A post earlier this week, Greenspan Public Adjuster Interviewed About Unauthorized Public Adjusting, generated a number of comments and questions, both public and private. Many well meaning individuals probably overstep bounds and violate the law. Some are simply scamming.
Continue Reading...Amy Bach, the Executive Director of United Policyholders recently interviewed public adjuster Masood Khan. In United Policyholders' summer newsletter, Khan, a vice president of The Greenspan Company Adjusters International, was interviewed regarding a number of important topics. One of the more controversial comments he made will be of concern with accounting firms, consultants and contractors. Masood Khan correctly noted that in most states, those determining, presenting, negotiating and adjusting losses for policyholders without a public adjuster license are illegally practicing public adjusting. In most of the states, it is a crime to do so.
Continue Reading...Every now and then, a headline has me wondering “what is this?” I love whales and watching them. I love salmon in a very different way and usually only watch them on my dinner plate. So, when the Insurance Journal listed a headline, Flood Program Must Consider Salmon and Whales, my curiosity was piqued.
Continue Reading...Florida's Third District Court of Appeal, which sits in Miami-Dade County, ruled yesterday that a public adjuster constitutional challenge to the public adjuster fee limitation and solicitation restrictions that was filed in Miami-Dade County should have been filed in Leon County. As noted in Sink Appeals Public Adjuster Suit: Delay Possible For Miami-Dade County Public Adjuster Lawsuit, this venue dispute slowed this lawsuit significantly. In the interim, a similar suit was not ruled on favorably by a Leon County judge, as noted in Public Adjusters Lose 48 Hour Solicitation Ban Case.
Continue Reading...Florida legislators will be debating insurance on the Senate floor today. The Senators are likely to have significant debate because recent indications are that there is extraordinary controversy about how to “fix" all of Florida's property insurance problems.
Continue Reading...The Florida House of Representatives appears to be following the lead of the Florida Senate regarding public adjusting. As noted last week in Amended Florida Public Adjuster Bill Passes in Florida Senate Banking and Insurance Committee, significant amendments to the original language of proposed legislation regulating public adjusters is moving through the Florida Senate. These amendments and proposed laws appear to be approved by committee action yesterday afternoon in the Florida House of Representatives. In my view, public adjusters should be prepared for these significant changes to become law because similar language is running simultaneously in both chambers of the Florida legislature.
Continue Reading...The Sarasota Herald-Tribune conducted a year long investigation into the manner Florida insurance companies diverted premiums and monies as expenses and losses to hide actual profits. This revelation is probably shocking to many who have been told repeatedly that the Florida insurance industry is losing money as a result of "unfair" rates and for other claims related reasons.
Continue Reading...An Order by the Office of Insurance Regulation shows one method some Florida insurers may use to “poor mouth” losses to the public and our legislators in Tallahassee while taking millions home through shell accounting techniques. Many of the smaller insurers operate as three corporations--the insurer, a managing general agent, and a holding company. It does not take a financial genius to figure out that investors and managers can siphon off profits by simply charging excessive fees through the managing general agent. The insurance part of the jointly owned enterprise then claims it cannot make any money for various reasons which we have been hearing about in the press and from some insurance lobbyists looking to raise rates and reduce benefits to policyholders.
Continue Reading...All adjusters, whether company, independent, or public, have significant ethical obligations in Florida. Indeed, these adjusters even have an obligation to turn each other into the Department of Financial Services. The failure to do so is, by itself, a breach of the adjuster’s ethical obligations:
Continue Reading...(g) An adjuster shall promptly report to the Department any conduct by any licensed insurance representative of this state which violates any provision of the Insurance Code or Department rule or order.
There are two active lawsuits with very good attorneys representing public adjusters who are challenging the 48 hour solicitation ban and the fee caps. The first one was filed in Miami-Dade County, as I reported in Florida Public Adjusters File Lawsuit to Overturn 48 Hour Solicitation Ban and Fee Caps. The second lawsuit challenging only the solicitation ban was filed in Leon County, as I reported in Second Public Adjuster Constitutional Solicitation Ban Challenge Filed. The later filed lawsuit seems to be moving along quicker; the first lawsuit has been delayed by a fight about venue.
Continue Reading...Three consumer advocates published a letter, Property Insurance Deregulation Too Costly, which claims that currently proposed Florida legislation calling for no regulation of insurance rates is bad for Floridians "because the average consumer does not have the resources or information to determine when a rate is excessive, the opportunity for the [insurance] company to abuse consumers exists." I agree, and for many more reasons than just that.
