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For years, Florida has been identified as an outlier on civil justice. Often referred to as a “judicial hellhole,” the status of the state’s tort climate is a troubling cohort to the disasters not of our making, like hurricanes. AIF has consistently championed reforms to ensure that manmade problems do not frustrate that mission. Unfortunately, significant tort reform has proven elusive until this point. However, the tides are changing, and legislative and executive branch leadership is actively looking at several measures that would make Florida better for business.

Natural disasters provide a clear and present danger to our property and casualty marketplace. AIF SUPPORTS responsible policies to safeguard the Florida Hurricane Catastrophe Fund, relieve stress from Citizens Property Insurance Corporation, and ensure that all policyholders can secure necessary protection for their homes and businesses.

Lastly, AIF recognizes that stability and affordability in the health insurance market is key for employers. As such, AIF has consistently supported responsible measures that remove cost drivers, increase regulatory efficiency, and foster stability for the insurance-buying public.

Workers’ Compensation

Although Florida’s workers’ compensation marketplace was dealt several curveballs from the Florida Supreme Court that pose a great risk to the litigiousness of the system, rates have not yet borne out the full brunt of the associated costs. Positive loss experience has led to several rate decreases in most recent NCCI annual filings, although the industry is bracing for the eventual impact of unchecked attorney’s fees which are likely to erode the moderating effects of the rate decreases. AIF and its Workers’ Compensation Coalition are actively monitoring the trends in this system to ensure that action is taken, as appropriate, for the benefit of employers and employees. Consistent with our goal to inject predictability and common-sense litigation reform into all insurance markets, AIF SUPPORTS worker’s compensation proposals that further those objectives.

Also worthy of review is the current framework by which professional employer organization’s (PEO) report their employees, which can sometimes create a coverage gap, resulting in uninsured workers. AIF SUPPORTS ensuring that no workers’ comp coverage gaps exist in any employment arrangement, PEO or otherwise.

Assignments of Benefits (AOBs)

The legislature resolved a 7+ year problem in the 2019 session by changing the laws regarding assignment of benefits in property insurance cases. This legislation is a victory for consumers whose rights were being stripped away by unscrupulous vendors, and who were having to pay for the costs associated with predatory AOB litigation. Because AOBs are found in first party property and casualty insurance contracts, they still persist in both the personal injury protection (PIP) and auto glass contexts. AIF SUPPORTS exploring how the legislature can similarly tackle AOB in those contexts. For example, curbing abusive solicitation and litigation over a few dollars in windshield cases will help to avoid driving up costs for all ratepayers.

Residual Property Insurance Market

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 persistent cost-drivers.

Florida Hurricane Catastrophe Fund

The Florida Catastrophe 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 this, some seek to change the operation of the CAT Fund to include more coverage at lower levels.

AIF OPPOSES expanding the size and scope of the CAT Fund because it 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 AOBs, created 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 pre-approved 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.

Automobile Insurance

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 emergency 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; however, AIF OPPOSES bills that seek to simply “ditch PIP” without a more comprehensive and thoughtful replacement, particularly if that replacement does not include a fix to Florida’s out-of-check, common law, bad faith gamesmanship.

Rental Car Liability

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 subject rental car companies to higher minimum financial responsibility levels—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.

Rental cars provide a great benefit to Florida’s tourism industry, but with the advent of alternatives, such as car sharing, the playing field has become unlevel. For example, rental cars are subject to a surcharge and sales tax, yet newer car sharing services avoid these fees while also avoiding other consumer protection controls, such as safety recalls. Tourism is critically important and having options for transportation is a good thing. However, they must play by the same rules, and also be subject to important protections for drivers and passengers, hence our support for parity across transportation options.

Ensuring Equitable Treatment for the Facilitators of Vehicle Rentals

The way Floridians access modes of transportation continue to change, and it is important that the state treat equitably established and emerging companies that provide the same service. Traditional rental car companies have operated for centuries and remit sales tax and other surcharges that help fund our state’s infrastructure. More than ten years ago, car sharing—another rental vehicle model—emerged and they too collect sales tax and remit other surcharges. Yet another model for renting vehicles, peer-to-peer car sharing, has recently occurred. Thus far, these companies do not remit sales tax and other surcharges. They are also not bound to the same vehicle safety recall measures and other consumer protection measures required of traditional rental and car sharing models.

AIF SUPPORTS ensuring our state’s infrastructure funding grows as new business models develop for existing industries. To that end, we support ensuring that companies that facilitate the rental of vehicles operate on a level playing field in order to guarantee appropriate competition through the free market.

Liability Insurance

Trial lawyers have devised a way to prevent juries from hearing the true cost of medical services by using what is called “Letters of Protection,” which allow trial-lawyerbacked doctors to inflate their “costs,” which then allows trial lawyers to inflate their attorney fees by inflating the overall award.

This trickery must be stopped, and it can be stopped in the most common sense of ways—provide juries with the actual cost. This can be done by applying the plaintiff’s insurance coverage, by using a nationally recognized medical pricing database, or through various other methods. This medical gamesmanship orchestrated by the trial bar must come to an end, and facts must be able to prevail in the courtroom. As a result, AIF SUPPORTS accuracy in damages, which can only happen if the wayward use of Letters of Protection is reformed.

Health Insurance

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 un-reimbursable 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.

The health insurer community has developed a number of measures to ensure the affordability of health insurance, and thus, the management of its costs. One of these important tools is the use of pharmacy benefits managers (PBMs), which are designed to manage prescription drug benefits, ensure delivery of appropriate medication, and operate to effectively control costs while also delivering necessary prescriptions. AIF SUPPORTS the important role that PMBs play in the delivery of quality care in the health insurance marketplace, and it is important that such tools continue.

AIF OPPOSES anything that would saddle the business community with unnecessary costs or burdensome tasks as it relates to securing employee health insurance. Unfortunately, some interest groups are pushing legislation to require employers to engage in extraordinarily rigorous, real-time reporting under the guise of “preventing retroactive denials,” when, in reality, health insurers are simply implementing the various components of the Affordable Care Act as is relates to patient eligibility and authorization. If passed, this legislation would significantly saddle the business community with needless reporting responsibilities and costs.

Lastly, consistent with the experience of many other states across the nation, 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, promoting nonaddictive alternatives, and expanding access for opioid antagonists that can save lives, while promoting appropriate therapeutic care for victims.

Life Insurance

Life insurance is a product purchased to protect family members and loved ones upon passing. Akin to every other type of insurance, risk is a factor in how premiums are calculated for life insurance. Therefore, medical documentation is routinely reviewed before a life insurance policy is bound to ensure the appropriateness of the premium.

Recently, with the advent of genetic testing, some are advocating that such information not be included as part of a medical review. This creates a tremendous cost shift in the marketplace and allows for adverse selection, which has the very real potential of creating significant rate distortions for premium payers. Due to their inherent business goal of covering risk, insurers must be allowed to evaluate that risk before they then decide to risk their capital, which is supported by all other premium payers. Not doing so ignores the practical reality of insurance and creates market aberrations.