Contents
- Cover
- Editors Desk: Private Passenger Auto and Auto Insurer Rankings
- Contents: Auto Insurers and Parametric Insurance
- Bests Calendar and Executive Changes
- Executive Changes and Web Traffic
- Emerging Leaders Conference and Masthead Forestay
- At Large and Insurance Wellness Programs
- Risk Adviser and Business Judgment Rule
- Issues and Answers: Data and Asset Management
- Issues and Answers: Technology Revolution and Data Security
- Issues and Answers: Asset Allocation Strategy and 2024 Outlook
- What AM Best Says: Long-Term Care Claims Increase
- Life Insurance: Life Reinsurance Growth and Asia and Europe
- Auto Costs: Underwriting Losses and Private Passenger Insurers
- Auto Costs and Rate Adequacy
- Auto Electric Vehicles: Insurance and Battery
- Auto Electric Vehicles: Repair Cost and Claims Frequency
- Bests Rankings Auto: Top US Commercial and Top US Liability
- Bests Rankings Auto: Top US Private Passenger and Top US Total Auto
- Bests Rankings Auto: All Lines By State and Auto Liability By State
- Bests Rankings: Physical Damage and Private Passenger By State
- Bests Rankings: US Commercial By State and Private Passenger No Fault
- Bests Rankings: Commercial Auto No Fault and Commercial Auto Liability
- Parametric Insurance and Coral Reefs
- Parametric Insurance: Hawaii and Mexico
- Bests Rankings: L/H Asset Distribution and Private Flood and Cyber
- Bests Rankings Caribbean Insurers and What AM Best Says
- What AM Best Says and Underwriting Loss Control
- Underwriting Loss Control and Insurance Media
- Insurance Media and Insurance Guys Podcast
- State Rate Filings: North Carolina Auto Rates and Private Passenger
- Book Store and App Store
- Trending News and Trending Research
- AM Best Webinars and AM Best TV Audio
- Rating Actions and Americas Life/Health
- Rating Actions: Americas Life/Health and Americas Property/Casualty
- Rating Actions: Americas P/C and Europe Middle East and Africa
- Rating Actions: Holding Companies and Financial Strength Ratings
- Rating Actions and Corporate Changes
- Corporate Changes and Preferred Publisher Program
- Insurance Professional Resources and Industry Updates
- Last Word and Masthead Backstay
- Back Cover
Claims and Litigation
Already Feeling Effects of
Florida’s New Tort Reforms
F
lorida tort reforms that took effect March 24 already
have impacted claims and litigation, according to G.
Jeffrey Vernis, managing partner, Vernis & Bowling, in
an article posted on the law firm’s website.
The legislation prompted plaintiffs’ attorneys to file
tens of thousands of lawsuits before the effective date
of the new law, which reduces the statute of limitations
for negligence claims, gives insurers a 90-day grace
period for bad faith claims, changes comparative fault to
contributory negligence, and includes other procedural
changes to “even the playing field,” Vernis wrote.
The new law eliminates one-way attorney fees for
plaintiffs in first-party cases. One-way attorney fees
are now limited to instances when the insurer denies
coverage and the insured prevails in a declaratory action.
The amount of attorney fees is limited to the reasonable
lodestar fee (reasonable hourly rate).
Some of the significant changes in the law include:
•
The new law reduces the statute of limitations for
claims based on negligence from four years to two.
•
Under the new law, in any negligence action, if
a claimant is found to be more at fault than the
defendant, the plaintiff generally will be barred from
any recovery from that defendant.
•
The jury can now “consider the fault of all persons
who contributed to the injury.”
•
No statutory or common law bad faith claim can
be brought if the insurer tenders its policy limits
or tenders the amount demanded by the claimant
within 90 days after receiving actual notice of a claim
“which is accompanied by sufficient evidence to
support the amount of the claim.” The new law also
states that “mere negligence alone is insufficient” to
constitute an insurer’s bad faith.
•
The new law includes specific language on letters
of protection and limits the amounts that may be
charged by the medical provider and what may be
admitted into evidence and recovered. The medical
charge evidence now may only be the amount that
has been actually paid, regardless of payment source.
