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.
Florida’s growth, coupled with the strain caused by legal and other challenges, underscores the need for Florida to attract as much capital as possible to support our state’s risk.
Efforts to stymie private capital will be met with resistance by AIF. This includes attempts by some to expand the size and scope of the Florida Hurricane Catastrophe Fund, which sends an unfortunate signal to private reinsurance markets that their capital is unwelcome. It similarly includes attempts to place undue restrictions on a surplus lines market that SUPPORTS our peninsular state’s tremendous need for underwriting large, niche and more fragile risks. Unquestionably, it also includes any legislative effort to increase taxes on insurance companies who employ thousands of Floridians, which is a double blow to capital attraction and employment.
Simply put, the business community is unable to take risks when they cannot purchase insurance to help guard against it. AIF is unwavering in its commitment to attract capital to underwrite risk, and will resist all attempts to make it more difficult, more expensive or less available for Florida’s employers. Similarly, anything that raises taxes, jeopardizes employment or rebuffs the economic contribution made by risk bearers to our state must be defeated for the benefit of Florida’s business climate, on which hard working families statewide rely for their own success. AIF OPPOSES policies that make it more expensive, less attractive or more difficult to attract and appeal to those that support capital formation and risk in our state.
Automobile insurance is another market where legal abuse abounds. Although 2012 legislation stabilized the personal injury protection market, the trial bar continues to challenge its soundness. On the bright side, the outlook for a statewide ridesharing solution is positive in 2017, which will pave local regulatory hurdles for ridesharing companies and also provide sensible measures - including insurance coverage standards—for the safety and benefit of ridesharing passengers.
AIF SUPPORTS smart reforms to Florida’s automobile insurance market that address unchecked litigation, which adds costs for policyholders, and ensures the safety and availability of ridesharing services for Florida’s passengers.
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 subjecting 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.
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, working together, strip benefits away from policyholders and use these to force higher settlements from insurers, and even go 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.
Citizens Property Insurance Corporation has consistently reduced its policy count; a nod to sound, free-market reforms enacted by legislative and executive branch leadership. As such, the risk of assessments to all Florida policyholders - individuals and businesses alike - has been minimized. Unfortunately, segments of certain industries have devised schemes to contrive or increase the price of repair work for non-catastrophic claims.
These claims typically involve an assignment of benefits, which strips the policyholder of their benefits, and are then given, oftentimes irrevocably and in total, to a third party. Such “assignments of benefits” have created a wave of litigation, unseen even during periods of natural disaster. This wave has now reached tsunami like status and is causing attrition from the private market back to Citizens and putting stress on Florida’s residual market. Like many of the legal abuses discussed above, this too is concentrated in a small amount of law firms and vendors who scheme to manufacture losses or who use a policyholder intended benefit - the one-way attorney fee statute - for their own economic gain. Neither Citizens nor private companies are immune from the mounting pressure.
AIF is unwavering in its call for legal reform, which is benefitting a small minority of plaintiff’s attorneys at the expense of Florida’s consumers. In an effort to control spiraling costs and the resulting adverse impact to Florida’s residual market, AIF SUPPORTS reforms that will eliminate the abuses of policyholder’s protections by lawyers and vendors.
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