Colodny Fass Featured in Federation of Regulatory Counsel December 2011 Update
Dec 29, 2011 | By Colodny Fass
Colodny Fass attorneys were featured contributors to the Florida section of the Federation of Regulatory Counsel’s (“FORC”) December 2011 “FORC Alert.” To view the publication, click here. The articles are reprinted below.
Florida Office of Insurance Regulation Approves 8.9 Percent National Council on Compensation Insurance (NCCI) Rate Increase Request, Effective January 1, 2012
The Florida Office of Insurance Regulation (“OIR”) issued a Final Order on October 31, 2011 regarding an 8.9 percent rate increase requested by the National Council on Compensation Insurance and approved by the OIR on October 24. The OIR issued the following statement:
“On October 26, 2011, the Office received a rate filing from the National Council on Compensation Insurance (NCCI) that modified its original filing of August 18, 2011. The modified filing includes changes referenced in the Office’s order issued October 24. Today, the Office has issued an order approving this modified filing.”
The rate increase is effective January 1, 2012 for workers’ compensation insurance rates in Florida. To view the Final Order, click here.
Florida Insurance Commissioner Kevin McCarty Elected President of the National Association of Insurance Commissioners (NAIC)
Florida Insurance Commissioner Kevin McCarty was elected 2012 President of the National Association of Insurance Commissioners (“NAIC”) on November 4, 2011. Outgoing NAIC President and Iowa Insurance Commissioner Susan Voss announced that Commissioner McCarty will officially ascend to the NAIC presidency effective January 1, 2012 and continue to serve as President-Elect of the NAIC through 2012.
“It is an honor and privilege to be elevated by my colleagues and to this leadership role,” remarked Commissioner McCarty, “Over the next year we must confront several important challenges. Whether it is Dodd-Frank or the Affordable Care Act, the federal government has become increasingly involved in the insurance arena. As your president, I intend to vigorously defend the role of state-based regulation, highlight our accomplishments, and continue to work for regulatory modernization and national uniformity to create an insurance framework that benefits both consumers and the insurance industry.”
Florida Hurricane Catastrophe Fund Issues 2011-2012 Reimbursement Contract Year Estimated Borrowing Capacity, Estimated Claims-Paying Capacity and Projected Balance as of December 31, 2011
The Florida State Board of Administration (“SBA”) issued a statutory advisory on October 26, 2011 in regard to the Florida Hurricane Catastrophe Fund’s (“FHCF”) estimated borrowing capacity, estimated claims-paying capacity and projected balance as of December 31, 2011 in relation to the FHCF’s 2011-2012 Reimbursement Contract Year. The FHCF’s projected post-event borrowing capacity estimate is $8 billion for October 2011. Given the current state of the financial markets, this estimate is dependent on many factors, such as the size of an event or events, the limitations or constraints of the financial markets to absorb potential debt issuances, the time necessary to access such markets and the existing level of interest rates at the time of issuance. The estimated borrowing capacity and projected available year-end cash balance provide the FHCF with a total estimated claims-paying capacity of $15.170 billion over the next 12 months. Click here to see the complete October 18, 2011 Claims-Paying Capacity Estimate Report.
The FHCF’s projected year-end balance on December 31, 2011 is estimated to be $7.170 billion, which represents the amount of assets available to pay claims, not including any bond proceeds, resulting from Covered Events that may occur during the June 1, 2011 through May 31, 2012 FHCF Contract Year.
Florida Division of Workers’ Compensation Announces Enhancements to Construction Policy Tracking Database –
The Florida Division of Workers’ Compensation advised on October 27, 2011 that it has made enhancements to its Construction Policy Tracking Database that will allow interested parties to track contractors’ Certificates of Election to be Exempt, as well as workers’ compensation policies. Registered Database users can receive an automatic e-mail notification of any changes in a contractor’s coverage or exemption status.
Florida Senate Committee on Judiciary Released Interim Report 2012-132 on Insurance Bad Faith
The Florida Senate Committee on Judiciary released Interim Report 2012-132 on Insurance Bad Faith on November 16, 2011. The Report outlines related current practices based on the experiences of legal practitioners, insurance companies and others with expertise in insurance bad faith. It also reviews case law, statutes, legal scholarship and data associated with bad faith in Florida and other jurisdictions in order to give legislators a basis for evaluating what potential changes to Florida law are needed, if any. The Report concludes that Florida’s current Bad Faith Law is a complicated combination of statutory and common law that affects a number of varied interests, and thus sparks philosophical, economic, and policy debate from different perspectives. According to the Report, while some argue that Florida’s Bad Faith Law offers important and properly balanced protections to insurance consumers while remaining fair to insurers, others insist that the law’s valid intentions have been distorted by excessive litigation and unfair gamesmanship, making it difficult for insurers to settle claims.
While the Report presents information on the legal landscape for insurers, insureds and third parties, it does not offer specific recommendations for legislative action on bad faith. Rather, it recommends a “policy decision” for the Legislature to consider whether the current law is being applied as intended to effectively encourage good faith settlement practices and should remain unchanged, or whether the current system encourages abuse and should be changed.
To view the entire Report, click here.
Florida Commission on Hurricane Loss Projection Methodology Completes Revisions to Acceptability Standards
After several hours of detailed review on November 16, 2011, the Florida Commission on Hurricane Loss Projection Methodology (“FCHLPM”) approved a long list of revisions to the 2009 Standards to Determine Acceptability (“Standards”). The final version of these Standards will become the 2011 version, which must be formally published by December 31, 2011.
Florida Cabinet Reviews Citizens Property Insurance Downsizing Recommendations
At the Florida Cabinet meeting on December 6, 2011, Citizens Property Insurance Corporation (“Citizens”) Chairman of the Board of Governors (“Board”) Carlos Lacasa made a presentation to the Financial Services Commission in which he outlined the Board’s recommendations for reducing Citizens’ size and exposure as requested by Florida Governor Rick Scott. To access the report, click here.
Florida Department of Financial Services’ Division of Consumer Services Instructs Neutral Evaluators on SB 408 Sinkhole Claims Changes
Upon further review to the recent amendments to Florida’s neutral evaluation program made by SB 408, the Florida Department of Financial Services (“DFS”) issued a September 13, 2011 letter from DFS Division of Consumer Services Bureau Chief Barb Szumowski instructing neutral evaluators on corresponding changes to all new and pending neutral evaluations. To view the letter, click here.