LMA Newsletter October 31, 2016



October 31, 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 Day — Almost Here!
We are getting close to Election Day.  For most of us, it’s coming none too soon. I think you’ll agree that the past few months have unleashed a storm of controversy, and we seek shelter, impatiently waiting for the winds to blow over so we can get back to recovery and reconstruction.  I’m not going to get into the “He Said – She Said” or “He Did – She Did” battle in this most unseemly and thankfully unusual presidential race. The steady stream of accusations, allegations and discoveries has created a flood that threatens to drown us.  We are gasping for fresh air in a noxious environment. As citizens, I believe we should take a deep breath and determine where our nation stands on matters that matter most.   How do we account for our assets and liabilities?  Where are we on the balance sheet of quality of life, justice, safety, and a myriad of global issues? What plans are being proposed for paving a positive path forward for ourselves, our children, grandchildren and generations to come behind us? It’s always wise to conduct a reality check when there’s a need to move forward.


Who do we think is best able to lead us into the future?  Let’s look in the mirror and determine whose image best reflects our values and vision at every level of office.  It’s our obligation to learn our history and live the lessons of our past so that we can take steps toward a better future.  That’s one definition of advocacy that I am dedicated to both preach and practice.  There are sins of commission – actions which do harm and are transgressions against legal or moral ethics. And there are sins of omission – ignoring a problem or offense which does harm, but not taking action to rectify the situation. Unlike nations which suffer under tyrannical rule, a representative form of government requires active citizen engagement. In our nation, we cannot be punished for participating. I am an ardent promoter of public policies that improve the odds for health, protection and lifelong success, and I truly believe that voting is not just a right, it’s a sacred responsibility.


Upcoming Florida Ballot Issues in Next Tuesday’s Election
Along with candidates for President, Congress, state legislature and local races, Florida voters will also be deciding next Tuesday, November 8 on four proposed state constitutional amendments dealing with the sun, pot, taxes, and real estate values. Passage of the amendment requires a supermajority of 60% of the vote.


Amendment 1 – “Rights of Electricity Consumers Regarding Solar Energy Choice”

In a nutshell, this doesn’t provide or eliminate anything that isn’t in Florida general law right now.  It simply enshrines in the state constitution the right for consumers to own or lease solar equipment on their property to generate electricity for their own use.  But it also states that non-solar consumers are not required to subsidize the costs of backup power and electric grid access to solar customers.  It beat another solar amendment to this year’s ballot that would have allowed a solar user to generate and sell electricity to others – thereby competing with Florida’s electric companies.  Those companies, according to published reports, have contributed almost all of the $21 million raised to get this measure on the ballot and promote its passage.

Amendment 2 – “Use of Marijuana for Debilitating Medical Conditions”
By far the most controversial of the four, this amendment would legalize marijuana for patients with “debilitating conditions.”  Those conditions are specific and include cancer, epilepsy, glaucoma, HIV/AIDS, and other conditions which a physician feels using medical marijuana would outweigh the potential health risks for a patient.  Supporters say medical marijuana provides needed relief from nausea and discomfort while opponents say the law is overly broad and will lead to people gaming the system for recreational marijuana use.  The 2014 Legislature approved non-euphoric pot to reduce life-threatening seizures in children but implementation by the Florida Department of Health – which would have regulatory authority over the current proposed amendment – has been hung up in administrative courts.

Amendment 3 – “Tax Exemption for Totally and Permanently Disabled First Responders”
This would authorize the legislature to provide an additional homestead exemption to first responders who are totally and permanently disabled as a result of injuries sustained in the line of duty.  It would be in addition to the current $50,000 homestead exemption and would join current exemptions given to first responders and surviving spouses of veterans killed in the line of duty.

Amendment 5 – “Homestead Exemption for Certain Senior, Low-Income, Long-Term Residents; Determination of Just Value”
This revises the special homestead exemption that Florida cities and counties are allowed to provide to certain senior, low-income, and long-term residents.  It would change the calculation to specify that just value of the home is less than $250,000 in the first year the owner applies and is eligible for the exemption and not based on current day value, thus preserving the exemption during times of rapidly rising real estate valuation.


