News Briefs

FloridaFAIA Likes Due-Diligence Decision

The Florida Association of Insu-rance Agents has filed an amicus (friend of the court) brief with the First District Court of Appeals in a case involving an insurance agent who appealed a Final Order of the Department of Financial Services.

The order revoked the agent’s insurance license based on a finding by DFS that he violated the provisions of section 626.901(1), Florida Statutes, prohibiting representation of unauthorized insurers. DFS also found that the statute is a “strict liability” statute. Under the doctrine of strict liability, no proof is required that the agent knew or should have known he was representing an unauthorized entity. FAIA claims that such a standard is not only unfair but also not intended by the statute.

According to the FAIA brief, at the time the agent was appointed there were no rules nor any communicated regulatory policies guiding agents on what constitutes due diligence in such matters. “Of course we support prohibitions against representing unauthorized carriers,” Jeff Grady, FAIA president said. “But such an interpretation is unfair to insurance agents who, many times, must rely on the state for such determinations.”

In this case, when the agent accepted an appointment with Meridian Benefit Inc. in good faith, it was neither an “authorized insurer” nor a qualified ERISA plan as it claimed. “But, the agent didn’t know that and there was no information available from the state that would have helped” Grady said. “Still, he lost his license and his livelihood and that’s not right.”

The case is still pending, but if the FAIA point of view prevails, it will have averted a major set-back for all Florida independent agents struggling to compete in an increasingly competitive and complicated health insurance market.

OIR Order Protects Wilma Victims

Two protective orders, one protecting consumers from being dropped by their insurers while repair work is being done, and a second prohibiting insurance companies from canceling or non-renewing any insurance policy until after Nov. 19, have been signed in Tallahassee, Fla., by Insurance Commissioner Kevin McCarty.

The order, prohibiting policies from being canceled or non-renewed, was in effect until Nov. 19, and likely to be extended. It covers policyholders in the 20 Florida counties affected by Wilma including Broward, Miami-Dade and Palm Beach counties.

USDA to Assess Wilma’s Citrus Damage

In the aftermath of Hurricane Wilma, which struck Florida Oct. 24, the Florida Field Office of USDA’s National Agricultural Statistics Service announced plans to conduct a special citrus survey to assess current crop conditions.

The survey, will recount the fruit on sample trees in the areas affected by the hurricane. The updated average, along with indications of fruit size and droppage, will be used to produce a utilized production forecast for USDA’s December Crop Production report, to be released Dec. 9.

“Although the eye of Hurricane Wilma passed to the south of the major citrus producing areas of the state, it was such a large storm that the effects have been observed well to the north of Wilma’s path,” Benjamin Klugh Jr., director of the NASS Florida Field Office reported. “Crews will be busy measuring the effects of the storm throughout the Southern and East Coast regions of the Florida Citrus Belt.”

FAIA Web Site Upgraded

The Florida Association of Insurance Agents in Tallahassee recently unveiled a new and improved version of its Web site at www.faia.com. Jennifer Pitts, FAIA webmaster said anyone using the site for research should be aware that its look and feel will be totally different. She advised them to be prepared for the new framework of the site and that a little more navigation might be necessary at first.

“The new site will be easier to use and much more intuitive, however, this may initially pose a challenge to users,” Pitts explained. “Everything is divided into departments or areas. The FAIA Member Services site, www.faiams.com, has not changed at all.

“This is the first step to a better FAIA website,” Pitts said. “New easier registrations for events and searching capabilities are extremely helpful. We have incorporated a calendar view on our site that can show a 30,000-foot view of upcoming events. Events and classed can be searched for by specific date, city or even by name of a class.”

Pitts said that in the very near future, visitors will notice that the Florida Insurance Research Library will be accessible online for those who subscribe to this service. Another upcoming feature of the site will include community feedback and member participation. Technical insurance questions, legislative issues and even automation issues will all become subjects that can be addressed in these communities. There will be a section for the media to turn to for late breaking news or press releases and searching www.faia.com will be easier as well with a new cataloging system.