Continue Reading...Why do so many of our politicians play to the lobbyists and support laws that harm the average person and voter? This is exactly what has happened with important laws sponsored by the insurance industry lobbyists and then proposed by Florida Senator Mike Bennett of Bradenton and Representative Bill Proctor of St. Augustine. These politicians and other Florida political leaders have sponsored a law that would allow insurance companies to raise the rates of Florida policyholders as much as they want. Indeed, the law they support allows for insurance companies to collude with each other, since it calls for the complete deregulation of rates. As the insurance industry is exempt from anti-trust regulation, based on a bargain it made with the federal government in which it agreed to state regulation of rates, the insurers would be legally exempt from all regulation. Is this stupid or what? Do the Florida political leaders supporting this law think people will be happy when their rates go up 100% in a couple of years, or is this just a payback to the insurance industry and their lobbyists funding certain political action committee dollars? Or, giving them the benefit of the doubt, do they really understand the issue?
Continue Reading...In a widely read previous post, Florida Public Adjusters File Lawsuit to Overturn 48 Hour Solicitation Ban and Fee Caps, I noted how a lawsuit in Miami-Dade County challenged the fee cap and solicitation ban on public adjusters. The State challenged venue, and in a recent order, the trial court denied the change of venue.
Continue Reading...In a post last September, State Farm Agents are Fighting State Farm for Economic Survival, I wrote:
"Again, for many different reasons, I hope McCarty and State Farm can work out a deal."
Continue Reading...A Texas Department of Insurance (TDI) attorney familiar with the ongoing investigation will be at the Public Adjuster Seminar we are hosting tomorrow in Houston.
Continue Reading...I have been involved in a lot of disputed property insurance claims in many venues over the past twenty-five years where emotions run high, but the Texas Windstorm Insurance Association (TWIA) is the blue ribbon winner in Texas for policyholders that hate how they have been treated. And, it is not just limited to the customers of TWIA. A number of independent adjusters representing TWIA are ready and willing whistleblowers in lawsuits against TWIA regarding these practices. They are upset as well.
Continue Reading...I once told an Allstate Insurance Company adjuster that if forced, I was going to sue over a very small matter, less than a thousand dollars, because it simply was not right that Allstate was taking “betterment” deductions on the adjustment of an automobile comprehensive coverage loss to a friend of mine. This small county court case eventually resulted in a significant class action settlement in Florida in excess of $20 million dollars. I have no idea why some insurance companies do not try to settle earlier and would rather wait until the information uncovered results in a bad situation getting worse. Unfortunately, unless the litigation fortunes of one public adjusting company changes dramatically on appeal, a seven thousand dollar fee dispute could cost many public adjusters millions in class action lawsuits.
Continue Reading...As this is being posted, I am providing an ethics seminar to Florida public adjusters along with Merlin attorneys Bob Reynolds and Michelle Claverol. This follows my earlier posts on the topic, Public Adjusters Sued in Class Action for Wrongful Conduct--Are Unauthorized Practice of Law Class Action Suits Next? and Public Adjusters Targeted by Lawyers for Overcharging Policyholders.
Continue Reading...Dan Luby of the Florida Insurance News forwarded a Blog, Alex Sink's Cold War with the Insurance Commissioner, by Gary Fine regarding a possible “riff” between Alex Sink and Kevin McCarty. I find this curious because the two of them are leading consumer advocates for policyholders. I have never found Bill McCollum, Sink’s opponent for Florida Governor next year to be a supporter of policyholders. He is clearly the insurance industry’s candidate. Yet, the Blog noted:
Continue Reading...“Interestingly enough, Attorney General Bill McCollum - and Sink's likely rival for the governor's office in 2010 - praised McCarty's report, saying that Floridians should be "very pleased" with the amount of surplus lines coverage since it has helped decrease the need to have commercial coverage picked up by state-created insurers.”
Two significant pieces of information show a continued trend in the property insurance business and suggests that insurance customers should not rely on the loyalty of their insurance companies. An article by Bea Garcia in the Miami Herald, Florida May Gut Discounts for Hurricane Shutters highlights the industry wide issues raised by State Farm’s requests to eliminate discounts and “recalibrate” the terms of previously granted discounts for measures taken to protect structures from hurricane damage.
