LMA Newsletter October 17,2016

 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!


                               Tribute to DINAH  MILLER


Our team wrote the below article on medical marijuana last week.  On Tuesday, October 11, Lisa Miller’s special dog Dinah passed away in a tragic accident related to Dinah’s epilepsy.  For the past two years, LMA has participated in a pro bono effort to legalize medical marijuana research for animals that suffer from seizures.  We have championed expanding the use of medical marijuana because her dear Dinah was a seizure sufferer. The loss of Dinah has emboldened our firm to continue to fight to include animals in medical marijuana conversations.  We who knew Dinah all loved her from the moment we got her from one of our favorite charities, Last Hope Rescue.  Our annual LMA Christmas celebration is a benefit to support the great work of this organization.     Donations to this charity may be sent to Last Hope Rescue, PO BOX 13723, Tallahassee, Florida 32317 or online at lasthoperescue.org.

                               Rest In Peace, Sweet Sweet Dinah!


Signs of Medical Marijuana Coming to Market 


While the vote on a proposed constitutional amendment expanding use of medical marijuana in Florida is still three weeks away, billboards are popping up advertising  how to get yours.  For a fully refundable fee of $14.95 per month, you too, can find out if you qualify for a medical marijuana prescription in Florida.  “DocMJ.com” allows you to fill out an eligibility survey online and puts you in touch with a doctor to assess if you qualify for approval.

A late September poll by the Florida Chamber of Commerce showed 73% said they were in favor of Amendment 2, which would legalize marijuana for patients with “debilitating conditions.”  22% said they would oppose it.  Passage requires 60% and the same amendment in 2014 fell short, receiving only 58% of the vote.

Those “debilitating conditions” are specific and include cancer, epilepsy, glaucoma, HIV/AIDS, and other conditions that a physician feels using medical marijuana would outweigh the potential health risks for a patient and, we hope, for animal seizure sufferers.

Supporters say medical marijuana provides needed relief from nausea and discomfort and has proven to be a viable and safer alternative to prescription opioids, which have seen a sharp increase in deaths recently, including Fentanyl.  Opponents say the law is overly broad and will lead to people gaming the system for recreational marijuana use and that supporters oppose previous efforts at allowing strains of medical marijuana without the euphoric effects.  Each side has raised several million dollars for their respective campaigns.

Two years ago, the Florida Legislature approved euphoria-free, low-THC medical marijuana for patients with chronic muscle spasms, epilepsy, and cancer.  Called “Charlotte’s Web”, the substance is marketed to drastically reduce life-threatening seizures in children.  But the state Department of Health and growers continue to fight in court over who is allowed to grow and sell that version of the drug.  This year the legislature expanded the law to allow growers to produce full-strength marijuana for terminally-ill patients.

Service Driven Realtors Reach Remarkable Milestone

With 155,000 members and going strong, Florida’s largest professional trade association, Florida Realtors, this year reached its 100th anniversary advancing the state’s real estate industry and helping make the dream of property ownership a reality. By strategically placing itself in a position to help shape public policy, Florida Realtors has long played a critical role in helping the state solve its most difficult financial problems for the good of our citizens and delicate service-based economy. Every legislative session Florida realtors have served as faithful sentinels in identifying measures that would unintentionally make the dream of homeownership more difficult to reach and has worked tirelessly with stakeholders to better shape measures that would impact the real estate industry.

Beginning in 1916 with the establishment of the Florida Association of Real Estate Boards, realtors in Florida have been fortunate to help establish the foundation upon which the industry has operated during its first century. A few of these bedrock events include the 1921 measure creating the Florida Real Estate Commission, 1923 legislative acts preventing state income tax and inheritance tax, lawmaker actions during the 1930s adopting the Homestead Exemption Act, and the 1963 legislative measure establishing the state’s first Condominium Act. During the 1970s the association was front and center when the legislature established the Real Estate Recovery Fund, the Florida Housing Finance Law in addition to the Land Conservation Act. Some observers familiar with the industry believe, however, that the association’s most vital endeavor on behalf of its members and all Floridians was in 2002 when it went toe to toe with the Florida Legislature over lawmakers’ passage of a sales tax on services. The association filed legal action seeking to have the tax repealed and the dispute soon found itself before the Florida Supreme Court. The state’s highest court ultimately sided with the realtors association and repealed Florida’s short-lived tax on professional services. LMA congratulates the Florida Realtors on its achievement of 100 years of service to all Floridians, and we wish the association continued success in the century to come!

Insurance Fraud – It’s Been a Busy Summer

So often we are focused on the fraud and shenanigans in our state that we sometimes forget it touches others in so many other places. We regularly track what happens in other states, and a recent literature review revealed several insurance fraud cases. For example, there’s the recent story about Steven Edward Branstetter, age  60, of Culver City, California.  The CEO of insurance agency LifeCo, Branstetter was arrested on 13 felony counts of theft from an elder, and grand theft for allegedly embezzling over $2.25 million in insurance premiums from 18 victims over the course of nine years. He convinced many of the seniors to surrender legitimate policies in order to purchase life and disability policies he was selling, and was caught because one senior tried to cash in an annuity and it wasn’t valid.  Interestingly, Branstetter’s license expired in 2013 and he did not attempt to renew it. He continued his scam after his license expired.

