Ringless voicemail: Florida breaks ground with new law

The phone never rings. But somehow you have a voicemail. It’s a business selling something, even though you’re on the Do Not Call list. Is that legal?

Not in Florida as of July 1. This week Gov. Rick Scott signed SB 568, which expands the Do Not Call list to include direct-to-voicemail sales calls.

That puts the state at the forefront of blocking such messages, said William E. Raney, a Kansas City attorney whose firm, Copilevitz & Canter, advises clients on telemarketing laws.

“As far as I know, it’s unique,” Raney said. “Florida is the first state legislature I know of that has explicitly said that.”

Technology often gets out ahead of regulation in such matters. A petition by telemarketing concerns to ask the Federal Communications Commission to rule such messages are not subject to Do Not Call rules — because they never ring — was withdrawn last year without a ruling under a cloud of adverse publicity.

But it’s already out there. One consumer filed a lawsuit against a Naples, Florida car dealer for using such tactics. The case has since been settled without a court ruling, a Florida Senate staff analysis noted.

Three states not including Florida raised a stink about the FCC petition made by a telemarketing concern called All About The Message, The Palm Beach Post reported last year.

“Granting companies a free pass to push ringless voice messages to consumers’ phones just adds more robocalls and causes significant financial harm to those who are charged for checking their messages,” said Massachusetts Attorney General Maura Healey.

It’s a move that can defeat many call-blocking apps, states argued. Some phone plans have limits or charge fees for storing and checking messages. Unbridled, it could leave consumers with virtually no control over technology that can pump out such calls literally by the billions.

Consider: An estimated 2.8 billion robocalls, or automated calls of all kinds, were made to U.S. consumers in the month of December alone. In 2017, the FCC received 155,282 consumer complaints about robocalls, including federal Do Not Call List violations, call spoofing, and solicitations made by an automated recording, the staff of the Florida Senate’s rules committee noted.

Attempts  to seek comment from an industry group, the Professional Association for Customer Engagement, were not immediately successful. But some in the business make the case such messages are less disruptive than regular calls.

“The act of depositing a voice mail on a voice mail service without dialing a consumers’ cellular telephone line does not result in the kind of disruptions to a consumer’s life — dead air calls, calls interrupting consumers at inconvenient times or delivery charges to consumers,” All About The Message argued in its FCC petition.

Florida’s law does not mean you will never receive a ringless voicemail if you are on the Do Not Call list, however.  First, some scofflaw telemarketers ignore Do Not Call for all sorts of messages. They are often based in other countries or using fake or “spoofed” numbers, and they know it’s hard to police them in an age of global calling by way of the Internet. At best they are using questionable methods to steer leads to legitimate businesses. At worst they’re outright scams trying to steal money or personal information.

But there’s also this: the law allows certain calls by schools, non-profit and charitable groups, or people taking surveys. Florida law says the Do Not Call restrictions do not apply to “a charitable or political organization that is seeking donations,” according to the Senate staff analysis.

Speaking of politics, the Republican National Committee filed a brief with the FCC arguing ringless voicemails, even by commercial advertisers, should be OK. Why? With no ring, it “does not constitute a call” that is subject to the Telephone Consumer Protection Act, the RNC’s brief said. The RNC further expressed concerns an adverse ruling could inhibit free political speech protected by the First Amendment.

While the dust settles on what is legal for political direct-voicemailers, there’s also the practical question of  whether it’s a smart marketing play at this point. Publicity over the FCC petition — which set the stage for Florida’s law — suggests not everyone views ringless voicemails as a delightful surprise to brighten their day.

To get on the Do Not Call list, go here:





After Hurricane Irma: How emergency insurance order affects you

An emergency order from Florida’s insurance commissioner issued Wednesday evening gives consumers special protections after Hurricane Irma, including 90 additional days to file claims and a temporary freeze on rate hikes and cancellations.

“At the direction of Gov. Scott, Insurance Commissioner David Altmaier issued an emergency order suspending and activating certain insurance rules and statutes for the health, safety, and welfare of Florida’s policyholders,” a statement from regulators said.

“Among other provisions, the order provides an additional 90 days to policyholders to supply information to their insurance company; prohibits insurance companies from canceling or non-renewing policies covering residential properties damaged by the hurricane for at least 90 days; and freezes any and all efforts to increase rates on policyholders for 90 days,” the statement said.

