LMA Newsletter Sept. 19, 2016

Important  Calendars

Florida Senate Calendars  | Florida House Calendars |  Upcoming Florida Cabinet Meetings

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Upcoming Citizens Insurance Meetings

Watching Our Step

I read a quote by Craig Groeschel recently that said: “To step toward your destiny, you have to step away from your security.”  I immediately thought about Americans insatiable urge to know how many steps they have taken in a day.  I bet of our  more than 1200 readers, over half  are wearing a device to tell them their daily journey calculated in the number of steps. The “step counting” tech toy consumes many, as it’s  a device meant to promote a healthier lifestyle by recording steps, stairs, distance, calories and sleeping stats that are viewed on a downloadable app.

I received this note recently from a college pal encouraging me to join the craze.  She said, “I am seldom sitting down and was secretly hoping that I could reach the magic 10,000 steps a day simply by going on with my day to day activities and I would be off the hook for any other form of exercise. Unfortunately, I only achieve about 7,000 steps during a typical day so right away found myself doing laps of the kitchen while cooking dinner, pacing while on the phone and jogging up and down stairs. Words cannot describe how ridiculously happy I am when I reach the magic 10,000 mark and my Charge vibrates. I actually pump the air and let out a whoop of joy. I glow with pride when I receive an email telling me I have added a stair walking or distance badge to my collection. My whole family and class have gotten into the spirit and they now regularly ask me how many steps I have and how close I am to my goal.”

Pondering this, I reflected how this device constantly reminds us that exercise is important and to not make excuses by finding something more important to be doing rather than worrying about fitness levels.  And the device screams…every little bit counts.  The beauty of this motivational tool is that there is nothing like seeing your name on a computer screen to motivate an impromptu walk!

Please share with me how this simple toy gives you the positive reinforcement you need, or if it provided you a dramatic lifestyle change.  Imagine the powerful learning that could occur if we were able to measure and set goals for how often we used kindness in our day (Kindbit) or how many times we used a powerful word in a conversation (LAbit).  I think the Fitbit might be on to something that perhaps isn’t so far removed from life. The Fitbit philosophy might become the next motivating, relevant and personal learning environment of the digital age.

Hurricane Hermine A Good Test For Florida Residents And Insurers

After 10 years without a major storm, Florida’s luck finally ran out in the overnight hours of September 1-2, when Hurricane Hermine made landfall on the Gulf Coast, just southeast of Tallahassee.  The storm was a weak Category 1, with winds barely 80 mph.  Although the sluggish system caused storm surge and damage all the way south to Tampa Bay, the wind and rainfall amounts were less than forecast.  As a result, flooding was less than feared.  The storm hit relatively low population areas with lower insured values than the big population centers of Florida, prompting insurance analysts to declare the damage “manageable”.   Sadly, one person died in Ocala when a tree fell on him.

We think Locke Burt, chairman of Security First Insurance in Ormond Beach, summed it up well to the Palm Beach Post:   “I would characterize the storm as a good quiz for the catastrophe plans of all companies doing business in Florida.  It wasn’t a large enough storm to be considered a test but it was big enough to learn a few things and, in that sense, it was valuable.”  Five days post-storm most Florida based insurance companies could have claims payments under $4 million.

Karen Clark & Co. estimated that insured losses from the event will approach $500 million across several states.  The electric lines took the biggest hit from Hermine with 300,000 homes without power after the storm passed.  Tallahassee was a mess.  The trees did our “USA Tree City” in and took the power lines with them.  Two-thirds of the city’s 120,000 power customers were without electricity and nearly all (91%) of coastal Wakulla County to the south was literally powerless.  It was some of the worst damage the area has seen since Hurricane Kate hit in 1985.  A full week later, nearly 500 homes were still without power.

Hermine is not likely to have a significant impact on the financial condition of the Florida Hurricane Catastrophe Fund or Citizens’ Property Insurance, according to Fitch Ratings.  Threats of future storms certainly aren’t diminishing the appetite of private insurers to write more policies either.  OIR recently approved another take-out of nearly 70,000 policies from Citizens.  The state-backed “insurer of last resort” has seen its count plummet from 1.5 million polices a few years ago to 491,000 currently.

If Hermine was the quiz, then we need to be prepared for the real test from a full-blown hurricane, for there are still 10 weeks left to Hurricane Season!


