• Do what you say you are going to do
• Judge a person by their friends
• You don’t have to be the smartest, you just have to want it the most”
So, with those words of wisdom, we kick off this as our first of the LMA’s Summer Series–
“Partners In Recovery” In The Summertime Spotlight
We are very excited to begin our “Summer Spotlight Series” in this edition of the newsletter. As we mentioned in our last newsletter, this edition is spotlighting the organization, “Partners in Recovery” (PIR). PIR is a Florida-based organization made up of members who are insurance claims executives from around the globe who share ideas and strategies to be prepared for hurricane season, most of whom are heavily involved in Florida’s property insurance marketplace. LMA is a proud participant and supporter of PIR and we want you to know and understand its’ important work.
PIR also represents a unique partnership between the Florida Insurance Council (FIC), The Florida Department of Financial Services (DFS), The Office of Insurance Regulation (OIR) and the Florida Office of Emergency Management. PIR was formed following Hurricane Andrew in 1992, when the Insurance Commissioner arranged a meeting of insurance company CAT adjuster supervisors to discuss possible improvement in claims payments following a disaster. As a result of much hard work and great ideas from PIR’s participants in the early years, one of the permanent goals adopted by the organization is to expedite the payment of claims following disasters in Florida. One of the main keys to PIR’s success is the sharing of critical disaster related information among all participating organizations allowing each “partner” to best serve their constituents. The main functions of the partnership are:
• Early access utilizing pre-approved SERT badges to expedite insurance adjusters entry into limited access areas in order to adjust and pay claims;
• Early damage assessment; the insurance industry works in coordination with DFS, OIR and the State Emergency Operations Center (EOC), to conduct fly-overs of the damaged areas and communicate insured damage assessments;
• Ensuring a property insurance EOC presence, professionals from the insurance industry staff an assigned seat in the EOC among the 30 or so seats representing the various industries in Florida. The property insurance EOC volunteers develop and send frequent communications via the internet to the insurance industry and insurance responders expediting the recovery process.
• Close coordination with the Department of Financial Services, including, the CFO’s office, Division of Consumer Services (including the help-line – Estorm process), Division of Agent and Agency Service (Licensing and Enforcement), the Department Emergency Coordinating Officer, and the Office of Insurance Regulation.
• Triggering of PIR’s Post Disaster Coordination Program headed by Tallahassee’s Jim McCloy. Representing the insurance industry, Jim, a strong leader, is dispatched to the disaster area where he facilitates a coordinated relationship between insurers, regulators and emergency managers that help ensure expedited claims settlement for disaster victims.
• Activation of PIR’s early damage assessment process which provides industry Partners with information on the extent and severity of the disaster. The early damage assessment process is also headed by Jim who interacts with the Division of Emergency Management to provide critical information on road closures, dangerous situations and emergency shelters housing hurricane victims. Such information is critical to the industry and its adjusters working in the damaged areas.
Partners in Recovery meets annually during the month of May to provide updated recovery process information and to critique its’ activities from the past year. The meeting is open to insurance industry personnel and the vendors who support them during the recovery process. The vast majority of insurance companies writing homeowners’ insurance in Florida are represented at this important annual meeting. As mentioned above, a number of entities critical to the insurance recovery process, as well as vendors attend. These attendees include independent adjusting firms, housing specialists, restoration contractors, reconstruction contractors and volunteer organizations. The state of Florida is extremely fortunate to have an organization such as PIR. It is an outstanding partnership between the insurance industry and government agencies having a common goal of helping Florida homeowners and business owners receive expedited claims settlement assistance and recover from disasters as rapidly as possible.