Among other things, the order says notices of cancellation issued or mailed after Aug. 25 shall with be withdrawn and reissued on or after Oct. 15.

Gov. Scott initiated the process Tuesday with an executive order directing the insurance commissioner to take action.

“As Hurricane Irma leaves our state, it is critical that Floridians have every resource available to quickly recover,”  Scott said then.  “By providing additional protections for consumers, we are making sure that each family has ample opportunity to get their claims filed in a timely manner.”

Earlier in the day Wednesday, the Florida Property & Casualty Association, representing a number of state-based companies, said it was awaiting details of the final order, which “will provide our members with the specificity they need to properly implement the Governor’s directive. ”

The group said it is committed to working with state officials to make consumers aware of “pitfalls” associated with contractors who ask homeowners to sign over control of insurance benefits, which industry officials can lead to abuses and inflated claims.

The Consumer Federation of America warned against using unlicensed or “fly by night” contractors, but also reminded consumers they can seek other professional opinions and quotes if they are not confident adjusters and contractors arranged by the insurance company are offering full and fair payment.

“Not all insurance companies handle claims badly, so go into the claims process with an open mind,” said J. Robert Hunter, CFA’s Director of Insurance and former Administrator of the National Flood Insurance Program and Texas Insurance Commissioner. “Be vigilant, though, and be ready to stand up for yourself and your family, or you run the real risk of being shortchanged.”


CBO: Revised Senate health bill still leaves 22 million uninsured

Budget savings are larger but a revised Senate health bill still leaves 22 million uninsured by 2026, the Congressional Budget Office concluded Thursday.

Senate Majority Leader Mitch McConnell tweeted Thursday that “Americans deserve better” than Obamacare, but Consumers Union called the revised bill “just as harmful as before.”

Gov. Rick Scott spoke to members of the media at Orangetheory Fitness in Boca Raton Wednesday. (Bruce R. Bennett / The Palm Beach Post)

The tweaked Better Care Reconciliation Act contributes $420 billion to budget savings, more than some previous versions, largely by capping spending on Medicaid while keeping some Affordable Care Act taxes in place, CBO found.

About 15 million people will lose or choose not to buy insurance in 2018 compared to leaving current law intact, analysts projected.  By 2026, 82 percent of all U.S. residents under age 65 would be insured, compared with 90 percent under current law, they said.

CBO said fewer people will have coverage for reasons including a rollback of Medicaid expansion, reductions in subsidies to make insurance cheaper for lower-income consumers and the loss of penalties for not having health insurance.

The revised Senate bill would keep some ACA  taxes in place to give more money to the states to lower consumer premiums and fight opioid addiction.

The CBO scored a version that does not include the so-called Cruz Amendment to allow insurers to offer cheaper “skinny” plans if they offer at least one compliant with the Affordable Care Act. Critics say the problem there is it could segregate sick people into what amount to high-risk pools in ACA plans.

The parade of revisions and different versions can get confusing, but Senate leaders have said they still plan to push for a vote next week. Still, prospects appear cloudy at best as several GOP senators have publicly balked at this plan or reviving an older proposal to repeal Obamacare in two years and work on a replacement in the meantime.

Florida Gov. Rick Scott said Wednesday in Boca Raton he continues to support repeal because Obamacare has been a “disaster.”

Trumpcare: DC-bound Gov. Scott diagnoses too few taxpayer advocates

Florida Gov. Rick Scott said he is heading to Washington this week to stick up for taxpayers at risk of getting overlooked in the obsessive focus on millions who could lose health care or get charged more.

That’s good news for taxpayers making more than $200,000 a year, who risk being denied major tax cuts if the GOP House and Senate fail to agree on an Obamacare overhaul.

Gov. Rick Scott speaking during a visit to West Palm Beach on June 13, 2017,  with House Speaker Richard Corcoran (left). (Bruce R. Bennett / The Palm Beach Post)

“There seems to be a lot of people advocating for more government and higher costs in Washington and not a lot of people advocating on behalf of taxpayers,” Scott said in statement ahead of his trip. “I look forward to traveling to Washington to fight for Florida families and ensure there is a health care proposal that dismantles the terrible, expensive mess of Obamacare. Let’s remember, costs have skyrocketed under Obamacare and we need a new health care policy that allows patients to have access to quality healthcare at an affordable price.”