LAIA, Coral Insurance Spokespersons

On S. Fla. Radio Talk Show

The aftermath of Hurricane Wilma and other insurance issues were discussed recently during an on-the-air panel of insurance industry experts, including the president of the Latin American Insurance Agencies and Coral Insurance. Enrique Ruiz, LAIA president and Susan Straker, president and CEO of Coral Insurance in Hollywood, Fla., participated in the show.

The Nov. 6 show aired from Palm Beach to the Florida Keys on WFTL, 850 AM in Fort Lauderdale. Utrice Leid, producer of the weekly Balistreri Real Estate Show told Insurance Journal the insurance discussion, moderated by Jim and Joe Balistreri broker-owners of Balistreri Real Estate, took place during the second segment of the show and received a lot of interest.

MISSISSIPPI

Commissioner Dale to Address House Financial Services Committee

Mississippi Insurance Commis-sioner George Dale, along with insurance commissioners from four other Gulf states, was in Wash-ington, D.C., on Nov. 9 to address the House Financial Services Committee about the impact of the 2005 hurricane season on the insurance industry in his state.

Dale urged lawmakers to help homeowners on the Mississippi Gulf Coast who did not have flood insurance.

“We’ve all taken a massive blow from hurricanes this year, and it is evident that the insurance industry is not big enough to rebuild the coast alone, but they must do all they can,” Dale was quoted in the New Orleans Times-Picayune in a written statement. “While in Washington, I hope to deliver my message in person to our congressional leaders in the strongest terms possible that it will take a cooperative effort from the insurance industry, the federal government, the state government and the private sector to get the state and specifically the Mississippi Gulf Coast rebuilt.”

Dale also met with the Mississippi congressional delegation to discuss the plight of people who were uninsured when Hurricane Katrina slammed into the state Aug. 29.

The round-table discussion was the first time commissioners from all states affected by Hurricanes Katrina, Rita and Wilma have worked together since the storms.

Officials Waiting to Receive Federal Hurricane Accounting

Mississippi is still waiting to hear from the federal government what its share of the Hurricane Katrina recovery efforts will cost according to Buddy Bynum, a spokesman for Gov. Haley Barbour.

States are required to pick up part of the cost for certain types of disaster assistance from the Federal Emergency Management Agency, including repairs to state infrastructure, efforts to minimize future damage from flooding or storms and some home repairs for individuals.

“The bottom line is, we don’t know yet,” Bynum told the Biloxi Sun Herald. “It is something of a moving target, and some
elements of the formula are still being

determined.”

Sen. Tommy Robertson, chairman of the Senate Finance Chairman Tommy Robert-son, told the Sun Herald that state leaders have been told that Louisiana’s hurricane losses and expenses are about 1.5 times Mississippi’s. That means Mississippi, which has a budget of $4.6 billion, could easily receive a bill of $1 billion to $2 billion for its share of relief.

“That’s one reason we were so cautious about anything we spent in special session,” Robertson, R-Moss Point, said. “Before we start committing to too many other things, we have to see what our bill is.”

Robertson said that a bill before Congress to have the federal government pick up the state’s share of Medicaid for one year would help.

“Gov. Barbour is trying to get that passed,” Robertson said. “That would give us a little over $500 million. If that came through, and some other things, we would be in pretty good shape.”

WEST VIRGINIA

Rate Decrease Granted

The West Vir-ginia Mutual Insu-rance Company has been granted a 5 percent rate increase according to Insurance Commissioner Jane L. Cline.

West Virginia Mutual filed for the rate decrease with the Offices of the Insurance Commissioner in August. The decrease was granted Oct. 24, 2005.

“This rate decrease is evidence that we are achieving our goal of having an available, affordable and stable medical liability insurance climate in West Virginia,” Governor Joe Manchin III said.

West Virginia Mutual, which now covers 1,647 physicians, was created in July 2004 to address the medical malpractice crisis. “This is not only good new for physicians insured by the Mutual, it is another major step forward toward stabilizing the health care delivery system in our State” Dr. Robert Ghiz, chairman of West Virginia Physicians’ Mutual Insurance Company board of directors said.

The new rates take effect Jan. 1, 2006.

Topics Florida Catastrophe Agencies Virginia Hurricane Mississippi Market West Virginia