In August, a North Carolina insurance agent was arrested for creating false auto policies and charged with 22 counts of identity theft and embezzlement among other charges.  North Carolina Department of Insurance (NCDOI) criminal investigators said the agent created eleven fraudulent auto insurance policies in order to collect approximately $1,200 in commission payment while acting as an agent in Forsyth County.

In another case this summer, an investigation by the Georgia Department of Insurance’s Fraud Division resulted in the arrest of an agent in Gwinnett County insurance for fraud, according to a statement from Commissioner Ralph Hudgens.  The agent was charged with pocketing a cash payment of $3,695 from her client for workers’ compensation and liability insurance and issued the consumer a bogus certificate as proof of coverage. The agent faces a penalty of two to 10 years in prison and/or a fine of up to $10,000.

This summer was busy.  Yet another summer insurance fraud case involved a West Virginia insurance agent who was sentenced to a total of nine years in federal prison for arranging a fire to be set at his own residence.  He planned for the use of a long-range remote firing system to ignite the fire. He placed a chair with a tire in it in an interior room of his residence with the intent for that area to be the ignition spot of the fire. After staging the area, the drywall was knocked out so that the fire would spread farther into the framing of the house. Prior to setting the fire, the agent moved his valuables, such as furnishings and personal items, out of the residence and into a storage unit and arranged to be out of town so the residence would be empty. Another individual drove by the residence in the early morning hours and hit the button on the remote firing system to ignite the fire. The agent filed a $624,200 fire claim on his structure and a $468,150 in personal property loss.  In the end, authorities discovered the scam, including tying the insurance agent to witness tampering in an unrelated case with the defendant in that case being tied to the insurance agent/arsonist.

Although it is sickening to see these cases of unscrupulous agents taking advantage in so many ways, it is good to know that they are being stopped and held accountable.  There will always be people in any industry who will find a way to try to take shortcuts to financial gain.  But the better news is that there are hundreds of thousands of insurance agents who possess integrity and professionalism and really care about their clients.  And we appreciate and applaud them!

OIR Warns Insurers to Properly Apply Deductibles
On October 3, the Florida Office of Insurance Regulation issued an Informational Memorandum reminding insurers when to apply the hurricane deductible for Hurricane Hermine claims or otherwise face administrative action.  In the opinion of many, OIR is changing a long-held interpretation of when a policy’s “all other perils deductible” or “other than hurricane deductible” should apply, in conflict with Florida statute.

Through October 6, OIR reports 18,222 claims with estimated losses of $95 million were filed in Florida from Hurricane Hermine, with nearly 70% of those claims closed to date.

Push Continues for FEMA to Drop Non-Compete Clause on NFIP Policies

A consortium of insurance and banking organizations is urging Congress to include a set of Principles for Flood Insurance Reauthorization  targeting the National Flood Insurance Program (NFIP) which is set to expire next fall – including elimination of a non-compete clause NFIP has forced on agents for years.  The Principles are designed to make it easier for more consumers to purchase needed flood coverage, foster a private flood insurance market, improve risk mitigation, and support improved mapping.

State Senator Jeff Brandes (R-Pinellas), who championed efforts to encourage a private market in Florida, is working with members of the Florida Congressional Delegation to urge FEMA to exercise its authority in amending these NFIP contracts to allow agents with so-called WYOs (Write Your Own Policies) to compete and write both NFIP and private policies.

The 2017 WYO arrangement (contract) from NFIP and the clause on Article XIII – “Restriction on Other Flood Insurance” reads exactly the same as it has in prior years when all were hoping to see this language gone in 2017 and beyond:

As a condition of entering into this Arrangement, the Company agrees that in any area in which the Administrator authorizes the purchase of flood insurance pursuant to the Program, all flood insurance offered and sold by the Company to persons eligible to buy pursuant to the Program for coverages available under the Program shall be written pursuant to this Arrangement. However, this restriction applies solely to policies providing only flood insurance. It does not apply to policies provided by the Company of which flood is one of the several perils covered, or where the flood insurance coverage amount is over and above the limits of liability available to the insured under the Program.

The 2012 Biggert-Waters Act took steps to encourage private-sector participation by requiring regulators to direct lenders to accept private flood insurance to satisfy the mandatory purchase requirement-a federal requirement to purchase flood insurance on certain properties.  Yet, obstacles remain, including the non-compete clause and difficulty private insurers have competing with discounted subsidized NFIP rates.

H.R.2901 – the Flood Insurance Market Parity and Modernization Act – passed the U.S. House of Representatives earlier this year and is before the Senate Committee on Banking, Housing, and Urban Affairs.  The Principles were sent to Committee Chairman Senator Richard Shelby (R-AL).

So where does that leave agents and the marketplace that is supposed to be doing all it can to fulfill a state legislative mandate to promote a private flood market here in Florida? The answer: not as far along the road as they could be if NFIP just got out of the way.