The House and Senate GOP plans differ on a few points, but agree on the basics of one thing: a $1 trillion tax cut for corporations and high earners, including individuals making more than $200,000 a year, or $250,000 a year for couples. Those taxes were imposed to pay for the Affordable Care Act.

Scott’s office said it did not have figures handy for how many Floridians would benefit.

The median household income in Florida in 2015 was $49,426, according to Census data, down from $54,646 in 2007. About 4.1 percent of Florida households have been calculated to make more than $200,000 a  year, though that not all of them would be subject to the ACA’s investment and payroll taxes because a household with a couple filing jointly would be affected on income above $250,000.

About 90 percent of the benefit from repealing the taxes would go to the top 1 percent of U.S. earners, who make $700,000 or more, The Associated Press reported.

Billionaire Warren Buffett told CNBC his personal tax bill would be 17 percent lower, about $680,000 on his tax bill of a little less than $4 million.

GOP donor Sheldon Adelson could see his tax bill trimmed by about $43.5 million, Business Insider reported, citing an analysis from the Center for American Progress Action Fund.

Scott would have saved about $246,000 on his 2013 tax return, Politico reported.

Scott, a former hospital company executive, does not take his $130,273 annual state salary. He said he wants to create jobs and cut taxes for everybody, citing 55 tax cuts for $6.5 billion in his tenure by April.

Immediate tax cuts retroactive to the start of 2017 would affect those making $200,000 or more a year. More broadly, the long-term direction of Medicaid, a critical focus of Obamacare replacement efforts, affects a deeper base of taxpayers who support the program through state and U.S. taxes. Medicaid covers 4 million Floridians, including about half the childbirths, 70 percent of seniors in nursing homes and 41 percent of Palm Beach County’s children.

As U.S. Rep. Brian Mast, R-Palm City, has pointed out in town hall meetings, removing Obamacare’s tax penalty of $695 or more for not having health insurance would also represent a tax cut. That would provide a measure of relief for those who do not want coverage, hope they won’t need it or cannot afford it anyway. The decision by Florida’s GOP-led legislature not to expand Medicaid, to protect state taxpayers from having to pay a portion of those costs in later years, left about 800,000 residents unable to qualify for that program’s  coverage. At the same, many don’t qualify for government help on the ACA marketplace because the subsidy plan tied to income levels assumed states would expand Medicaid.

The Congressional Budget Office projected 23 million fewer people would have health coverage in 2026 under the House bill compared to leaving current law intact. Younger, healthier and higher-income people could see their health costs fall over time, partly through tax credits, but older, sicker and lower-income people stand to pay more as they lose subsidies or insurers are allowed to charge them more, CBO found.  People with pre-existing conditions could face “extremely high costs” in states allowed to waive Obamacare rules and put them in, for example, high-risk pools, the report said.

The Senate plan provides more subsidies to low-income people compared to the House bill, but at a reduced level compared to Obamacare, and makes deeper long-term cuts to Medicaid. Supporters say it protects people with pre-existing conditions, though advocacy group Consumers Union warned it could let insurers put annual and lifetime caps on benefits, posing a threat to people with illnesses that are costly to treat.

CBO expects to post its analysis of the Senate bill early this week on its website.

Though several GOP senators have said they can’t support it without changes, Senate leaders have said they hope to see the plan come to a vote as early as this week.

Obamacare’s subsidies tied to income mean that about nine out of 10 of the roughly 1.5 million Floridians buying ACA marketplace plans pay an average premium of about $84 month. Because the subsidies rise with rate increases, that cost is not likely to change very much for them even though six insurers filed for a rate increase averaging about 17 percent for ACA market plans in Florida in 2018. Customers without subsidies feel the full impact.

Scott said he is going to Washington this week on a  schedule whose details will be announced later.

“I would like to thank Sen. Mitch McConnell and the Senate Republicans for working to eliminate the high taxes, fees and unreasonable mandates of Obamacare,” Scott said. “I also want to thank President Trump for his commitment to repeal and replace Obamacare. I have been carefully reviewing the bill and next week, I will be traveling to Washington to meet with Congressional leaders to provide input on how we can make the bill better for Floridians.”

He highlighted some points he plans to make.

