Property & Casualty Opening Remarks. Tallahassee, Florida. June 14, 2012

Transcription

1 Property & Casualty Opening Remarks Rate and Form Filing Statistics / Legislative Changes Tallahassee, Florida June 14,

2 WELCOME!! 2

3 Topics for Discussion Property & Casualty Product Review Filing Statistics and Review Process Recent Legislative Changes 2011 Session HB 99 and SB Session HB 119, HB 941, and HB

4 Property & Casualty Product Review Filing Statistics and Review Process 4 4

5 Number of P&C Form and Rate Filings Submitted to the Office Note: Filings may contain multiple companies 2012 data is preliminary and includes estimated additional filings due to implementation of HB

6 Number of P&C Form and Rate Filings Submitted to the Office Note: Filings may contain multiple companies 2012 data is preliminary and includes estimated additional filings due to implementation of HB

7 Rate Filings The evolution of the rate filing process over the past few years: Statutory Changes Arbitration Certification Pre-filing Conferences Improved Quality Additional Information 7 7

8 Personal Residential Approved Filings Number of FY Base Rate Filings Increase above overall rate requested 11 Overall rate requested within 1% 103 Lower overall rate than requested 21 Total base rate filings approved 135 Note: Only base rate filings are shown. Miscellaneous rate filings not included above. This represents a small sample of the total rate filings. 8 8

9 Average Days to Close a Rate Filing Has Decreased Since

10 Form Filings The evolution of the form filing process over the last few years. Legislation File Volume Budget Staffing Complexity Training Quality 10 10

11 Average Days to Close a Form Filing Has Increased Since

12 Forms Unit Organizational Chart Anne Ivory John Avery Carolyn Diggs Weston Walker Mike Burdeshaw Vacant Veronica Myles Laura Jensen James Guminski Jim Kocha Vacant Vacant Note: Excludes Workers Compensation Area 12 12

13 Forms Unit Organizational Chart Anne Ivory John Avery Carolyn Diggs Weston Walker Mike Burdeshaw Vacant Veronica Myles Laura Jensen James Guminski Jim Kocha Vacant Vacant Has worked less than 1 year in Forms Area as of May 29, 2012 Note: Excludes Workers Compensation Area 13 13

14 Statutory Changes 14 14

15 2011 Legislative Session 15 15

16 HB 99 Effective October 1, 2011 Adds lines of business for which the filing requirements for rate/rule filings is reduced. It is NOT a deregulation of the commercial lines. The programs are still subject to all of the same requirements as any other line of business. For example: Rates may not be excessive, inadequate or unfairly discriminatory Specific rates must be filed and ranges of rates are not allowed All subjective rating must comply with the requirements of Rule 69O , F.A.C

17 HB 99 Lines of Business Excess or umbrella Surety and fidelity Boiler and machinery and leakage and fire extinguishing equipment Errors and omissions (Professional Liability) Directors and officers, employment practices, fiduciary liability, and management liability Intellectual property and patent infringement liability Advertising injury and Internet liability insurance Property risks rated under a highly protected risks rating plan General liability Nonresidential property, except for collateral protection insurance Nonresidential multi-peril Excess property Burglary and theft Commercial auto 17 17

18 HB 99 Required Information Filing must be submitted within 30 days of the proposed effective date Information required to be in the filing: Name of the insurer Type or kind of insurance Average statewide percentage change in rates Manual pages for proposed changes Actuarial data with regards to the proposed change must be maintained by the insurer for two years after the effective date and is subject to examination by the Office 18 18

19 Number of P&C Form and Rate Filings Submitted to the Office Note: Filings may contain multiple companies 19 19

20 Commercial Forms Order (Filed April 9, 2012) Insurers have the option to certify that forms filed under the lines of business subject to HB 99 comply with all applicable Florida Laws Certifications must be signed by the CEO, President, Chief Compliance Analyst or General Counsel and be notarized When a certification is received, forms will be stamped informational and closed Certification may be used on previously submitted filings as long as the filing has not yet been reviewed or if the review has started, the analyst has not yet found any violations of Florida Statutes 20 20

