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Monday May 13, 2013 |
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One Week Later |
| By now we have all caught our breath and refreshed our minds. As we look back at the 2013 session, we also look forward to the job ahead. But, before we set our sights on what we need to do next, we dedicate this newsletter to the “wrap-up” that we promised. We’ll briefly touch on the bills we closely monitored, reported on and will let you know which bills passed. We’ll also share some thoughts and insight on those bills we all fought so hard for but for one reason or another, just couldn’t push over that jagged political mountain to passage. So, as you read our wrap-up, be thinking about the things you would like to address during the 2014 legislative session — new items and those we will fight for again. Since we all know that well laid-out plans are the major keys to success in the legislative endeavor, let’s talk early and often about your concerns. Remember that your priorities are our priorities! |
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Citizens Reform Took Center Stage; Passed |
For much of the legislative session the dilemma over how best to reform Citizens Property Insurance Corporation garnered tremendous attention from leaders and key players in the House, Senate, and Governor’s office and elsewhere, while state-wide media had a field day with the issue. Considering the major importance of Citizens to Florida’s homeowners, business interests and the overall economy, it is no surprise that the debate was long and at times, painful. The House and Senate had largely different views on how best to accomplish reforms as reflected in HB 909, sponsored by Rep. John Wood (R-Polk) and SB 1770, sponsored by Sen. David Simmons (R-Seminole/Volusia). Ultimately, SB 1770 made final passage in the Senate with the majority of its more tough, “actuarially sound” rating language removed and most of the provisions of HB 909 amended into the bill by the more “anti-rate shock” concerned House. In fact, it’s been said that an agreement was brokered between the two chambers to win the Senate’s support of the substantially amended SB 1770. That deal involved the House’s agreement for next session to re-address the actuarial soundness of Citizens’ rates statewide, particularly rates for wind-only policies issued in the riskiest areas of the state. Please refer to our newsletter of Monday, May 6, for a comprehensive list of the major components contained in SB 1170. We have, however, included a short list of the components:
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Manufactured and Mobile Homes to Be Covered by Citizens |
| Another Citizens related bill which secured final legislative approval was CS/CS/CS/HB 573, sponsored by Representative Ed Hooper (R-Pinellas), requiring Citizens to provide coverage on manufactured and mobile homes. The bill also requires Citizens to make policies available covering these homes at a minimum insured value of $3,000. During the committee process the bill was amended to require Citizens to also provide coverage for structures attached to manufactured and mobile homes, such as screened enclosures, carports, patios, awnings and the like. It was learned via public testimony that many, if not most, manufactured and mobile home park owners require the existence of these attached structures for aesthetic and consistency reasons; therefore, homeowners have no choice but to install them. Even so, during a committee meeting Representative Matt Gaetz, (R-Okaloosa) requested an assurance that Citizens would charge actuarially sound rates in extending coverage to manufactured and mobile homes and for taking on the additional exposure of covering attached structures. Citizens spokesperson Christine Ashburn assured Rep. Gaetz and the committee that the Citizens Board had already voted to charge actuarially sound rates for manufactured and mobile homes. |
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Insurer Employee Salary Tax Credit Survives Repeal Effort |
| In what seemed like a session-long battle between the insurance, business community and House on one side and the Senate on the other, the last day of session concluded with the hard-fought survival of the insurer salary credit on insurance premium tax. The effort to repeal the salary credit was championed in SB 1832 by Senate President Don Gaetz, Senate Appropriations Chairman Joe Negron, Senate Rules Chairman John Thrasher and additional Senate leaders, much to the surprise of many observers who were puzzled by the push to remove a tax credit designed to incentivize job creation! It was even more puzzling when the rationale discussed by these senators to eliminate the tax credit was to use the resulting revenue (estimated at about $220 million annually) to offset the rollback of increased vehicle registration fees from 2009 when cost estimates reflected that the fee reduction would be about $12 per Florida driver. Thankfully House Speaker Will Weatherford and other key House leaders saw the irrationality of the Senators rationale and poor public policy. Those of us representing the industry and keeping good jobs in Florida made it very clear that the tax credit elimination would be a deterrent to insurance capital and other insurance investors wanting to invest in our state, not to mention the damage to existing employment and future job growth which would have resulted. The Senate even attempted one last ditch effort very late in session when it amended the salary tax credit repeal bill onto HB 635 sponsored by Rep. Katie Edwards, (D-Broward), the House Insurance Omnibus legislation containing numerous issues supported by many segments of the industry. This was obviously a maneuver by the Senate to force the industry and House to agree to the salary tax credit repeal or see the insurance omnibus bill fail. By early Friday evening (last day of session), it was obvious that the House would not hear the omnibus bill (HB 635) and it died when session ended shortly after 7:00 p.m. This win for the industry certainly came at a cost; however, preservation of the salary tax credit was essential to Florida’s new and growing economy. |
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Legislature Imposes Additional Provisions on Public Adjusters |
When the House amended most of what was contained in its property insurance reform package, HB 909 sponsored by Rep. John Wood (R-Polk), into SB 1770 addressing Citizens, it included several very important provisions addressing the conduct of public adjusters. Although one of the provisions leveled the playing field on the fee public adjusters can charge when handling Citizens claims (last bullet point below), the remaining provisions provide additional much needed consumer protections. The key provisions addressing public adjusters contained within SB 1770 as passed by the Legislature are as follows:
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DFS Holds Hearing on Adjuster Rules |
| On Thursday, May 9, the Department of Financial Services, Division of Agent & Agency Services conducted a rule hearing regarding its proposed amendments to rules which govern the conduct of public adjusters and public adjuster apprentices, as well as those addressing the code of ethics for all types of adjusters (company, independent and public). The rules being amended are 69B-220.051, F.A.C. and 69B-220.201, F.A.C., respectively. Early this week we will communicate with you further on this important issue, provide you with an overview as well as the Department’s proposed amended rule language and seek your formal comments. |
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Speed-To-Market Endeavors Succeed, Reach Final Passage |
| There were several bills filed this session addressing “speed-to-market” issues. Bringing rate filing reform to most lines of medical malpractice insurance among them, in addition to more leniencies in the use of health insurance marketing materials for certain lines and reforms added for commercial policy forms.