“First, all states must be treated equitably,” Scott said. “Florida taxpayers deserve the same treatment as every other state under the Medicaid program. Second, every American, including those with pre-existing conditions, should have the ability to buy any kind of insurance they want. This will drive down costs and give people the flexibility and power to determine what they want to buy.”


NEW: Florida’s uninsured adults rise, among US highest pre-Trumpcare

Florida’s number of uninsured adults is rising, new numbers show, even as Congress and the Trump administration consider legislation that could push millions more out of health coverage.

Gov. Rick Scott

The nation’s uninsured rate remained essentially unchanged at an all-time low of 9 percent in 2016, but 13.8 percent of Floridians of all ages lacked health coverage, according to the U.S. Centers for Disease Control’s early release of estimates from the national health interview survey. Florida’s rate was third highest in the country.

Among people 18 to 64, the state’s uninsured rate climbed to 20 percent, up from 18.7 percent in 2015.

Florida rejected Medicaid expansion under the Affordable Care Act, shunning an option that lowered uninsured rates in many other states. State Republican leaders called it too expensive.

A big part of the political calculus heading toward 2018 elections: Whether voters blame Democrat-designed Obamacare or GOP stewardship for any perceived problems. Town hall meetings certainly show how prickly the issue can get.

President Trump backed legislation the House passed that rolls back close to $1 trillion in taxes. Congressional Budget Office analysts say the bill could lower costs for healthier, younger and higher-income people, but it is projected to raise costs for older, sicker and lower-income folks and push more Americans out of coverage — up to 24 million. Revised CBO projections could arrive next week, but it’s in the Senate’s hands now.

Florida’s Republican Gov. Rick Scott, urged by President Trump to run against Democrat Bill Nelson for a 2018 U.S. Senate seat, responded through a spokeswoman to a request for comment from The Palm Beach Post.

“As someone who grew up without access to healthcare, Gov. Scott knows firsthand how important improving access is to people across the state,” press secretary Lauren Schenone said. “The Governor has not gone line by line on the current bill but he believes Congress cannot give up on getting rid of Obamacare and is encouraged that something is being done.”

Scott supported increased flexibility in the House bill to let states have greater control over how they spend federal health dollars. In addition, Florida successfully lobbied the Trump administration for almost $1 billion in increased “Low Income Pool” money to help cover vulnerable people.

But supporters of the 2010 Affordable Care Act said the latest  numbers highlight the stark choices facing the country now. They show 20 million more Americans gained coverage since the ACA passed. Florida led the nation in people using the federal marketplace to buy policies, more than 1.5 million.

“That means, when Donald Trump was elected, more Americans had health insurance than ever before,” said Ben Wakana, former health spokesman in the Obama administration. “There’s no reason for us to go backward — but unfortunately there’s a big risk that we will, due to Republicans’ relentless repeal drive and Trump’s sabotage of the health care system. Your move, Mr. Trump.”

As of Tuesday night, Trump, occupied by other things, had not tweeted about health since May 7, when he urged the Senate to take up the bill the House passed: “Republican Senators will not let the American people down! ObamaCare premiums and deductibles are way up – it was a lie and it is dead!”

Even before the Senate has acted, the Trump administration’s Centers for Medicare and Medicaid Services released new information Tuesday that it said would help states seek waivers from requirements in the Affordable Care Act. The ACA already allows some waivers, and more changes could come under proposed legislation.

“CMS is helping to provide guidance to states who want to pursue solutions to help lower costs and increase coverage choices for Americans struggling with unaffordable premiums and reduced competition in the insurance market, brought on by the ACA,” the release said.

Opponents say Trump’s own threats to withhold key Obamacare funding, such as billions in “cost sharing” dollars to lower what consumers pay, are helping bring about reduced competition, bolting insurers and rising premiums. The top Democrat in the Senate, Chuck Schumer, called such tactics a “gambit to hold hostage health care for millions of Americans.”

Florida’s numbers reflect its “coverage gap,” said Joseph F. Pennisi, executive director of the Florida Policy Institute, which calls itself  a “common-sense” nonprofit think tank promoting general prosperity based in Lake Mary.

“There are more than 500,000 Floridians in this category, because they make too much money to qualify under Florida’s extremely restrictive Medicaid income standards (for a family of four, the adults must have an annual income of less than $7,000 to be eligible) but too little to qualify for subsidies in the federal marketplace,” Pennisi said by email. “There is a dramatic difference in uninsured rates between states that expanded Medicaid and non-expansion states. Florida could see a major reduction in its uninsured rate if it expands coverage.”