21 Commercial Forms Order (continued) As of May 29 th : 36 filings have been closed with certifications Number of form filings pending: - Commercial 1,254 - Personal Workers Compensation 14 - Total 1,

22 SB 408 Effective May 17, 2011 Time Limit on Windstorm and Hurricane Claim (Property) Effective 6/1/2011 Requires claim notice to insurer within three years after hurricane first made landfall or the windstorm caused the covered damage. Notice of Cancellation and Nonrenewal (Residential Property) The required minimum of 180 days prior notice has been changed to at least 120 days prior notice. May be reduced to 45 days if necessary to protect the best interests of the public. Also, nonrenewal reduced to 90 days for insurers writing combo home/auto policies

23 SB 408 Change in Policy Terms (Property and Casualty) Allows an insurer to change policy terms upon renewal in lieu of nonrenewing the policy and offering a new contract. To do so, the insurer must give the policyholder a written notice entitled "Notice of Change in Policy Terms." This is not to be used as a blank endorsement. This is a notice and should be filed like a nonrenewal, cancellation, and renewal notice. It is not the form that will change the policy terms. There should be a contractual form that changes the policy terms

24 SB 408 Holdback on Dwelling Loss Payment (Homeowners) For a partial Coverage A loss settled on a replacement cost basis, an insurer may initially limit payment to ACV and then pay any remaining amounts as the work is performed and expenses are incurred. If a total dwelling loss occurs, the insurer shall pay the replacement cost coverage without holdback, pursuant to Section , Florida Statutes

25 SB 408 Optional Restriction of CGCC and Sinkhole Coverage (Property) The insurer may restrict Catastrophic Ground Collapse Coverage (CGCC) and sinkhole loss coverage to the principal building, as defined in the applicable policy. Under this restriction, contents coverage and Additional Living Expenses (ALE) remain when tied to the principal building. Time Limit on Sinkhole Claim (Property) Notice of sinkhole claim must be given to the insurer in accordance with the terms of the policy within two years after the policyholder knew or reasonably should have known about the sinkhole loss

26 SB 408 Policyholder Demand for Sinkhole Testing (Property) The policyholder's demand for sinkhole testing must be communicated to the insurer in writing within 60 days after the policyholder's receipt of the denial of the claim. The policyholder shall pay 50% of the actual costs of analysis and services as specified. The insurer shall reimburse the policyholder for the costs if sinkhole loss is certified as specified in the bill

27 SB 408 Time Limit to Enter Sinkhole Contract and Complete Repair (Property) The policyholder must enter into a contract for the performance of building stabilization and foundation repairs within 90 days after the insurer confirms coverage for the sinkhole loss and notifies the policyholder of such confirmation. Stabilization and all other repairs to the structure and contents must be completed within 12 months after entering into the contract subject to the specified exceptions. Appraisal for Disputed Sinkhole Claims (Property) Neutral evaluation supersedes mediation, but no longer invalidates the appraisal clause of the insurance policy

28 2012 Legislative Session 28 28

29 HB 119 Effective July 1, 2012* The implementation of this bill will likely help to curb the rising costs of PIP There is a provision that expressly allows an insurer to implement the provisions of the bill without amending its policy form or notifying the providers, claimants or insureds *Sections within the bill have different effective dates

30 HB 119 Clinic Licensure An entity where health care services are provided to individuals and which tenders charges for such services under the Florida Motor Vehicle No-Fault Law (No-Fault Law) must be licensed as a clinic by the Agency for Health Care Administration to receive reimbursement. The following entities are excluded from this requirement: An entity wholly owned by a physician, dentist, chiropractic physician or wholly owned by such practitioner and the spouse, parent, child or sibling of such practitioner A hospital or ambulatory surgical center An entity that wholly owns, or is wholly owned by, a hospital A clinical facility affiliated with an accredited medical school 30 30