Florida Ranks Near the Top in Entrepreneurship

Florida continues proving itself a hot state in which to start a new business.  A new study by the Kauffman Foundation shows Florida is second only to Texas in the number of new businesses started last year, dropping from the top spot the previous year. The 2016 Index of Startup Activity notes a principal driver of this year’s national uptick is the growth of opportunity entrepreneurship, accompanied by an increase in the rate of new entrepreneurs among women.

Rounding out the top five states after Texas and Florida were California, New York, and Colorado.  Thirty states had increases in the number of business startups and 11 states saw declines.  Among metro areas tracked in the survey, Miami was second to Austin, Texas as a new business mecca.  The study noted that the national rate of entrepreneurship began a rebound in 2014, after four consecutive years of decline.

The report noted Florida had 102 startups (firms less than one year old and larger than one person) per 1,000 employer businesses.  New solo entrepreneurs in whole numbers were not provided in the report but rather as .36% of the adult population of an area that became entrepreneurs in a given month.

Federal Healthcare Plan Rates in Florida to Rise 19%


OIR announced last week it has approved average rate increases of 19% on federal Affordable Care Act (ACA)-compliant health insurance policies in Florida for plan year 2017, with one firm getting a 65% increase and another firm a 6% reduction.  15 health insurance companies submitted rate filings in May for both on- and off-exchange policies.  Open enrollment for the 2017 plan year begins in November.

OIR reports the approved percentages varied by about 2% from the original May requests, with a few exceptions.  The primary reasons OIR cited for this: companies received in June the official risk adjustment numbers from the feds designed to mitigate insurers’ losses; and several insurers decided to write only off-exchange policies in Florida in 2017.  Aetna and United Healthcare earlier this year announced they weren’t participating in the Florida exchanges, part of their substantial nationwide withdrawal.  Humana filed for participation in only a few areas of Florida but did not disclose this information publicly.  The three companies, part of the big-five nationwide health insurers, cited financial losses and said their past three years of ACA experience shows patients coming to the exchanges are older and more expensive to cover and there are not enough young people to offset the costs.  Individual company rate comparison information is available from this release.

Florida is one of the first states to announce rate approvals, which are still subject to final federal review and change. In the Delaware health insurance exchange for example, insurers have requested rate hikes ranging from 24% to 32.5%.  A Kaiser Family Foundation (KFF)  analysis of proposed rates in the 16 states and D.C. that make the information publicly available shows an average premium increase of 9% in the benchmark second-lowest-cost Silver plan, compared to an average increase of 2% in 2016.

With the withdrawal of Aetna, United, and Humana, KFF estimates that 62% of enrollees in 2017 will have a choice of three or more insurers, compared to 85% of enrollees in 2016. 19% of all enrollees, could have a choice of a single insurer in 2017, which is an increase of 2 million people compared to 2016.

Florida has 1.5 million of the total 11 million people enrolled and having paid their first month’s premium on current 2016 exchange plans as of this past March.  That 11 million figure, according to the feds, grows to 20 million when you include people who have received private health insurance on exchanges, those who gained Medicaid coverage under state expansions and young adults who were able to stay on their parents’ health plans until age 26.   According to Census data released last week, Florida’s uninsured population was 13.3 percent in 2015, a 3.3 percentage point reduction from 2014.


President Obama Stops In To Share A Smile With Health Insurers

On the heels of Florida’s health insurance rate hikes, the White House is putting pressure on insurers to stay in the federal healthcare exchanges.  Last Monday, Health and Human Services Secretary Sylvia Burwell, White House Senior Advisor Valerie Jarrett, and Deputy Chief of Staff for Implementation Kristie Canegallo met with representatives from Humana, Cigna, Blue Cross Blue Shield plans, FirstCare Health Plans, Molina Healthcare, America’s Health Insurance Plans, and the Blue Cross Blue Shield Association to encourage the health plan executives to undertake greater participation in the Affordable Care Act (ACA) exchanges. President Obama stopped by to talk with the health insurers as well.  The goal was to find ways to attract young, healthy enrollees in this upcoming 4th year of the plan with open enrollment in November. Representatives from UnitedHealthcare and Aetna did not attend and have recently withdrawn from the ACA exchanges.

President Obama also wrote a letter to all participating insurers which said in part, “I am writing to thank you for the part your organization plays in providing quality, affordable health insurance to millions of Americans through the Health Insurance Marketplace,” Obama wrote. “The marketplace has helped contribute to a record low uninsured rate, and marketplace enrollees report high satisfaction, improved access, and a reduced chance of falling into medical debt.”