Continue Reading...State Farm is a tenacious opponent. "If you at first you don't succeed, try, try again" is a motto which must be emblazoned in bold letters somewhere in its Bloomington, Illinois, headquarters. But, down in the Sunshine State, some are criticizing State Farm for its creative methods of raising rates.
Continue Reading...I was going to write on the fascinating topic of errors and omissions aspects of 100 percent coinsurance penalties, but the response to yesterday’s Post, Should the Rust Family Stay in State Farm's Power and Ownership Given the Recent Record of Policyholder and Corporate Citizen Ethics, requires some follow up.
Continue Reading...State Farm lost its most significant claims case while Ed Rust Jr. was the "owner/manager" of State Farm. Ed Rust Jr. was the person who ultimately decided that thousands of State Farm policyholders would be underpaid or denied benefits in Mississippi. He is the chief corporate leader of State Farm Mutual, the corporation that allows its wholly owned subsidiary, State Farm Florida, to essentially lie about its financial situation. Everybody—especially Rust--knows that State Farm Florida is paying millions that would otherwise be profits to State Farm Mutual. I suspect a number of highly qualified agents and claims adjusters wonder why there has been no change in the top management for two generations. After all, in the United States, we believe in earning leadership rather than being born into it.
Continue Reading..."Should I Stay or Should I Go?" I imagine the State Farm claims employees and agents must be playing these classic lines from The Clash over and over. According to an article in yesterday's South Florida Sun-Sentinel, there is some speculation State Farm wants to stay and may try to politically strong-arm Florida into allowing it.
Continue Reading...There is no place for fraud by a policyholder or public insurance adjuster when reporting a loss to an insurance company. At this week's Florida Association of Public Insurance Adjusters (FAPIA) summer conference, our law firm emphasized this message. Like insurance company and independent adjusters, public adjusters are bound by ethical standards. I was happy to see that the FAPIA leadership made ethical and professional behavior a prominent theme of discussion at the conference. Both policyholders and the insurance industry can benefit greatly from increased emphasis and enforcement of public adjuster professional and ethical standards.
Continue Reading...The Insurance Journal ran an article, Florida Domestic Insurers Urge Veto of 'Dangerous' Deregulation Bill, which indicates a significant portion of Florida's insurance industry opposes State Farm, State Farm agents, and the other big insurers trying to get a competitive advantage from this legislation. The article outlined many of the competing views and stated in part:
Continue Reading...Governor Crist has signed the flawed Surplus Lines Bill (HB 853) into law. The story was reported today by the Insurance Journal in an article, Gov. Crist Signs Florida Surplus Lines Regulation Bill:
Continue Reading...Congressman Paul Kanjorski, Chairman of the Financial Services Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises, announced that his Subcommittee will hold a hearing to protect insurance consumers from risks in the insurance system and to prevent insurance companies from posing a systemic risk and threatening the American financial system. This systemic risk may be the federal government’s only legitimate concern when it comes to regulating insurance.
Continue Reading...My work day started at 4:30 am EDT in Tampa, with a trip to South Padre Island regarding a Hurricane Dolly dispute. It will end at sunset following meetings on Hurricane Ike matters. As my pilots are working on getting me safely home through the summer Gulf Coast weather, I am wondering how Judy Guice did in her argument earlier today before the Mississippi Supreme Court.
Continue Reading...The Texas Windstorm Insurance Association (TWIA) has a new operations plan and laws that affect it, assuming Governor Perry signs the legislation. The good news for TWIA policyholders is that the consumer protections of Chapter 541 are still in place. The bad news is that I predict rates are going to increase substantially.
Continue Reading...The Consumer Advocate for the Florida Public Interest Research Group, Brad Ashwell, wrote a letter published in the Gainesville Sun calling on consumers to urge Governor Crist to veto the State Farm bailout legislation. He clearly explained how the bill will harm Floridians:
"The problem is that this bill would remove consumer protections by no longer allowing the OIR to protect Floridians from excessive or discriminatory rate hikes as Kevin McCarty and his office have successfully done time and time again.
If HB 1171 becomes law, major insurance carriers would not only be able to charge whatever they like, they would also be able to game the system by manipulating rates, quoting excessive premiums to coastal homeowners, then dropping those policies if they choose to so they can maintain and grow inland policies where there is less exposure. The lack of predictability this would create is exactly what we don’t need in a state with an already fragile and overstrained property insurance market.