31 HB 119 Changes to Benefits Required benefits are: $10,000 in medical and disability benefits and $5,000 in death benefits Medical benefits 80% of reasonable expenses for medically necessary services: Limited to $2,500 if the injured person did not have an emergency medical condition. Limited to $10,000 if the injured person did have an emergency medical condition. Determination as to whether the injured person had an emergency medical condition must be made by a physician, dentist, physician assistant, or advanced nurse practitioner

32 HB 119 Medical Benefits Medical benefits do not include: Massage Acupuncture Licensed massage therapists and licensed acupuncturists may not be reimbursed for medical services Initial services and care must be received within 14 days after the motor vehicle accident 32 32

33 HB 119 Medical Fee Schedule For policies issued or renewed on or after July 1, 2012, an insurer may limit payment pursuant to the schedule of charges specified in Section (5)(a)1, Florida Statutes, only if the policy includes a notice stating that the payments will be limited. (Please see Informational Memorandum OIR-12-02M.) Additional provisions added to schedule of charges for ambulatory surgical centers, clinical laboratories and durable medical equipment. The applicable fee schedule is the fee schedule in effect on March 1 of the year in which services, supplies or care is rendered and applies throughout the remainder of that year

34 HB 119 Rate Filings An independent consultant will provide a study no later than September 15, 2012 that calculates the savings expected as a result of this bill. By October 1, 2012, all personal auto insurers must submit a rate filing that reflects the savings of this bill. If the insurer requests a rate in excess of a 10% reduction in its current overall PIP base rate, a detailed explanation must be provided. By January 1, 2014, all personal auto insurers must submit a rate filing that reflects the savings of this bill. If the insurer requests a rate in excess of a 25% reduction in its overall PIP base rate that was in effect as of the effective date of this bill, a detailed explanation must be provided. The Office must perform and publish the results of a comprehensive PIP data call by January 1,

35 HB 119 Other Misc. Provisions All motor vehicle accidents occurring on the public roadways must be investigated by a law enforcement officer and have either a long form or short form crash report completed. An insured seeking benefits under the No-Fault Law must comply with the terms of the policy, including submitting to an examination under oath. The insured must be in compliance before receiving benefits. An insured s refusal to submit to or failure to appear at two independent medical examinations raises a rebuttable presumption that the insured s refusal or failure was unreasonable

36 HB 119 Other Misc. Provisions (cont.) Any notice, documentation, transmission or communication required or authorized under the No-Fault Law may be transmitted electronically. Allows Department of Financial Services to create an Automobile Insurance Fraud Strike Force to support the prosecution, investigation and prevention of motor vehicle insurance fraud. Attorney fees recovered under the No Fault Law must be calculated without regard to a contingency risk multiplier. A licensed health care practitioner who is found guilty of insurance fraud relating to PIP loses his/her license to practice for five years and may not receive reimbursement for PIP benefits for 10 years

37 HB 941 Effective July 1, 2012 Eliminates the requirement for insurers to submit Workers Compensation Excessive Profits Reporting Form. (Please see Informational Memorandum OIR-12-03M.) Allows an insurer to transfer a commercial lines policy to another authorized and affiliated insurer. The transfer constitutes a renewal of the policy. Notice must be provided at least 45 days prior to the renewal. This does not apply to residential property coverages, with the exception of farmowners insurance and commercial general liability or commercial property policies providing farm coverage. An insurer having at least $200M in surplus, or a group having at least $400M in surplus, is not required to perform physical onsite premium audits for workers compensation coverage

38 HB 1101 Effective July 1, 2012 Salvage motor vehicle dealers are exempt from the requirements for garage liability insurance and personal injury protection insurance on those vehicles that cannot be legally operated on roads, highways, or streets in this state. Revises the requirement for cancellation of a motor vehicle policy within the first 60 days. Cancellation due to nonpayment of premium is restricted to only when premium payment was dishonored, rejected or invalid

39 HB 1101 (cont.) The interest rate for all overdue PIP payments is determined at the rate established in Section 55.03, Florida Statutes, for the quarter in which the payment became overdue Citizens must offer a basic personal lines policy similar to an HO-8 policy with dwelling repair based on common construction materials and methods Defines method for how Citizens must determine replacement costs on a dwelling 39 39

40 Questions? 40 40