He continued, “Florida made some gains in terms of the percentage of insured residents thanks to the ACA. However, that’s being threatened now by the American Health Care Act, which would result in millions of people across the U.S. losing coverage.”

Highest uninsured rates for health

All ages

Texas 18.7%

Oklahoma 16.5 %

Florida 13.8%

U.S 9%

Adults 18-64

Florida 2016  20%

Florida 2015  18.7%

Florida 2014  23%

Source: Centers for Disease Control

Geico hustles to close ‘gaps’ for Uber, Lyft drivers as bill signed

Gov. Rick Scott has signed a bill to set insurance standards for rideshare services like Uber and Lyft, but Florida’s top car insurer does not necessarily cover their drivers at the moment — even if they have Geico policies and think they are covered.

(Palm Beach Post staff file photo)

Geico says a new rideshare policy is in the works for Florida, and state regulators say they are set to complete a review of the filing by May 15. But it highlights potential confusion and gaps for tens of thousands of drivers and riders as state and industry officials try to keep pace with the surging gig business.

And it could mean higher costs for drivers if they are asked to buy a form of commercial coverage instead of a regular personal policy.

Judging by what is happening in other states, at least some competing companies are likely to offer a supplement to a standard personal policy that covers a rideshare driver in what is known as “period 1,” before accepting a ride. That still represents an increase in costs to the driver, but it can be considerably cheaper than buying a commercial policy.

The new state law, HB 221, was signed by the governor Tuesday. It takes effect July 1. It sets various levels of insurance that either the rideshare company or driver’s personal  policy must provide as drivers turn apps off and on and transition from regular civilians to the ride job. HB 221 describes the drivers as independent contractors.

The tricky part is that many standard personal policies exclude “livery” service, meaning driving for hire.

Rideshare companies like Uber stand ready to provide $1 million coverage if a passenger is actually in the vehicle, and lower amounts if the app is on and the driver has agreed to a pick-up, for example.

But it can be tougher to determine whose insurance, if any, applies in more ambiguous situations. Take a driver heading to a festival to get in position for potential fares — when is that person on duty or off?  And what about a driver who did not tell his insurer he does rideshare work, out of ignorance or fear he would be charged more? In an accident, does he risk having coverage denied completely, for himself or anyone he might hurt?

“It is common for personal policies to have livery exclusions,” said Geico spokesman Othello Powell.  “Many insurers elect to cancel the personal policy because it is not offering the right coverage for the policyholder.  We believe we offer the right coverage in 36 states with our rideshare policy which also covers on demand package delivery that is not typically covered on personal policies.”

Florida is not among the 36 states — yet.

“We are excited to share that we have filed our rideshare product in Florida and are currently waiting on the state to approve it,” Powell said. “With their approval, drivers will be able to quote and buy a GEICO Rideshare policy through our Commercial Lines department by calling 855-526-5295 or online at geicorideshare.com.”

Powell continued, “Using a vehicle to transport people for profit is considered commercial usage and therefore requires appropriate coverage.  Our new product provides unambiguous protection without subsidizing the costs of insurance through those with a standard personal auto policy. We are eagerly awaiting the state’s approval of our product, so Floridians are not burdened by potential coverage gaps.”

Uber spokesman Javi Correoso said, “Florida regulations require that ridesharing companies purchase primary insurance coverage and clarifies coverage responsibilities among insurers. We have seen the market for rideshare endorsements to personal auto policies expand in most of the states where similar legislation has been enacted.”

Uber sent emails Tuesday to drivers in eight states outside of Florida saying it will increase its rates by 5 cents per mile in an effort to get drivers to opt in to an injury-protection insurance program, philly.com reported.

The pilot program includes Pennsylvania, Delaware, South Carolina, West Virginia, Illinois, Arizona, Oklahoma, and Massachusetts.

The fare increase is designed to pay for the 3.75 cents per mile cost of insurance for drivers who choose it. Drivers who don’t take the coverage can just pocket the money, but the news organization quoted an Uber spokesman as saying, “We believe drivers should have a low-cost option to protect themselves and their family against rare and unforeseen accidents that prevent them from working.”