SB 468 sponsored by Sen. Dorothy Hukill (R-Lake, Marion and Volusia) further deregulating commercial lines products requiring advanced form and rate approval by the Office of Insurance Regulation (OIR). The additional lines exempt include medical malpractice coverage for a facility that is not a nursing home, assisted living facility or hospital; as well as medical malpractice coverage for practitioners who are not physicians, dentists, chiropractors or podiatrists. The bill also establishes an alternative process to the form filing and approval requirements in the Insurance Code for all lines of property & casualty insurance, with the exception of personal lines and workers’ compensation. Insurers may also choose to certify that their forms comply with Florida law and forego the normal filing and approval process within the Code. OIR may still disapprove filings if they are found to be in non-compliance. SB 648 sponsored as well by Sen. Hukill also reached final legislative approval. This bill essentially provides deregulation for the advanced OIR approval of health insurance plan marketing materials. Insurers marketing Standard Health Benefits Plans, Basic Health Benefit Plans, Limited Health Benefit Plans and Long-term Care insurance plans may immediately begin using marketing materials upon filing with the OIR, subject to subsequent disapproval by the OIR. If an insurer were to later receive a notice of disapproval or a withdrawal of approval, the insurer must immediately cease use of the disapproved marketing material. |
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Insurers Will Have Options Regarding Delivery, Posting of Policies, Forms & Endorsements |
| The Senate gave final passage to HB 157 sponsored by Rep. Doug Holder (R-Sarasota). This bill adds “electronic transmission” to the list of policy delivery methods contained in current law (s. 627.421, F.S.) and makes it clear that such transmission of policies for commercial risks (including workers’ compensation, employers’ liability, commercial automobile and commercial residential property) constitutes official delivery unless the insured, or other person entitled to delivery, communicates to the insurer, in writing or electronically, that he or she does not agree to delivery by electronic means. The electronic transmission of a policy must contain a notice of the insured’s right to receive the policy via United States mail. Further, a paper copy of the policy must be provided to the insured upon request.
The Senate also gave final passage to CS/HB 223 (Rep. Larry Lee, Jr. D-St. Lucie and State Farm agent), which will allow insurers to post property & casualty policy forms and endorsements to their web sites, thus saving postage costs. Policy forms and endorsements posted on insurer websites cannot contain any personally identifiable information about a consumer. The forms and endorsements posted shall remain for as long as the policies and endorsements continue in force, and must also be posted in a manner that allows consumers to print and save such documents. Insurers must notify its policyholders that a paper or electronic copy may be obtained upon request. |
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Multi-Year Battle Over Drug Re-packaging in Workers’ Compensation Ends with Deal |
| A four year debate over the propriety of workers’ compensation physicians’ in-office dispensing re-packaged, highly marked-up medications to injured workers came to a negotiated end this session with the passage of SB 662 sponsored by Sen. Alan Hays (R-Lake, Marion, Orange and Sumter). The battle had involved workers’ compensation insurers and employer groups on one side and drug re-packagers and more recently the state medical association on the other. The bill limits what doctors can charge when they in-office dispense medications to workers’ compensation patients. Doctors may charge 112.5% of drugs’ average wholesale prices (AWP) and $8.00 dispensing fees. The National Council on Compensation Insurance (NCCI) estimates the legislation will reduce workers’ compensation costs by $20 million annually and 0.7 percent. There are others, following the drug repackaging debate, who believe these changes will be “backfire” and give all physicians impetus to get in the drug repackaging business, so the volume of doctors entering this practice will lead to greater costs and drive up work comp rates. So, for example, it is estimated that less than a 100 or so physicians dispense drugs using drug repackaging software, etc. That number is expected to grow as a result of this legislation. |
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Workers’ Compensation “Wrap-Up” Policies Become Reality |
| SB 810, sponsored by Sen. David Simmons (R-Seminole/Volusia), establishing workers’ compensation wrap-up policies reached final passage in late session. The wrap-up policies will apply only to large, non-public construction projects where project owners or general contractors will procure policies covering all contractors, sub-contractors and other parties performing work on projects. Access to such policies will be restricted to non-public construction projects with an estimated total cost of $25 million or more to include large deductibles for workers’ compensation claims when the combined standard premium for all covered entities, when aggregated, exceeds $500,000. |
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Medical Malpractice Insurance and Expert Witness Reforms Succeed |
| SB 1792 by Sen. Tom Lee (R-Hillsborough) changes the law in three areas related to medical malpractice liability. The bill addresses the issue of “ex-parte” communications between treating physicians who are not being sued and attorneys for physicians who are named in law suits. The bill also nullifies the case law known as “Hasan” to make certain that non-defendant physicians can seek legal counsel through their own liability insurers. An additional provision was added to prevent carriers from contacting physicians to encourage the retention of counsel and carriers may only recommend particular lawyers if first contacted by their policyholders. SB 1792 also makes it clear that expert witnesses in medical malpractice cases must be in the same specialties as physicians being sued.