Emergency Adjuster Licensing – Be Prepared
While we were on the road last week visiting our friends/colleagues/clients and attending important industry events, the 2013 Atlantic Hurricane Season arrived with its first tropical storm Andrea. We were traveling in the rain and wind, trying to get back to Tallahassee when Andrea came on shore, bringing flooding from the Gulf. We all have heard that this season will be a big one for tropical weather
and Andrea didn’t waste any time after the season started on June 1. In surveying much of the published information about this season, we particularly noted most reports indicated that sufficient capacity exists in the reinsurance markets to provide effective coverage and deal with losses resulting from the 2013 storm season. With this said, however, the most respected forecasting services (NOAA, Colorado State University & Tropical Storm Research) all predict above average hurricane activity in the North Atlantic Basin this season as a result of various environmental factors. We are all asking ourselves, “Can Florida really go another year avoiding damage from one or more hurricanes?” I guess we’ll see. Preparation is always the key in responding to adverse events and for our clients who may need to utilize the services of emergency adjusters should a storm impact the state, please remember it is the Appointing Entity (insurance companies and independent adjusting firms) that must electronically submit emergency adjuster applications to DFS, not the individual(s) being licensed. As a reminder, we are providing the following link to the DFS rule that provides the instructions when applying for emergency adjuster licenses. After opening the web page, click on the Word symbol for the first rule appearing in the list. The rule is titled, “69B-220.001, Licensure of Emergency Adjusters.”
https://www.flrules.org/gateway/RuleNo.asp?title=ADJUSTERS&ID=69B-220.001
Fraud Division Makes Arrests For Unlicensed Public Adjusting
Last month the Department’s Division of Insurance Fraud arrested three employees of a Jacksonville-based roofing firm, “Roofmasters, Inc.”, for acting as unlicensed public adjusters while soliciting homeowners for roof repairs in the Capital City area. Those arrested were Derek Shawn Kellog, 31, Crawfordville; Corey Jermaine Brownlee, 30, Jacksonville; and Sean McCaslin, 49, of Tallahassee. According to the Department’s press announcement, an investigation by the Division of Insurance Fraud revealed that Roofmasters, Inc., based in Jacksonville, allegedly used high-pressure sales tactics and informed homeowners they were “insurance specialists” and could assist them in dealing with their insurance companies. Company literature notes that homeowners may be entitled to a new roof with no out-of-pocket expense. According to the Fraud Division’s report, Roofmasters, Inc., submitted an insurance claim on behalf of a homeowner, violating Florida law. Kellog, Brownlee and McCaslin were booked into Leon County Jail. If convicted, they each face up to five years in prison.
These arrests remind us to remind our readers that unlicensed public adjusting constitutes a 3rd Degree Felony in Florida and we encourage you to report suspicious claims filing and settlement activity on behalf of insureds by unlicensed persons to the Department’s Division of Insurance Fraud.
South Florida Agent Arrested In Alleged Commission Scheme
On May 21 in West Palm Beach detectives with the Department of Financial Services’ Division of Insurance Fraud arrested Port St. Lucie insurance agent Frederick E. Tanner for allegedly obtaining more than $15,800 in commissions from AFLAC by submitting false insurance applications. DFS information shows that Tanner was arrested on aggravated grand theft and 139 counts of insurance fraud stemming from the supposed submission from 2010 to 2012 of nearly 140 policy applications for businesses containing fake names, employment records and contact information. Detectives say that Tanner used the State Division of Corporation’s web site known as, “Sun-Biz” to locate business names for submission to the insurance company and once approved; applications with incorrect information were submitted. According to AFLAC, it never received premium payments from Agent Tanner’s alleged insureds and in January became suspicious that it had been defrauded. During April, detectives with the Fraud Division obtained information indicating that several businesses the agent allegedly submitted for carrier approval never actually obtained a policy through Tanner. As part of the investigation, Tanner met in late April with detectives where he admitted to submitting the fake applications to AFLAC. After being booked into the Palm Beach County Jail on May 21, the agent remained until being released on the afternoon of May 22 after posting bail in the amount of $12,000.
As we can see from the several issues we reported above, fraud is such an issue for Florida. We know that our folks at the Division of Insurance Fraud, along with the dedicated folks in the industry, work hard EVERY day to do their part to wipe out this very bad mark on a hard working industry. We are right in the middle of that hard work here at LMA and spend many hours doing what we can to make things better. We count on you to support our work and help us stay focused on this important goal, fighting the insurance costs drivers that harm our policyholders.