Established in 1970, Vernis & Bowling is a full-service
law firm with offices located throughout Florida, Georgia,
Alabama, Mississippi, North Carolina and South Carolina.
The firm, which represents individuals, businesses,
professionals, insurance carriers, self-insureds,
governmental entities, brokers, underwriters, agents and
insureds, is a qualified member in Best’s Recommended
Insurance Attorneys - General Defense.
78
New York’s Orange County Bar Association Elects
Drake Loeb Partner as President
D
rake Loeb partner Ralph L. Puglielle Jr. has been
elected president of the Orange County Bar
Association of New York. Puglielle was sworn in by
State Supreme Court Justice Maria S. Vazquez-Doles
at the OCBA’s annual business dinner on June 22.
Drake Loeb is a qualified member in Best’s
Recommended Insurance Attorneys - General Defense.
Puglielle has served as a contributing member of the
bar association for several years, holding positions such
as vice president and treasurer.
Puglielle also acts as legal counsel and president to
the Newburgh chapter of UNICO, the largest Italian-
American service organization in the United States, and
recently was appointed District Governor for New York
District 1.
The Orange County Bar, formed in 1910, has over 400
members drawn from the counties of Orange, Ulster,
Sullivan, Dutchess, Putnam, Rockland and Westchester,
in southern New York.
Scan for more information about these
firms and Best’s Insurance Professional
Resources.
BEST’S REVIEW
•
OCTOBER
Best’s Insurance
Professional Resources
The following company is a newly qualified member
in Best’s Insurance Professional Resources and Best’s
Recommended Insurance Adjusters:
Johnston & Associates Inc.
Insurance Adjusters
830 Crescent Centre Drive
Suite 220
Franklin, TN, USA 37067
615-373-0500
Scan to
view profile.
Insurance Professional Resources
Senators, Witnesses Agree Risk Reduction, Infrastructure
Investment Are Critical in P/C Markets
Mitigating the impact of fires, floods and high winds are cost-effective
solutions compared to spending on recovery and rebuilding from a
catastrophe, speakers at a recent U.S. Senate hearing said.
P
anelists at a recent U.S. Senate hearing on
consumer challenges with property/casualty
insurance found numerous areas in which to
disagree but reached one area of common ground:
the need to proactively reduce risk caused by climate
change.
“Our first, second and third thing we should be
doing is reducing the risk,” said Doug Heller, director
of insurance at the Consumer Federation of America.
Heller was among the witnesses to testify at the
Senate Banking, Housing, and Urban Affairs hearing
on challenges in the property insurance market and
its impact on consumers.
Senators and speakers of both political sides said
incentivizing homeowners to build or harden their
homes and investing in public infrastructure to
mitigate the impact of fires, floods and high winds
are cost-effective solutions compared to spending on
recovery and rebuilding after a catastrophe.
The United States needs to take the “front end of
the solution” as seriously as it does the “back end,”
Heller said.
Alabama Sen. Katie Britt touted the home
hardening incentive program in her state, which
has strengthened thousands of homes and is being
emulated in other states, including Louisiana.
And Jerry Theodorou, policy director, finance,
insurance and trade at the R Street Institute, said he
fortified his home and simply asked his homeowners
carrier to provide a credit for reducing the risk on his
property.
Even before the hearing ended, the American
Property Casualty Insurance Association’s Nat Wienecke
issued a statement endorsing mitigation strategies.
“Property/casualty insurers have been long-time
leaders in addressing the impacts of climate change
by advocating for stronger mitigation, resilience
efforts, and building codes,” he said in a statement.
“Reducing our risk must continue to be a shared
priority among us all, and we must work together
to adapt and increase our resilience in the face of
climate-fueled disasters.”
R Street, however, takes a dim view of the federal
government’s role in insurance markets, saying the
evidence is in the National Flood Insurance Program
and crop insurance. However well-intentioned,
federal intervention fails, he said.