Also passing the legislature was HB 7015 by Rep. Larry Metz (R-Lake). This bill changes Florida’s standard and criteria for the admissibility of scientific evidence and expert testimony from the existing Frye standard to the Daubert standard. The Daubert standard, believed to be superior, has been used in federal courts and most other states for some time. |
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What Didn’t Pass….Looking To Next Session |
| Agency Rule Challenge Legislation
In several of our newsletters we updated you on bills that would have shifted the burden of proof away from business folks to state agencies when administrative rules or agency statements are challenged. CS/SB 1696 sponsored by Jeff Brandes (R-Hillsborough/Pinellas), passed the Senate Governmental Oversight and Accountability Committee on April 16 and CS/HB 1225 sponsored by Janet Adkins (R-Nassau/Duval) made it through its last committee stop. While this legislation didn’t receive the attention of many of the other subjects of this years’ Session, it was a very important bill for regulated businesses in Florida. Unfortunately, the Senate bill died in the Judiciary Committee and the House bill did not make it to third reading on the floor. We certainly hope to see this business-friendly legislation filed again next session and will do everything we can to see it succeed.
PIP Reform There are growing indications that PIP reform may become a significant issue for the 2014 Session. It became clear, not long after Sen. David Simmons (R-Seminole/Volusia), Chairman of the Senate Banking and Insurance Committee, filed SPB 7152 this Session to repeal Florida’s current PIP statute and instead require mandatory BI coverage, that there was little appetite from the Governor, CFO or insurers to move forward with such a plan. All signaled publically that the PIP reforms contained in last year’s HB 119 needed more time to be fully realized and SPB 7152 went no further. Interestingly, however, late this Session there was an effort by some lobbyists and senators, to add back into law message therapy and acupuncture services as valid claim components and pain clinics being among valid service providers. The vehicle was used for this effort was SB 966 sponsored by Sen. Aaron Bean (R-Nassau/Duval), which failed to reach final passage this Session. The attempt here is a good indication that sentiment exists to reverse some of the PIP reforms enacted with 2012’s HB 119. Major issues like FIGA assessment reform and Cat Fund reform died and/or got caught up in committees and couldn’t budge. There will be renewed interest in these topics in 2014 with both sides of these topics readying for the debate. Discussions for 2014 topics will most likely begin as early as June so we invite your feedback! |
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What’s Next at LMA |
| Are we exhausted??? Absolutely not! In fact, we are energized. But, we won’t sugar coat the truth and that truth is that we’ve been burning the candle at all ends. Whether working the halls for 12 plus hours a day, countless rush meetings with legislators relaying your positions and concerns, closely monitoring committee meetings, enjoying the many hours on the phone with you discussing the critical issues, and last but not least, the late night strategy sessions planning for the next day, we were “working it.” It was all great FUN and certainly it is what makes us tick tick tick at LMA. We consider it a privilege to participate in the legislative process on your behalf. Nowhere else in the world is there a political system as ours and it wouldn’t exist today without the blood, sweat, and tears shed by our early founders to make a better place for us to live, work and thrive. They knew then and we know today that the spirit of innovation and the engine of business are the cornerstones of our democracy and political system. Without you and the economic energy you and your teams produce each and every day, the freedoms and political system we so dearly love would not continue to exist. So, we honor you and extend our deepest appreciation for allowing us to represent your interests before the Florida Legislature.
With that said we will be spending lots of the summer visiting you all; enjoying face-to-face time discussing your passions about our great state and how we together can make it even better. Our weekly newsletter will become bi-weekly and will continue “events and visits” information for you to read and enjoy.
So, until you hear from us in our next publication on May 27, stay safe and in touch. Happy summer and best wishes always, Lisa |