PIP Litigation: Legislature Could Act Before Court Battles Conclude
Many of our readers, along with those of us at LMA, are keeping a close eye on the on-going, but narrow legal battle being played out in Florida courts over PIP reforms passed during the 2012 Legislative Session. At this point, the largest question appears to be whether an injunction currently exists and if so, how geographically far reaching. Others contend, particularly some insurers, that even if an injunction exists against certain of the reforms it only applies to the OIR because no insurers were named as defendants in the underlying lawsuit. Is this enough to make your head spin? As most will recall, on March 15th Leon County Circuit Judge Terry Lewis struck down portions of Florida’s new no-fault auto insurance law (2012′ House Bill 119) designed to lower premiums and combat fraud in the personal injury protection (PIP) system. The injunction also applied to certain prohibitions or limits on treatment by message therapists, chiropractors and acupuncturists. The Office of Insurance Regulation filed an appeal of the Lewis Order which resulted in an automatic stay of the injunction. On April 17 at the request of the plaintiffs in the underlying lawsuit, Circuit Judge Lewis entered an order vacating the automatic stay. This action arguably resulted in the stay against implementation of PIP reforms noted above being reinstituted.
A couple weeks ago, the First District Court of Appeal granted a motion filed by the OIR and Attorney General Pam Bondi. The court granted a Motion for Review of Order Vacating Automatic Stay and Request for Expedited Treatment. Under the granted motion, the 1st DCA will only be considering and ruling on whether the Circuit Court injunction is valid. Because the DCA agreed to consider this matter on an expedited basis, it will likely hold oral arguments during early summer and may issue its decision on whether an injunction exists against the implementation of particular PIP reforms by the fall. Regardless of which side (the State or plaintiffs in the underlying law suit against the PIP reforms) wins this legal round, the loser will likely appeal to the Florida Supreme Court. One thing is pretty much certain, the legal wrangling over the validity of the injunction and whether Judge Lewis had the authority to lift the automatic stay could take considerable time, perhaps well into 2014. Many also believe that after a final decision is rendered on the validity of the injunction a trial must be held on the merits of the underlying law suit. Such a trial would occur in the circuit court and the result would likely be appealed.
Where things stand right now is that there seems to be general agreement that the Lewis injunction against implementation of 2012 PIP reforms encompassing sub-limits and restrictions/prohibitions on treatment by chiropractors, acupuncturists and message therapists is in effect until the DCA issues its ruling. For the time being, most major trade associations are recommending to member companies that they seek guidance from their own attorneys as to the extent of the injunction and where geographically in the state it applies. The legal battles over PIP reform could take years to conclude and It’s likely doubtful the Legislature will wait that long. David Simmons (R-Seminole/Volusia), Chairman of the Senate Banking and Insurance Committee said after session that he would be monitoring the PIP battle in the courts. If he and enough other legislative leaders grow weary of protracted litigation they could take action in a special session or the upcoming regular session to repeal PIP and replace it with mandatory BI coverage. This is exactly what Sen. Simmons attempted to do this past session but he was unable to generate sufficient legislative interest and cabinet level support. We’ll continue monitoring the PIP saga and keep you posted.
Like The CAT Fund, Citizens In Good Shape At Beginning Of Storm Season
On May 29 the Citizens Depopulation Committee held a meeting in 212 Knott Building, part of the Capitol Complex. The meeting focused less on pending depopulation proposals and more on what Citizens has accomplished in the past 24 months and the future potential for enhanced depopulation of the state run insurer. Citizens CEO Barry Gilway began his opening comments by noting that when he joined Citizens a little over a year ago the corporation was growing by 8,000 new policies a week and by about 360,000 policies per year. Gilway further commented that thanks to the leadership of Chairman Carlos Lacasa and other key leaders, during the past 24 months Citizens has been successful in negotiating the take-out of about 430,000 policies and the corporation’s exposure has been reduced by $130 billion. Additionally, it was also noted during the meeting that private reinsurance and the procurement of catastrophe bonds have helped contribute to Citizens’ overall financial picture and perhaps place the corporation in the best financial condition ever. The corporation’s CEO also stated that he believes there remain huge opportunities for further depopulation with the upcoming implementation of SB 1770 and the establishment of the Clearinghouse. Data presented at the meeting indicated that Citizens has about 719,000 personal lines policies, 59% of those policies having a combined loss ratio of 100 percent or less while 41 percent of the policies have a combined loss ratio of over 100 percent. Citizens believes this shows that 59 percent of the personal lines policies currently in existence are valuable and should look attractive to future take-out companies. During discussion on this issue CEO Gilway noted past criticism that take-out companies often “cherry-pick” the best policies. He went on to comment that take-out companies should remove the best policies because Citizens should only be insuring risks that cannot be written in the private market. Also of interest during the meeting was a question about future of the Surplus Note program. Mr. Gilway responded that with the take-outs Citizens expects to occur this coming November and December, along with the establishment of the Clearinghouse program, they do not feel going forward with the program would be appropriate.