And perhaps the most troublesome provision is that the bill would help further grow the surpluses of these larger insurers while preventing small Florida-based carriers from doing the same. In this way the bill aims to provide an unfair competitive advantage to larger companies by discouraging across the board competition with smaller carriers. This would ultimately harm consumers and businesses by fostering an insurance market offering fewer choices in terms of dependable insurers. It’s also important to recognize that there’s no guarantee these large companies will continue writing policies in Florida.
Rather than deregulating the market, which hasn’t worked out in the past, we should be working on policy goals that support a more competitive insurance market that provides consumers with more affordable options. In short, we need more Florida-based companies competing, not fewer large insurers who dominate the market, essentially holding homeowners hostage, charging any rate they choose."
He is right, and nobody disputes his facts. Proponents of the bill argue it gives consumers the “choice” to pay excessive rates if they want. The legislators who voted for the bill did so because of political pressure, without understanding the consequences, or because they like the incentives offered by insurance companies for their votes. Either way, the “choice” is just a way to justify this bad legislation.
What happened to the time when a significant insurance coverage decision arrived and everybody in my line of work analyzed that topic for several years? Now, the insurance industry is writing so many new and differently worded forms, it is hard to rely upon case decisions as being of widespread significance. If a case decision is made which insurance companies want to avoid, they re-write the policy or the insurance industry lobbies legislators to change the statutory law "gaming" the insurance business to outcomes predetermined in the insurer's favor. Accordingly, I spend more time researching trends of politics. I also review insurance trade journals to contemplate how my policyholder clients may be impacted.
Continue Reading...The Texas legislature has its hands full this week with an omnibus biill regarding TWIA. Florida Governor Charlie Crist has to decide whether to veto various measures regarding insurance legislation. Additionally, three federal bills were just filed which may impact the landscape of how insurance is made available and sold.
Continue Reading...The politics of insurance is tough for consumer champions. The insurance lobby has many faces and methods of forcing its position. In Florida, the dirty campaign against those governmental officials who stand up to State Farm and the big insurance industry has begun in earnest. Florida has one of the most respected insurance commissioners in the country, Kevin McCarty. Mike Bennett, a relatively unknown state Senator, is attacking McCarty simply because McCarty voiced the opinion that Bennett’s insurance “choice” bill would hurt Floridians.
Continue Reading...I was reading a blog by Steve Piontech, Editor-in-Chief of the National Underwriter Life & Health. His remarks seemed to add another valid reason why federal charter and the choice of a sole federal regulator needs to be avoided:
Continue Reading...Imagine – all kinds of legislation, hand in hand with lobbying and political positioning, just in time for the start of hurricane season on June 1. A couple of recent news stories point out the possible direction that several key measures may be heading.
Continue Reading...I am an advocate for insurance policyholders. I am accountable to them. Our firm accomplishes the results they expect through a "can do" outlook, innovation and the timeless All-American mother of most success-- hard work.
I was imagining what it would be like to make a living as an insurance industry lobbyist. Lobbyists are usually lawyers or staffers that go by a title such as a "governmental affairs assistant." Some are the directors of various insurance trade organizations. Insurance companies measure their lobbyists’ accountability in a different way.
Continue Reading...Imagine if the only way politicians could raise campaign money was from the people who could vote for them. Until that happens, the insurance industry, which is among the strongest lobbying powers, will continue to influence otherwise well meaning public servants into making laws serving only insurers. Thank goodness there are a few independent consumer-centered public service groups with expertise to take on the sophisticated and well funded insurance lobbyists and their lawyers.
Continue Reading...The Florida Consumer Action Network (FCAN) has urged Florida Governor Charlie Crist to veto recently passed legislation that would allow insurers to raise rates without approval by the Office of Insurance Regulation. FCAN is probably Florida’s largest consumer action group. The Bradenton Herald quoted foes of the legislation who refer to the bill as "the State Farm bailout bill." I agree.
Continue Reading...As I noted in a blog post last week, House Bill 853, legislation intended to exclude surplus lines insurance carriers from an entire Chapter of the Insurance Code, was poised to pass both chambers of the legislature -- with only the hope that time would run out before they could agree on the wording.
Continue Reading...Numerous newspaper articles have discussed this session’s bills which impact the insurance industry. The anti-consumer bill, which provides for deregulation of insurance rates, passed. I expect Governor Crist will veto that bill as was previously reported.