Rematch In “Too Big to Fail”
The difficult question of when an institution is “too big to fail” continues in a U.S. Appeals Court in Washington D.C.  Metropolitan Life, the country’s largest life insurer, received that designation by the Financial Stability Oversight Council (FSOC) in 2014, along with Prudential and AIG.  The FSOC ruled each a “systemically important financial institution” under new rules developed after the 2008 U.S. financial crisis that resulted in a $182 billion government bailout of AIG.

The moniker brings tougher rules and oversight and requires MetLife and the others to set aside capital to ensure they won’t require a future government bailout.  MetLife objected and sued the U.S. government successfully.  A U.S. District Court in March sided with MetLife, ruling that the FSOC used an “arbitrary and capricious” process in evaluating MetLife and potential vulnerabilities.  The government appealed the ruling.

The company says the FSOC decided first that it was “too big to fail” and then created a justification for the label.  Instead, MetLife argues, the FSOC should have used an alternative “activities-based” approach that it says is less costly and more appropriate to insurance regulation.  Under that approach, the FSOC would decide a certain activity poses a risk and then regulate it across all companies involved.

The FSOC has counter-argued it has no authority to do so, yet in April announced it would use an activities-based method to assess risk with asset managers and mutual funds – something that MetLife says calls into question the fairness of the original designation.  Regardless of the outcome of the Appeals Court review, it’s likely the case will eventually end up before the U.S. Supreme Court, given its potential impact to the entire 2010 Dodd-Frank Wall Street reform law passed by Congress.

The NAIC stands with MetLife, which recently decided to break up its business in response to the current regulatory environment.


Bad Faith Finding in NFIP Suit a Case for the Private Flood Market

The Honorable Terrence W. Boyle, U.S. District Judge for the Eastern District of North Carolina had seen enough.  And he drew a line in the sand this past summer that we believe is instructive in the ongoing public case for a private flood insurance market in this country.

Judge Boyle found that Allstate Insurance had acted in bad faith for its unfair claims handling of a National Flood Insurance (NFIP) policy and awarded triple damages to the homeowner.  It’s bold and unusual, in that recovery in NFIP cases is generally limited to actual damages, due to federal pre-emption of punitive damages and attorney fees.  Nevertheless, Judge Boyle forged ahead in Gary Woodson et al v. Allstate Insurance Co. calling it a “flagrant act of bad faith” and an example “of the worst kind of misconduct on the part of an insurance carrier with one of its insureds.”  He noted that Congress set up the NFIP as a “deliberate national policy to provide coverage to property owners suffering major losses due to flooding.”

While acknowledging that extra-contractual statutes are preempted by NFIP, he found the awarding of triple damages warranted, to send a message that bad faith denials won’t be tolerated.  Allstate recently filed an appeal to the Fourth Circuit of the $63,962.50 attorney fee award.

Congress is making significant progress toward definitely declaring – as a condition for reauthorizing the National Flood Insurance Program next year – that there is a high public purpose and need to encourage a private flood insurance market in this country.  This is in part because the NFIP is $24 billion in debt, partially because of bureaucratic ineptness in claims administration in Superstorms Sandy and Katrina, and certainly because new technology and modeling now allow private firms to price risk accurately and compete with what has been a nearly 50-year government monopoly.  The Florida Legislature already figured that out and has set in motion incentives to encourage a private market here in the Sunshine State.

Does it not make sense then to begin treating flood cases fairly and equally in court and in other regulatory environments, regardless of whether NFIP-originated, Write-Your-Own, or from true private market insurers?  FEMA has no one regulating them and certainly the incentives in the WYO program can create an atmosphere of looking the other way.  Our state-based system of insurance regulation, along with the rule of law that doesn’t have federal pre-emptions, would move us toward a fairer, more competitive, and more available flood insurance market for consumers.  Isn’t that what it should be about?  We welcome your comments.