Latin American Association of Insurance Agencies Set For Convention
On July 16-20, The Latin American Association of Insurance Agencies will hold its 43rd annual convention in Miami at the Doral Golf Resort and Spa. Alexander Dopazo, Association President-Elect, wants us to remind our readers that this year’s convention will present another outstanding opportunity for companies to show their support for the LAAIA and the work its members do every day to support company products through a strong independent agency system. As mentioned in our last newsletter, we recently met with the Association while visiting Miami and were reminded of just how excited they are about our industry and the work we do together as a team. If you would like to reserve an Exhibit Hall Booth or engage in other sponsorship activities, you can contact the Association’s Executive Manager, Soraya Regalado at 305.477.1442 or via email at [email protected]. For more information on the convention, click HERE . For sponsorship information, click HERE.
DFS Requesting Assistance; Needs Subject Matter Experts to Review Licensing Exams
The Florida Department of Financial Services will soon begin the process of reviewing its agent and adjuster licensing exams as it does on an annual basis. All exams for the major license types (General Lines, Life, Health and Variable Annuity Agent, as well as the Title Agent and Bail Bond Agent exams will undergo careful review. The major adjuster exams will also be reviewed during the same endeavor. The purpose of the exam review process is to ensure that all licensing exams are fair, valid and contain no items that could be biased. During this month PearsonVue, the Department’s examination contractor, will begin conducting on-line webinar meetings to initiate the exam review process. The review effort will conclude with an on-site meeting July 15-19 at the Embassy Suites, Downtown Orlando. If you or a member of your team holds one of the license types indicated above and would like to dedicate a relatively small amount of time to help keep Florida’s licensing exams of the highest quality, please send an email expressing your interest to [email protected] . In the email, please include your name, contact information and the type(s) of license you hold. The Department will immediately notify PearsonVue of your potential interest and you will be contacted.
Hurricane Loss Projection Methodology Commission Meeting This Month
The Florida Commission on Hurricane Loss Projection Methodology will hold a three day meeting in Tallahassee June 18-20. We have posted the official meeting agenda on our website and you may view the agenda by clicking the following link, June Agenda.The Commission has also provided LMA with a revised meeting schedule for the 2013 calendar year. We have also posted this information on our website so please click the following link to view the revised schedule:LMA Upcoming Events. If you would like additional information regarding Commission meetings and activities, please call Ms. Donna Sirmons at (850) 413.1349.
With a Weekend break at Home, We’re off Again
Just so you’ll know where we are over the next two weeks, we are at the Florida Insurance Council conference in Ft. Lauderdale June 9-11; the Division of Emergency Management (DEM) Private Sector Disaster Preparedness Summit in Orlando June 11-13; the Florida Hurricane Catastrophe Fund Participating Insurers Workshop in Orlando June 13-14; and last but not least, the Florida Association of Insurance Agents (FAIA) Annual Convention in Orlando June 20-22. Of course, during all this important functions, we get to visit with so many of you and just love it. We sure hope lots of our friends/colleagues/clients plan to attend as many of these events as possible. Obviously, I can’t be in two places at once, so my teammates at LMA join the roadshow so we can cover as much as possible.
We will be back in a couple of weeks. Be safe out there and thank you for all you do!
Warmest Regards, Lisa
