Insurance

While the insurance marketplace has improved over the last few years, cost drivers and regulatory impediments persist. More- over, election cycles often bring interesting - and sometimes counterproductive - insurance issues to the fore; and 2015 should be no different. AIF will continue to push a responsible insurance agenda and support initiatives that continue to address cost drivers, increase regulatory efficiency, and foster stability for the benefit of the insurance-buying public.

Since the historic reforms of 2003, Florida workers’ compensation rates are still over 50% lower than they were a decade ago, and the market is competitive and sustainable. However, there are several cases working through the judicial system that threaten disruption to the system if their outcomes alter the current balance between benefits, costs and attorney fees. While one of the cases has been ruled on favorably, we stand ready to address subsequent rulings in equally important cases that may need legislative remedies. Additionally, AIF will evaluate all legislative proposals offered in the coming session and support those items which demonstrate significant rate reductions while being vigilant to avoid unintended consequences that could jeopardize rate affordability, coverage availability and market stability.

As the 2012 personal injury protection (PIP) legislative reforms continue to be litigated by chiropractors and the trial bar, significant savings for consumers is stymied. AIF will stand firmly behind leaders like Gov. Rick Scott, CFO Jeff Atwater, and legislators who implemented this reform and will do what is necessary to support or strengthen our automobile insurance market.

One issue that currently presents a potential disruption in that marketplace is the interplay of private passenger automobile insurance laws and ridesharing. AIF SUPPORTS injecting legislative certainty into this nexus, by clarifying that admitted carriers can offer insurance for commercial ridesharing as an endorsement or separate policy. Assisting innovative inventions such as ridesharing and preventing insurance market disruptions are not mutually exclusive — AIF SUPPORTS reconciling these for the benefit of drivers, ridesharing providers, and passengers, for the stability of our automobile insurance market.

It is important for any legislation addressing the state’s residual market entities — Citizens Property Insurance and the Florida Hurricane Catastrophe Fund — to  focus on reducing exposure and minimizing assessments. AIF OPPOSES any attempts to expand Citizens eligibility or drop the CAT Fund’s retention level and will SUPPORT initiatives that reduce Citizens’ policy count and shrink the CAT Fund.

AIF SUPPORTS legislation to return Citizens to an insurer of last resort. Reducing the exposure of Citizens will substantially reduce the likelihood of claims-paying deficits and, thus, hurricane taxes on insurance premiums for Florida’s employers. Success has been realized in the diminishment of Citizens policy count, which now stands at less than 700,000 policies. AIF will continue to support takeout programs, the Clearinghouse, and reforms geared to stamp out cost drivers in a continued effort to have a sound, reliable, and financially resilient residual market.

AIF SUPPORTS legislation to restore the Florida Hurricane Catastrophe Fund (Cat Fund) to a safety buffer for Andrew-sized storms. The Cat Fund collects premiums that would likely be insufficient to cover its liabilities in the event of a hurricane. Multiple storms in a single year or in back-to-back years before the Cat Fund could rebuild its reserves would be a man-made catastrophe. To pay claims, the Fund relies mostly on the levy of taxes on most insurance policies to pay back amounts borrowed by selling bonds. The CAT Fund’s leadership has affirmed that the CAT Fund is getting healthier; however, that is conditioned upon the premise that the bond markets will continue to have significant capacity. We need more stability than that and, as such, AIF supports legislation to right-size the Cat Fund, thereby ensuring that the Cat Fund can meet its obligations in the event of a storm and reducing the hurricane taxes funding its operations, as well as its possible deficits. AIF would oppose any effort to expand Cat Fund exposure by reducing its retention (deductible).

AIF OPPOSES stranger originated life insurance (STOLI) arrangements. AIF expects that certain life insurance speculators will again try to undo established case law requiring an insurable interest in a life insurance policy. Instead, these speculators will attempt to ease restrictions on the ability for “strangers” to originate a life insurance policy on another person as an investment tool. These STOLI arrangements will continue to be disavowed by the insurance community as a predatory practice that undermines the integrity of the insurer-insured relationship.

As a result of legislative efforts in 2011 and 2012, which reformed the regulation of commercial insurance rate- making with an eye towards a more free market approach, the commercial insurance market is strong. Unlike the residential property insurance market, the commercial market has extremely solvent, name-brand carriers participating in the writing of commercial property, casualty, liability, workers’ compensation, and other lines. There is an opportunity to build on this success by clarifying the annual rate filing process and reducing the need for unnecessary certifications by commercial insurers. AIF SUPPORTS free market principles that, as we have seen in the commercial insurance market, make Florida a better place to do business.

Florida is at a crossroads as a result of the implementation of the Affordable Care Act. AIF is seeking to address Florida’s “coverage gap” through its participation in A Healthy Florida Works, which is intended to provide a framework by which the tax on Florida’s employers can be reduced by leveraging Florida’s share of federal funding. It is imperative that employers not be unduly penalized when options exist for closing the coverage gap; AIF believes these must be explored.

In addition to this effort, AIF also SUPPORTS other efforts to address the likely elimination of LIP Funding, prevent carve-outs from taking managed care in the wrong direction, and preserve the ability for health insurers to perform necessary checks and balances to ensure that patient care and cost savings are maximized. AIF also SUPPORTS critical oversight of provider mergers and consolidations that can sometimes artificially inflate the cost of care by eliminating competitive provider options. Lastly, AIF believes that the private market’s innovation in the telemedicine arena should be allowed to continue to develop and mature through collaboration between providers, insurers, and patients without political interference.