Older Drivers React Just as Fast as  Young Whipper-Snappers!

Older drivers are proving they are old hands when it comes to handling semi-autonomous vehicle (AV) technology.  A new research study from North Carolina State University finds drivers 62+ have comparable response times to younger drivers when it’s time to take back control from the computer.

“We wanted to know whether and how a driver’s age affects his or her ability to take control of the vehicle, and what sort of notification from the computer is most effective at getting drivers to take control in a safe and timely way,” notes Assistant Professor Jing Feng in an NC State press release.  “For example, are there changes in driver response time as a result of age?”

Researchers put together one group of 18-35 year-olds and another group of 62-81 year-olds.  They were all schooled on the concept of semi-autonomous vehicles and told they’d get two types of warnings before the AV system shut-off:  one at 7.5 seconds beforehand and the other at 4.5 seconds prior.  The researchers found that older drivers responded to the warnings as quickly as younger drivers, though older drivers fared slightly better with the earlier, 7.5 second warning.  There was also some discrepancy in post-takeover behavior.  Older drivers, for example, tended to brake harder than young drivers.

“While this sort of braking behavior could cause traffic problems, ultimately both age groups were capable of taking over the vehicle in a safe and timely way,” Feng says.

Another interesting note: drivers were allowed to choose how to occupy themselves while the computer was in control.   The younger drivers primarily used electronic devices and the older drivers – they engaged in conversation.  Given Florida’s older population (19.4% of Florida’s 20.3 million people are age 65+, according to the latest Census figures) this study is definitely food for thought.

The paper,  “Age Differences in the Takeover of Vehicle Control and Engagement in Non-driving-related Activities in Simulated Driving with Conditional Automation,”  is published in the journal Accident Analysis & Prevention.

  Florida in the Top Five Best Tax Structure States

Despite rising workers’ compensation insurance rates, Florida still provides a very competitive environment for businesses, especially when it comes to taxes.  According to a recent study by the Tax Foundation, Florida has the fourth-most competitive tax structure in the country.

In its annual State Business Tax Climate Index, Florida was number four behind Wyoming, South Dakota, and Alaska.  (Nevada, Montana, New Hampshire, Indiana, Utah, and Oregon rounded out the top 10; at the bottom of the list was New Jersey.)  Florida gained kudos for not having an individual income tax and was in the top 10 for tax structures on unemployment insurance and property taxes.

The study focuses on how well states structure their tax systems and bases ratings on the different types of taxation levied on businesses and individuals, complexity, and marginal tax rates.  Those states with more tax brackets and with different levels of tax impacts tended to score lower in the study.

The Tax Foundation said its rankings reward transparent and neutral tax codes, while penalizing overly complex and burdensome ones that can affect a state’s economic competitiveness.  Florida ranked #1 in individual income tax, #2 in unemployment insurance tax, #10 in property tax, #19 in corporate tax, and #28 in sales tax.  Florida is generally considered a state that taxes consumption, rather than income or property.

Election Factoids

Until Election Day, each LMA newsletter will contain a 2016 Election factoid or two. Here are some interesting tidbits:

The first election to use a voting machine was in 1892. Though it was actually invented earlier, candidates initially opposed the idea because it eliminated the wheeling and dealing for votes over the phone.  The United States presidential election of 1892 was held on November 8, the same date as this year’s election.   Former President Grover Cleveland ran for re-election against the incumbent President Benjamin Harrison,  also running for re-election. Cleveland defeated Harrison, thus becoming the only person in US history to be elected to a second, non-consecutive presidential term. Cleveland, who had won the popular vote against Harrison in 1888, lost the electoral vote, which cost him re-election. Cleveland won both the popular and electoral vote in the rematch election.

In Matthew’s Wake
Last week LMA was proud to be a part of CFO Atwater’s and Insurance Commissioner Altmaier’s St. Augustine Hurricane Matthew Damage tour.  About 15 insurance company CEOs, the media, and other dignitaries stopped their day to go see the residents of Davis Shores near the Bridge of Lions in the heart of St. Augustine.  We met a homeowner whose house was ruined…flood and wind damage like we haven’t seen since 2004 and 2005.  The homeowner and her husband were resilient beyond words.  He was on the roof replacing the missing shingles and she was mopping up and cleaning out.  When I asked her how things were going with her insurance company, I learned this homeowner had not filed a claim, saying she was assessing her damage and wanted to be sure she got it right.  I encouraged her to call right away, and she was grateful that I cared.  These homeowners are what make up our incredible communities – strong and resilient in times of crisis – and we as an insurance industry stand with them.  We are hearing all sorts of great reports from those who are delivering claims service and those on the receiving end.  The best news as a dear friend of mine shared with me?  “Our luck with Hurricane Matthew sparing us reminded me of 100,000 angels, locked arm and arm standing on the coastline saying to Matthew – ‘You will have to get past us’ “!!

We are here to help you as you do what you do to relieve the burdens of Hurricane Matthew.

Staying strong together,

Lisa and the LMA team

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