Florida’s post-recession rebound and steady regulatory climate have created a stable, pro-growth environment for the deployment of insurance capital. In fact, Florida has provided an interesting contrast to the dynamics at play in the federal government with ever changing regulations and shifts in policy, particularly when it comes to health insurance. While the state has weathered politics and recent storms - namely Matthew, Hermine, and Irma - with ease, tort reform has still proved elusive, dampening our market’s full potential.
AIF has consistently worked to pursue a responsible insurance agenda that promotes competition, removes cost drivers, increases regulatory efficiency, embraces tort reform, and fosters stability for the benefit of the insurance buying public. In 2018, AIF will maintain that commitment and focus on the areas below:
Although Florida’s workers’ compensation marketplace was dealt several curveballs from the Florida Supreme Court which pose a great risk to the litigiousness of the system, the rating system has yet to bear out the full brunt of the associated costs. Positive loss experience in 2015 and 2016 led the National Council on Compensation Insurance (NCCI) to file for a rate decrease in its most recent annual filing, although it had previously increased rates due to the Castellanos decision which overturned laws designed to ensure plaintiff attorney fees were reasonable and commensurate with the value derived by the attorney’s client. The moderating effect of the subsequent decrease cannot be expected to last for long, however, this means that AIF and its Workers’ Compensation Coalition will be persistent in monitoring the workers’ compensation marketplace as loss trends develop.
AIF was supportive of many reforms proposed by the House of Representatives in the 2017 Regular Session, which sought to rebalance the attorney fee structure and provide a legislative remedy to other recent court decisions. AIF was also able to secure a legislative victory in the form of injured worker privacy, to prevent employees from being solicited by attorneys right after an on-the-job accident, in the hopes that a non-litigious and favorable resolution could first be mutually sought by employers and employees.
Consistent with our goal to inject predictability and commonsense litigation reform into all insurance markets, AIF SUPPORTS workers’ compensation proposals that further those objectives. Until that can be done effectively, AIF will closely and carefully track trends in the workers’ compensation marketplace to develop and propose future reforms that ensure Florida’s businesses do not suffer a devastating increase in the cost of doing business.
AIF applauds the governance of our residual market entities and will OPPOSE anything that depletes their capital, expands their interference with the private market, or fails to address ersistent cost drivers.
Florida Hurricane Catastrophe Fund
The Florida Hurricane Catastrophe (CAT) Fund is a state-run program that provides reinsurance coverage. Its capable management over the last decade has allowed Florida to benefit from this reinsurance backup without the need to resort to assessments on private insurance policies. Despite the improvement some seek to change the operation of the CAT Fund to include more coverage at lower levels.
Expanding the size and scope of the Florida Hurricane Catastrophe Fund sends an unfortunate signal to private reinsurance markets that their capital is unwelcome. Policymakers should guard against efforts to adjust its coverages at the expense of depleting its cash build-up, making it more likely that Floridians and business owners could see another “hurricane tax.”
Citizens Property Insurance Corporation
Much like the CAT Fund, Citizens Property Insurance Corporation’s leadership has led to a dramatic but positive realignment of risk from the state to the private market. Citizens’ has, to the extent possible, attempted to return to its original goal of being an “insurer of last resort.” While the 10% rate cap, in conjunction with unfortunate market developments (such as the proliferation of assignments of benefits (AOBs) creating a tremendous rate need in pockets of South Florida), Citizens’ has been creatively trying to minimize costs to the state and policyholders by implementing programs that provide necessary services without the propensity for fraud and inflation, such as instituting a program where policyholders are encouraged to use preapproved contractors. While those who seek to profiteer off insurance claims have pushed back, AIF SUPPORTS the efforts of Citizens—as well as their private market counterparts -
to address insurance cost drivers in the absence of legislative reforms.
The abuse of the one-way attorney fee statute in relation to the “assignment of benefits” mechanism has spawned a relatively new creation of litigation over auto glass repairs and property water damage. Sadly, these legal abuses are perpetrated by a handful of plaintiff’s lawyers and vendors who work together to strip benefits away from policyholders and use these to force higher settlements from insurers - even going so far as to sue in the name of the policyholder, often without the policyholder’s full and informed consent. AIF SUPPORTS reforms to the assignment of benefits process to protect consumers against these abuses.
While most can agree that Florida’s no-fault automobile insurance, also known as Personal Injury Protection (PIP), has not operated as intended, consensus on how to fix the problem has been elusive. While bodily injury liability insurance has been embraced by a majority of states, Florida must be willing to embrace tort reform as part of any legislative solution promoted to Florida’s rate payers as a cost saving measure. AIF also recognizes the need to ensure that appropriate medical care can be provided and reimbursed. AIF SUPPORTS solutions which provide for a simpler and more cost-effective system that also can provide necessary emergency medical care for Floridians, yet AIF OPPOSES bills that seek to simply “ditch PIP” without a more comprehensive and thoughtful replacement.
Given AIF’s historic commitment to promoting Florida as the best state in which to live, work, and play, proposals that could hinder or impede services to tourists must be carefully scrutinized. Previously, legislation that subjected rental car companies to a higher minimum financial responsibility level - essentially increasing liability for their customer’s actions - was appropriately rejected. This legislation also sought to impose higher financial responsibility requirements on tourists who reside in other states or countries. Given the punitive effects on tourists and the rental car companies who support Florida’s tourism industry, AIF will continue to OPPOSE these higher financial requirements which are at the expense of tourism industry stakeholders.
In recent years, proposals that seek to make health care
more expensive have proliferated in the Florida Legislature.
These include limitations on effective step-therapy protocols, restraints on mail order pharmacy fills, restrictions
on necessary formulary updates, and reforms that
would inappropriately incentivize unreimbursable care.
AIF OPPOSES legislation that increases the cost of health
care, or that discourages safe, effective, and proven methods
that achieve cost savings without jeopardizing high
quality health services or positive patient outcomes, and
will continue to do so.
Further, consistent with the experience of many other states across the union, Florida has experienced a severe opioid crisis. AIF SUPPORTS the efforts of our Governor and political leaders to provide common sense solutions to this public health epidemic. These include limiting the availability of addictive opioids and promoting nonaddictive alternatives, in addition to expanded access for opioid antagonists that can save lives, while promoting appropriate therapeutic care for victims.