The President’s letter went on to say “We know that this progress has not been without challenges.  Most new enterprises have growing pains and opportunities for improvement. The marketplace, while strong, is no exception. Time and experience will help drive that improvement, as will constructive policy changes.”  For more information please see www.healthcare.gov.


Office of Insurance Regulation Report Says 

PIP’s Elimination Can Reduce Premiums

Floridians can save an average Florida motorist 9.6 percent on their liability-coverage packages, or about $81 a year per car, according to a  study by Illinois-based Pinnacle Actuarial Resources Inc that was commissioned by the Office of Insurance Regulation (OIR) The 400+ page study can be found here.   Premiums on personal-injury protection insurance (PIP) coverage dropped 15.1 percent as a result of the 2012 legislative fraud reform bill, HB 119. However, the premium reduction is nearly 10 percent less than targeted and since 2014 it has worsened.

The findings confirm critics contention that the 2012 reform isn’t working, and they are demanding to replace PIP with the already mandated bodily-injury coverage.  The study said that move would save $272 a year per vehicle for motorists in Miami-Dade County, $39 in Escambia County, $28 in Brevard County, $105 in Orange County, $130 in Broward County, $97 in Hillsborough County and $47 in Duval County.

Bills calling for the repeal of no-fault in the 2016 session (SB 1112 and HB 997) didn’t pass.   The 2012 legislation (HB 119) capped non-emergency care at $2,500 and required people seeking PIP medical benefits to receive initial care within 14 days of accidents. Before the passage of HB 119, PIP claims increased 28 percent from 2006 to 2010, with the dollars paid by insurers in that time growing 66 percent, from about $1.5 billion to $2.5 billion.

We will keep you apprised and would love you to share your thoughts  on whether to keep or “flush” PIP.


New And Relaxed FAA Regulations Will Increase Drone Activities

The Federal Aviation Administration (FAA) just recently made effective a new set of agency rules designed to make entry into the world of commercial drone operations much less expensive and restrictive.  Those wishing to start up new businesses that will rely upon the operation of drones to perform services for customers will no longer be required to personally obtain an expensive and time consuming pilot’s license. The new FAA regulations will, as an alternative to initially established requirements, merely mandate drone registrant applicants to successfully pass an FAA approved aeronautical knowledge test. The FAA believes that within a year of the new rules becoming effective, the number of commercial drones operating in U.S. airspace will increase from an existing 20,000 to perhaps over 600,000.  To be certain, this would represent a dramatic increase in the number of drones conducting business operations over many, if not most cities and some local officials in Florida and elsewhere are wondering about public safety, among other issues. In fact, the UAS Association of Florida, which represents commercial unmanned aircraft interests, says about twelve localities have considered putting draft ordinances before their city or county commissions for consideration. Checking around a few of Florida’s largest local governments, however, reveals that no drone-related ordinances are pending before the Tampa City Council or the Hillsborough County Commission. Pinellas County government previously enacted a prohibition against drone flights over county-owned and managed land except when operators obtain authorization in advance. Another example of local government regulation of commercial drone operations is in the City of Palm Beach where permits are mandated for commercial operators. In addition, Palm Beach requires commercial operators to possess liability insurance in the amount of $1 million before it can register with local officials. The liability insurance requirement is not an FAA requirement and some stakeholders and other observers have expressed concern whether local ordinances can impose such requirements on an activity already regulated by the federal government. As the regulation of drone activity begins to heat up, LMA will closely monitor what’s occurring in Congress as well as Florida and keep you well up-to-date regarding developments.


Happy Anniversary to Lisa Miller & Associates! (LMA)

I’d like to take this opportunity to thank each of you for the support and inspiration you provide my colleagues and me as a part of this tremendous industry.  This week is my 9th anniversary of opening LMA and we have never looked back.  As many of you know, it’s my goal is to work ourselves out of a job because when we do that we have solved problems, connected the right folks to make something positive happen, or made something or someone’s life better.  We can’t ask much more than that, and our success is your success. We work for YOU and cheer you on every day, and we will never forget those who have been with us and are a part of our world as our journey continues.  My best to you, and see you on the trail!

Lisa Miller


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.


Upcoming Events

September 22-23
THF 2016 Insurance Conference on Financial Reporting 
Alfond Inn
Winter Park, FL

October 1-4
NEMA 2016 Annual Forum
Hyatt Regency
Chicago, IL

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