For his part, Gov. Scott said, “I’m proud to sign this legislation today to make it easier for ridesharing companies to thrive in Florida and help ensure the safety of our families. Florida is one of the most business-friendly states in the nation because of our efforts to reduce burdensome regulations and encourage innovation and job creation across all industries, including transportation. I look forward to seeing the continued growth of ridesharing companies in our state.”



Insurers reach out to Gov. Scott as AOB fight grows testy

Update Wednesday: Gov. Scott is scheduled to meet at 4:30 p.m. today with Sen. Flores.

Original  post:  Not going so fast: Legislation that insurers and their allies want as state lawmakers round the clubhouse turn on a session that ends in early May.

Picking up: Bristling references to scams and smears and appeals for help to Gov. Rick Scott.

Fun fact: The biggest single contribution to Scott’s Let’s Get to Work committee in 2017 has been $250,000 from Skye Lane Properties, a subsidiary of Heritage Property & Casualty Insurance Co.

Gov. Rick Scott

Insurers say they need legislation to rein in contractors and lawyers who are driving up costs on claims like damage from faulty plumbing or roofs. It starts when consumers sign “assignment of benefits” agreements, giving third parties control of insurance benefits. Then contractors go to court, where their attorneys can pick up big fees under laws designed to protect little-guy consumers. Insurers say the system is being hijacked.

Opposing them: legislators who are sometimes also lawyers. They say insurers could solve the problem by paying fair claims quickly, or simply winning bogus cases in court.

“We are halfway through the 2017 legislative session, and it appears another year may pass without meaningful reforms to end AOB abuse in Florida,” lamented Dulce Suarez-Resnick, an independent insurance agent in Miami and member of the Latin American Association of Insurance Agents. “Make no mistake: If the Legislature fails to address the growing cancer of AOB for a fifth straight year, Florida’s hardworking families are the ones who will lose.”

A coalition supporting the legislation presented petition signatures and called for action last week.

On Thursday, the CEO of state-run Citizens Property Insurance Corp. talked to Gov. Rick Scott about AOB. So did Florida insurance commissioner David Altmaier, who supports reforms insurers want.

“Gov. Scott has continued to meet with industry leaders and consumers on the need to fix the current AOB issue in Florida,” a Scott spokeswoman said. “The call with Commissioner Altmaier and President Gilway this morning was one of the many conversations and meetings he has had with them on AOB over the past few months.”

Scott’s spokesman continued, “Our office will continue to work with the industry to develop a legislative solution that prevents homeowner’s insurance from continuing to rise. As of today, while both the House and the Senate have AOB legislation moving, the proposals are very different.  We encourage the legislature to also work with the industry and consumers to fix the skyrocketing costs on homeowners and close the loopholes which exist in current law that drive-up costs on homeowners due to attorney’s fees for AOB claims.”

It has been a prickly fight. Insurance companies are “smearing” her, said Sen. Anitere Flores, R-Miami,  after her committee last week passed a bill, SB 1218, that they did not like. Sponsored by attorney and state Sen. Gary Farmer, D-Fort Lauderdale,  the bill would license water clean-up contractors for the first time and add some consumer protections, but make no changes to the state’s “one-way” attorney fee rules insurers say are being abused. Instead, insurers would be barred from passing legal fees on to customers when they lose.

As The Palm Beach Post has reported, sorting through claims of a crisis can be tricky. Florida’s largest insurer, Universal Property & Casualty Insurance Co.,  told stock analysts the severity of its AOB claims has been falling for a couple of years and the frequency was “nothing major.” It did this by responding to claims quickly, its CEO said.

Citizens blamed AOB for a $27 million loss in 2016, but it also spent six times that amount, $181 million, on optional offshore reinsurance that did not pay any claims.

Citizens compiled a list of 13 law firms it says are the behind the most serious problems. One of them is Trujillo Vargas Gonzalez Hevia, in which House Appropriations Chairman Carlos Trujillo is a name partner. A reporter asked whether Trujillo was being accused of scamming people,  floridapolitics.com reported.

“I did not say that or infer it, sir,” Gilway said. “What I’m saying, basically, is: There are 13 firms that are driving this, from Citizens’ perspective.”

For his part, Farmer said the state-run insurer could make things better by paying claims quickly: “Citizens is the problem — not AOB, not attorney fees.”