  Changes Regarding DFS Mediators
In a recent notice published by the Department of Financial Service, the details of some changes to the state insurance mediation program were announced to Rule numbers 69B-250.001, 69B-250.002, 69B-250.003.  The Department of Financial Services (DFS) administers two insurance claim mediation programs. The first program is for property insurance claims (homeowner and commercial residential) pursuant to section 627.7015, F.S., and the second program is for automobile insurance claims pursuant to section 627.745, F.S. The mediators must be approved by the DFS to conduct such mediations. The requirements for approval as a DFS mediator in paragraph 627.745(3)(b), F.S., were amended in 2014 to allow an individual who possesses an active certification as a Florida Supreme Court certified circuit court mediator to qualify as a DFS mediator. The amendment also grandfathered in current and active DFS mediators if they conducted at least one mediation for DFS from July 1, 2010, through July 1, 2014. Paragraph 627.7015(4)(b), F.S., was amended to require the DFS to adopt rules for the denial of applications, suspension, revocation, and other penalties for mediators as provided in section 627.745, F.S., and the Florida Rules for Certified and Court-Appointed Mediators. Subsection 627.745(4), F.S., sets forth the grounds for the denial of an application and for the suspension or revocation of the approval of a mediator.


Real Estates Prices Outpace Wage Growth in South Florida
The homeownership rate in South Florida continues its seven-year struggle, dropping to its lowest point since mid-2014.  The rate dropped to 57.5% midyear, compared with the national average of 63.6%.  The Miami-Fort Lauderdale-Palm Beach metro area has lagged behind the national average since 2009, according to a report by Ten-X, an online real estate analytics firm, despite economic growth and ample inventory.


The report  shows existing home sales grew 3.2%, but behind the national growth rate of 4.4%. Sales inventory grew 16% midyear compared with a year ago.  Yet, housing permits, starts, and completions remained low by historical standards.   South Florida homes have appreciated faster than the national average for the fourth year in row, with the median existing home price in Miami at $244,196, an increase of 8.1% in a year.  That’s still below Miami’s 2007 peak.


“The long term outlook for the market is strong, as population growth and employment trends are both positive. But there are some hurdles in the near term, as price appreciation has outpaced wage growth, and volatility in international markets may be slowing down purchases by foreign buyers,” said Ten-X Executive Vice President Rick Sharga.


   Louisiana DOI Seeks Comments on Regulation Limiting Rate Increases
The Louisiana Department of Insurance has issued Proposed Regulation 105  which limits the frequency in which a property and casualty insurer could request a rate increase if the the rate increase is to be implemented within 12 months of the effective dates of the most recently approved overall statewide rate increase. However, the insurance commissioner may grant an exception to the limitation if compelling evidence, along with an affidavit, is presented to regulators.   Regulation 105 would not apply to an insurer’s rate filing that would result in 0 percent overall statewide rate change or an overall statewide rate decrease for any property and casualty insurance product or program. We will keep you informed of this proposed regulation’s status.


Pet Insurance Growing in Popularity
They have names such as Thunder, Ludmila, and Kismet.  But despite being of a different Order (Carnivora) than their owners (Primates), dogs increasingly have something in common with their human friends: health insurance.


The number of pets covered by insurance doubled from 2008 to 2014 to nearly 1.4 million animals, according to a pet insurance trade group.  That’s still a tiny fraction of the estimated 174 million dogs and cats in the U.S. at the end of 2014.  Dogs still rule – with 81% of the policies and cats drool with most of the remainder, although there are plans for other types of pets, too.


The growth in policies is due to steady growth in the sheer number of pets, coupled with increasing veterinarian prices.  Policy prices start around $17 per month and like human health insurance, are based on a number of risk factors, including age, breed, and location.  The most common type of maladies are sprains and soft-tissue injuries.


To add a smile to your day, check out Nationwide’s Hambone Award Nominees, who represent some of the most unusual pet mishaps and their insurance claims.