Continue Reading...Democratic Senator Jon Tester of Montana is standing up to the insurance industry, opposing the industry’s push for federal charter of the property and casualty industry. In an article in the National Underwriter, Tester noted that state regulation has worked regarding the insurance industry:
Continue Reading...Florida Insurance Commissioner Kevin McCarty is working tirelessly for fair treatment of insurance consumers. It is amusing that the Florida legislature may give into State Farm's bullying and even allow higher insurance rates, which McCarty says are unnecessary. Some of our legislators are pandering to State Farm and the Florida insurance industry by using the usual "word spin" games. Deregulating rates under the guise of "consumer choice" will simply lead to higher premiums.
Continue Reading...Most of the time, I battle large corporate insurers in David vs. Goliath like battles. I find it amusing that State Farm's attorneys are struggling in this fight, given State Farm’s enormous size and power. Today, State Farm's lawyers, lead by the very able Mark Delegal, are lobbying Florida's leaders on a very anti-consumer bill. This bill would allow State Farm to charge whatever rate it wants. Florida Governor Charlie Crist is reportedly prepared to veto such legislation.
Continue Reading...The Associated Press reported that the National Association of Insurance Commissioners (NAIC) has come out strongly against the proposed Federal Charter for property and casualty insurance companies. As I have now stated in two recent posts, (read them here and here), this federal legislation is not in the interests of policyholders and is an attempt by some insurance carriers to escape accountability and increase their individual profitability.
Continue Reading...Recently, Allstate has accused other insurers of investing in credit default swaps. Does Allstate have knowledge of insurers engaging in this illegal activity? Or are these allegations a facade for the new federal oversight that would place Allstate under control of the federal government. My view on this topic is pointed:
Allstate and other major insurers are seeking federal charter to avoid state consumer protection laws and to gain an economic advantage over other property and casualty insurers. The federal legislation offers no specified safeguards for consumers, and provides for the same inept federal regulation that allowed the collapse of our financial system.
Continue Reading...If you love dealing with your group health insurance bills and claims, you will be overjoyed with the new legislation proposed in Congress allowing property insurance companies to apply for a Federal Charter. This proposed legislation is the most unfair and anti-consumer federal legislation filed in recent years.
Continue Reading...Every now and then, somebody writes something in a prominent newspaper that sounds an awful lot like my rhetoric. The Houston Chronicle recently published such a piece calling for major federal legislative insurance reform. Kia Franklin wrote the editorial. I know little of her, but her opinion sounds very similar to calls for reform made by consumer advocates in Florida following the 2004 hurricanes and from Congressman Gene Taylor of Mississippi following Katrina. She notes the claims frustratration of many in Texas following Dolly, Gustav, and Ike:
"As Hurricane Ike survivors rebuild their homes and their lives, their harrowing stories may soon become all-too-similar to those of Hurricane Katrina and Hurricane Rita survivors: people wrongfully denied insurance claims, or offered inadequate payments, for damages they were told their insurance policies would cover."Continue Reading...
Federal lawmakers have filed two bills (S. 618 and H.R. 1081 ) calling for the repeal of long existing antitrust exemptions given to the insurance industry by the McCarran-Ferguson Act. (For details on how this exemption came to be see, Government Accountability Office, Legal Principles Defining the Scope of the Federal Antitrust Exemption for Insurance, Report B-304474 (March 2005) ) However, it seems pointless to talk about repealing this exemption, in light of the fact that antitrust rules which insurance companies are not exempt from are rarely investigated, much less prosecuted.
Continue Reading...Florida newspaper stories exposing the recent insurance rate hike requests should not come as a surprise to anyone. This is just the latest example of why the public needs regulation of the insurance industry. It is a business built upon future promises that are routinely broken when the return performance is due. Why the Florida legislature seemed convinced that by shifting the risk of catastrophic loss to its citizens would actually result in lower premiums is bewildering. It is an unrealistic to expect that an industry, which lives by the sharp letter of the law and fineprint of contract, will follow through on promised rate reductions in the absence of legal or contractual enforcement; this laissez-faire approach suggests that the industry still has a strong lobby in Tallahassee.
Continue Reading...It was recently reported by Paige St. John that the Florida Department of Financial Services is not keeping complete copies of consumer complaints (civil remedy notices) and insurance company responses. Instead, the Department's legal staff has determined that according to section 624.155 of the Florida Statutes they are only required to maintain two documents. One is the civil remedy notice and the other is the report of the disposition. Any other documents received (i.e. attachments, responses, etc.) are not part of their statutory duty pursuant to the Florida Sunshine Records laws or section 624.155 to be retained and are being discarded. Legal counsel having differing opinions about how to interpret the law is not new.
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