Universal elaborates: Universal Property & Casualty representative Travis Miller reached out to explain more about his company’s AOB situation, as described above. Here is a full statement:

“First, the article might imply to some readers that the frequency of AOB claims is “nothing major.”  However, the rough transcript or summary of the earnings call shows that Mr. Downes was not suggesting the frequency of these claims is nothing major.  Instead, Mr. Downes was asked to compare the fourth quarter of 2016 and early 2017 with the prior year and prior quarters.  In that regard, he was asked whether the company’s experience with AOB claims is stable, getting worse, or improving.  Mr. Downes responded, “We saw a little bit of an uptick in frequency but nothing major.”  In other words, in the fourth quarter of 2016 and early 2017, the company saw an increase in frequency, but that increase was small in relation to prior periods.   As has been widely discussed, the frequency of claims with AOBs has increased significantly in Florida over a number of years.  When making a comparison to prior quarters or the prior year, we must keep in mind that we’re starting from the elevated frequency that already exists.  The frequency of AOB claims in the latter part of 2016 was not meaningfully higher than in earlier quarters or the prior year, but this does not suggest that the frequency of these claims doesn’t remain high or that the frequency doesn’t remain a key contributor to losses.

“Second, while it is accurate to say that the severity of Universal’s AOB claims has been falling for a couple of years, it is important to bear in mind that the average severity of AOB claims remains significantly higher than non-AOB claims.  Mr. Downes mentioned that the average severity peaked at about $21,000 per AOB claim in 2014 before falling to $19,400 in 2015, and more recently to about $19,000 for 2016.  Despite these improvements, the average loss on these claims is still about three times higher than for a typical claim.  Again, Mr. Downes was asked how the company’s recent experience in the fourth quarter of 2016 compared to prior quarters or the prior year.  From this standpoint, while the company has seen a reduction in the average severity of AOB claims, it is important to note that the average severity for these claims remains much higher than for non-AOB claims and much higher than historical averages.

“As you know, insured losses reflect the frequency (i.e., number) of losses times the severity (i.e., amount).  Despite the improvements Mr. Downes mentioned, the AOB claims continue to show both higher frequency and higher severity than other claims, which in turn results in a greater contribution to the overall insured losses.  I would not want your readers to misinterpret the statements below about frequency and severity to suggest that the AOB issue is not having a significant effect on policyholders.”

The Post previously previously addressed this issue in some detail.

Here’s an analyst’s question and the answer from Downes in a transcript:

Q: You talked about this earlier with the reserves, but I guess how did you experience AOB change in 4Q ’16, and I guess even year-to-date 2017 versus the prior year and prior quarters? Would you say, it’s looking stable? Do you think it’s getting worse or you’re potentially seeing some signs of light?

Sean Downes: We saw a little bit uptick in frequency nothing major. But the severity is down, just give you couple of numbers. In 2014, on average HO-3 with AOB connected to it, we had a severity about 21,000. In ’15, it was around 19,400. In ’16 right now, as of this date, it’s not fully cooked, it’s running around 17,590. So, I think once that’s fully cooked, I am sure you are going to be right around that 19,000 number. So, from a severity perspective, I believe that it’s relatively flat. From a peer represented issue, we are seeing a much more aggressive law firms out there right now and taking shots at claims.

So, we have been working on that specifically and trying to battle that situation, I think that’s something that obviously is affecting the industry as a whole, and we’re not immune to that. But I think our ability to get out of these claims quicker with a fast-track team in the day of the claim and the next day is mitigating the potential for plaintiffs law firms, public adjusters, contractors et cetera to intervene to create that separation from us to our insured. So, I think it’s an issue that I think we’re battling as good as we can.


Obamacare explosion? Gov. Scott meets with Florida Blue, Molina CEOs

Days after President Donald Trump said Obamacare will “explode,” top health insurance executives met with Florida Gov. Rick Scott on Tuesday.

Gov. Rick Scott

The pow-wows come as insurers have to make decisions soon about whether to participate in 2018 Affordable Care Act marketplaces serving Florida and other states. A House GOP overhaul, the American Health Care Act, failed last week, but insurers are looking for signals about what happens next.

Scott met at 9:30 a.m. with Molina Healthcare president and CEO Mario Molina in Tallahasseee, and at 12:30 p.m. by phone with Florida Blue CEO Pat Geraghty.