LMA Salutes Florida’s 2016 Teachers of the Year
Last week, Governor Rick Scott and the Florida Cabinet recognized teachers from across the state for their outstanding educational leadership in the classroom.  An official Resolution was presented honoring Florida’s 2016 Teachers of the Year and commending all teachers in the state for their hard work and dedication to the students of Florida. The Resolution lauded these outstanding teachers for their commitment and effective teaching that has led to student success and expressed ” heartfelt appreciation for the hard work and dedication they have provided to the students and families of Florida.”


2016 Florida Teachers of the Year

Lori Pirzer, Kathleen Sheridan, Kesia Milner, Carol Baier, Mark Peters, Brandon Jeter, Paulette Bryant, Jenny James, Kyle Jaecks, Jessica Ehlinger, Maryann Kelly, Denesha Pierre-Louis, Jacqueline Harris, Nelena Beck, Kay Park, Kristy Imhof, Arnett Moore, Cara Pavek, Kimberly Weeks, Rubye Tarrent, Teryl Samson, Timothy Lauterwasser, Jennifer Edwards, Mary Burr, Erica Farmer, Kathy Jo Smith, Cynthia Ringstaff, Anita Askew, Kimberly Crowder, Staci Duncan, Lucia Aguiar, Brandon Wright, Laura Ritenour, Mary Beth Doyle Radigan, Rachel Moree, Mary Susan Barber, Kristie Lamb, Teodora Celedon, Andrea Vineyard, Matthew Kaye, Julie Arasi, William Skylar Scott, Andrea Krell, Kari Stanley, Tania Travieso, Jamie Herd-Tesson, Precious Symonette, Nicole Smith, Carissa Bass, Charlotte Wadsworth, Clinton LaFlam, Johanna Lopez, Amy Miller, Stephen Anand, Donald Blake, Sarah Dobes, Jessica Solano, Bobbi Okesson, Stephanie Duffy, Khea Davis, Chris Pombonyo, Laurie Zentz, Jeffrey Johnson, Susan Perkins, Georgette Allbritton, James Brown, Jeanna Norman, Grisell Santiago, Robin Diedrichs, Laura Hume, Jennifer Rhea, Kelly Kunde, Janet Acerra, Angela Phillips, Tracy Smith, Kelly Zunkiewicz, Ruth Randles, Margarita Sweeting, and Carrie Prewitt

Please take extra time to thank the teachers in your lives and especially if any of these winners are in your world!


Election Factoids
The only “clean” election in American history was most likely the first one in 1789, when George Washington ran unopposed.   Washington blew his entire campaign budget on 160 gallons of liquor to serve to potential voters.  Another easy win was the 1872 election, when presidential incumbent Ulysses S. Grant ran against a corpse. His opponent, Horace Greeley, died before the election was finalized; Grant won the election.


The 2016 election continues to make  its own kind of history.  As of last week, there were already over 1.2 million votes mailed in from Florida–61% more than at the same point in the 2012 election.  Over 80% of the mailed in ballots came from voters 50 and older, and a majority are residents of Southwest Florida.  And the change in Latino voting is quite notable: 99% more have already voted than in the last presidential election.  Both candidates visited Florida last week, which will no doubt influence the numbers over the next few days as we march closer to one of the most important elections ever in the USA.


Kevin Cate of CATECOMM and Travis Brooks of Proxeme have created a pretty cool visual simulation that depicts Florida’s voting activity for this election in an interesting way.  Each dot on their graphic represents a real vote.  You will want to check it out at FloridaTurnout.com.


 It’s In Your Hands
I opened this newsletter imploring all who read it to vote and get engaged in our nation’s future.  There are no more influential civic activities than voting. It takes only a few minutes but has impact for years to come. When I consider the many who struggled, suffered, fought and even died for our right to vote, I’m motivated all the more to have my voice be heard.  It is my earnest hope that despite all of the negativity, vitriol and divisiveness in today’s politics we can come to a place that brings us to pledge to participate as informed, active and dedicated voters.  Please do not fall in to the trap of complacency. Let’s take every opportunity to accept the obligation to be dedicated citizens of this nation. Our vote is our voice. I implore you to participate and encourage others to join you.  Every journey of 1,000 miles begins with a single step.  Please pay attention and take action.


Lisa and the LMA team