Theodorou recommended a long-term
reauthorization of the NFIP to bring certainty to the
market, and Heller suggested a federal backstop to
“push” the flood insurance market into homeowners
coverage.
Speakers also differed on whether the federal
government should have a role in how climate change
impacts property coverage.
Heller, under questioning from Sen. Elizabeth
Warren, said the Federal Insurance Office’s demand
for climate data from insurers would help the public
understand the interrelationship of climate and
insurance, but Theodorou called FIO’s demands
“superfluous.”
The data call would be a duplicative burden,
because insurers already are at the lead in assessing
climate risk, said Jimi Grande, senior vice president
of federal and political affairs for the National
Association of Mutual Insurance Companies.
The two sides also disagreed about what to do in
California, where Sen. Sherrod Brown, committee
chairman, said insurer exits from the state present “a
disturbing and abrupt trend.”
Heller argued it’s “unacceptable” for insurers to
take premiums from consumers for years, only to exit
or limit participation in the market during periods of
high climate impacts—especially as carriers continue
to back fossil fuel projects that increase climate-
changing emissions.
California should get rid of the “straitjacketing”
Proposition 103, the voter-approved ballot measure
that doesn’t allow carriers to factor reinsurance costs
or forward-looking climate modeling results in rates,
Theodorou said.
—Timothy Darragh
BEST’S REVIEW
•
OCTOBER
79
Industry Updates
80
Michigan Director of Captives Sees Future in Cannabis,
Auto, Life Sectors
The growing program also is seeing new formations from other states
and is poised to receive a record number of premium by the end of the
year, according to David Piner, director of the captive program, Michigan
Department of Insurance and Financial Services.
by Lori Chordas
D
avid Piner, director of the captive program
for Michigan Department of Insurance
and Financial Services, said he expects the
state to exceed $3 billion in premium by the
end of 2023. Piner spoke with AM Best TV at
the annual Vermont Captive
Insurance Association conference in
Burlington in August.
Following is an edited transcript
of the interview.
Can you tell us about the
current state of Michigan’s
captive market?
Right now, the state of Michigan
is still growing its captive program.
Last year, we wrote about $2.5
billion in premium. I would expect
that to increase by at least half a
billion for 2023. By year-end, we
will exceed $3 billion in premium.
Thus far in 2023, we have licensed three
new captives. We have a fourth that received its
temporary license, and we’re waiting on the funding
to come through. I have three applications that are
going to be submitted within the next 30 days.
What types of new captive formations are
you seeing in the state?
Michigan being the hub of the automotive
industry for the world, many of the captives that
we do have in Michigan have ties to the auto
industry, whether they’re a full-blown manufacturer
or whether or not they have capabilities to provide
parts for cars or what have you.
We do see a lot of captives in the automobile
Lori Chordas
is a senior associate editor. She can be reached at
lori.chordas@ambest.com.
BEST’S REVIEW
•
OCTOBER
space. Michigan is home to many traditional life
insurance companies. Because of the reserving issues
with some of those life insurance companies, they
have a need for captives.
Those would be the two biggest areas that we see
growth, as well as the cannabis industry. Michigan
was the first domicile to license a
captive in the cannabis space, and
that happened about five years ago.
Are you seeing
redomestication of captives
coming into the state?
One of the new captives
that we licensed this year is a
[redomestication] from the state of
Vermont. Again, they have ties to
the auto industry. They have their
national headquarters in Michigan.
Given that Michigan has only
had captive laws on the books for
15 years, when they first started up their captive,
Michigan wasn’t an option. Now that it is, we’re
seeing some Michigan companies come home.
What are you seeing on the regulatory
front? Is there new legislation on the
horizon that will impact captives, and what
impact will that have?
We have a proposal down at the Capitol
that would serve as a cleanup to the original
legislation that came through 15, 16 years ago
that had some omissions and some things that
needed cleanup.
We’re [also] looking to change the definition
of sponsored captive to open it up more so we
would have more cell captives, as well as looking
to lower our application fee. We’re going to cut
it in half. That is at the governor’s office being
discussed.
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