe response, will prevent the need for improvising on the fly while providing greater flexibility for policyholders.  (The draft begins on page 17 here.)

The draft allows a regulator to develop regulations for a catastrophe that address reporting requirements for claims, grace periods for premium payments and performance of certain duties of the insured under the policy, cancellations and nonrenewal as well as emergency adjuster and appraiser licensing.  The NAIC discovered that only 20 states had “general powers” and not all states that require licensed staff adjusters allow for bringing in out of state adjusters to help in an emergency.

Many states look to Florida for its various closed claims reporting tools and emergency rule making.  In addition, Florida leads the nation with its emergency licensing provisions used in states that currently license staff adjusters and appraisers. Industry experts are recommending that premium payment grace periods and temporary cancellation/nonrenewal postponement apply only to policyholders that have been both displaced by the event and request the grace period or postponement.  There is also discussion about how these NAIC proposals affect admitted versus non-admitted insurers.

We invite your comments as well.  Please connect with us if you’d like to discuss.


Got Cyber Insurance?  
The growth of cyber insurance continues but may be reaching a plateau, as companies that don’t deal in personal information don’t all see the need to purchase it.  The 2016 Zurich Insurance-Advisen survey shows the number of U.S. companies buying cyber insurance has increased 85% over the past six years.  Today 65% of companies purchase coverage compared to 35% in 2011.  But that growth is slowing, up only seven percent last year compared to 18% the year before.

The survey reveals that businesses dealing in personal data such as health care, banking, and retail view cyber risk more seriously, have more robust risk management, and are more likely (78%) to have security and privacy insurance compared to all other industries (59%).  The top reason given for not purchasing a cyber policy is the belief their company isn’t really at risk.

The survey showed there’s still a sizeable learning curve for those companies that may acknowledge an abstract risk but fail to put precautions in place.  For example, half of the survey respondents acknowledge their own employees are unintentionally infecting their systems by opening malware emails yet 21% still have no employee education program to reduce the threat.

What may help is who is having to do the heavy lifting now.  For the first time in the survey’s six year history, the general counsel rather than the IT department is now most frequently responsible for dealing with cyber compliance rules and applicable federal, state, and local privacy laws. Zurich says the results show there’s more work to do to help those without insurance understand the risk they face and how best to protect themselves.

Meanwhile, the growing economic powerhouse in the Middle East, the United Arab Emirates (UAE), is catching up with the rest of the world in the growth of cyber insurance.   A recent addition to the insurance marketplace there, the number of cyber policies is up 10% annually, according to one company.  Interest is mostly from large firms engaged in oil, gas, banking, and service sectors, including tourism.   U.S. security technology company Symantec noted the UAE has become increasingly targeted by cyber criminals.

One of the most notorious global attacks of late is the UK’s Tesco Bank, which had funds stolen from 40,000 customer accounts in what is being described as an “unprecedented cyber-attack”.  The bank last week suspended online transactions and began repaying customers for the stolen funds, which accounted for nearly a third of its 136,000 accounts.


   Modern Homes Burn Faster
We all have heard that older homes are much stronger than new ones but most of us haven’t thought about whether new ones are more susceptible to damage by fire.  Since Fire Prevention Week was recently observed in October, we did a literature review and web scan to see what experts are saying.  In a recent Angie’s List report for example, it cited that in less than five minutes (down significantly from the 17 minutes you used to have before engineered lumber, synthetic furnishings and open floor plans) small fires turn into big fires quickly.

Watch this short demonstration that shows you just how rapidly a small trash fire can spread, which underscores why insurance companies are now recommending home sprinkler systems which have proven to decrease loss of life by 80 percent. More than 3200 lives were lost and more than $14billion dollars in property damage occurred in fires across the country last year.  A sprinkler system can range in cost from between $5,000 to $10,000 and of course smoke alarms and fire extinguishers are a must.

So when the smoke alarm goes off, get out of your house. Forget the wedding pictures and save your life!


Knives for All at Popeyes? 
Well it might’ve come to that.  But a Mississippi attorney who choked on a piece of chicken at the fast food chain has instead dropped his lawsuit after “extreme comments” were made against his family, according to published reports.

Paul Newton Jr. says he was forced to use his teeth to tear off a piece of chicken after the Popeye’s in Gulfport failed to provide a knife in his drive-thru line food bag.  It caused him to choke and according to his lawsuit, he had to have emergency surgery later that day to remove the piece of chicken from his throat.  The “spork” utensil provided literally didn’t cut it.  Along with knives for all drive-thru customers, Newton had also sought compensation and punitive damages from several defendants.

“I continue to believe that the facts demonstrate an unsafe condition to the public that could easily be solved by the responsible parties at very little cost,” Newton said in a statement sent to The Sun Herald newspaper last week. “I am hopeful that my filing of the court proceeding results in such remedial actions.”  Popeye’s said it doesn’t comment on ongoing litigation.  Fried chicken anyone??!


Don’t Leave Your Keys In the Car!
A growing number of drivers are leaving their keys in the car, leading to an increase in auto theft.  The National Insurance Crime Bureau reports one of every eight car thefts can be blamed on this absentmindedness, up 31% over the past three years.  Last year there were 57,096 such thefts – one every six-and-a-half minutes – but that number may be higher the report says, because drivers don’t always ‘fess up to doing so.

According to “NICB Vehicle Thefts with Keys in the United States”, Florida came in third place with 9,952 such thefts, behind first place California (22,580) and Texas (11,003); Ohio (8,623) and Nevada (8,073) round out the top five states with the most incidents.  The Miami-Fort Lauderdale-West Palm Beach area (3,847) led the state and was in fourth place by national MSA.

The report noted that it’s an especially bad habit to leave your keys in the car because more frequently, thieves aren’t after just your car, but the personal information that’s inside it.  “We have reports from our law enforcement partners that car thieves have stolen the car, driven it to the residence and burglarized the home before the owner even knew the vehicle was missing,” according to NICB President & CEO Joe Wehrle.


TIME Is A Gift
When we give our time to others, we are making a very personal decision to invest in them on some level. The more time you give, the more you’re invested. You’re actually giving them a portion of your life that you will never get back. The gift of time is the richest gift that will be appreciated and valued forever. Thank you for taking the time to read with us and be a part of our LMA family.

Appreciating all you do,

Lisa and the LMA team