“Dr. Molina met with Gov. Scott today and had a cordial meeting with the primary discussion focused on Medicaid and the Health Insurance Marketplace,” a Molina statement said. “Dr. Molina also asked Gov. Scott how Molina Healthcare can help achieve our shared goals of making health care more affordable for the citizens of Florida.”

The statement also noted, “Although the AHCA is off the table for now, we are currently unable to make an informed decision about whether to participate in 2018 in the individual marketplace without additional clarity on a couple of key issues. If cost sharing reductions are removed or the individual mandate is not enforced, we still expect premiums to increase significantly, which will impact the viability of the marketplace. We are hopeful that Congress and the Administration will take swift action to remove uncertainty for insurers by addressing these two important issues.”

Florida Blue had no immediate comment.

A spokeswomen for the governor’s office said she was checking on a statement.

Both companies have remained committed to the Affordable Act marketplace, even after several competing insurers including Aetna bailed out. In Washington, House GOP members failed to find enough votes for an overhaul of Obamacare last week, and Trump said a “very bad year” lies ahead for people who rely on the health law.

Florida Blue, one of the state’s largest health insurers, confirmed it has been profitable in ACA market plans and had signed up close to 1 million people through the exchange by January.

Mario Molina told Kaiser Health News in early March the Affordable Care Act “doesn’t need to be scrapped and replaced,” Molina said. “It needs a tune-up.”

In recent months, Scott has spoken out forcefully for full repeal, not “tweaking” the current law.

Update: A spokeswoman for Gov. Scott said, “The Governor regularly meets with companies in Florida to discuss issues important to their business. ”

Scott said Friday that politics are “messy” in Washington. “I know Obamacare is spiraling out of control,” he said. “Costs have been going way up.”

Scott said, “I want people to have access to healthcare.” In a letter to Trump’s Health Secretary Tom Price, Scott asked for more “flexibility” in using federal funds such as money provided for Medicaid.

Two things would help reduce the cost of insurance 25 percent to 30 percent, said Andy Slavitt, former administrator for the Centers for Medicare and Medicaid Services from 2015 to 2017 under President Obama. Writing in USA Today, Slavitt said he based the recommendations on a conversation with Mario Molina.

“First, the administration, with support from Congress, should commit to permanently funding payments that reduce the size of deductibles for lower-income Americans (called cost-sharing reductions),” Slavitt said. “Republicans need to drop a lawsuit they filed to stop these payments, or Trump needs to say they are going to continue. Second, the administration should enforce the individual insurance mandate until a different approach can be agreed upon. Those two actions will reduce costs for millions and need to be done now before insurers submit initial premiums for next year, or inaction will drive up premiums. Americans should watch this intently.”


Jeffrey Bragg: Governor’s insurance pick repurposed for Elder Affairs

Gov. Rick Scott (left) and CFO Jeff Atwater (center) did not agree on Jeffrey Bragg for insurance commissioner.
Gov. Rick Scott (left) and CFO Jeff Atwater (center) did not agree on Jeffrey Bragg for insurance commissioner.

Gov. Rick Scott announced Wednesday that Jeffrey Bragg, his former pick for insurance commissioner who faced questions from Cabinet members about a Palm Beach Post story, has been appointed Secretary of the state’s Department of Elder Affairs.

The appointment is effective Sept. 23. Bragg replaces Sam Verghese, who announced  he will be leaving the agency to pursue opportunities in the private sector.

A former state ombudsman  for long term care, Brian Lee,  wondered how well Bragg’s credentials, largely in U.S. flood and terrorism insurance, fit the job at hand.

“It would seem that the millions of seniors who call Florida home are tiring of elected officials who continually make a mockery of the agency that’s supposed to best represent their interests to state leaders,” said Lee, executive director of the advocacy group Families For Better Care.

“Florida can do a better job for seniors,” Lee  said.

Gov. Scott cited Bragg’s more than 40 years of experience in the public and private sectors, and said  he is “a proven leader who is uniquely qualified” for the job.

“His experience as well as his management skills will bring new ideas to the department,” Scott said in a statement. “I am confident he will be a great advocate for the elderly in our state.”

Bragg served as the executive director of the Terrorism Risk Insurance Program at the U.S. Department of Treasury from 2003 until 2014. In addition to private-sector work in insurance, he served from 1981 until 1986 under the Reagan Administration as administrator for the National Flood Insurance Program.

Cabinet members deadlocked on a choice  for insurance commissioner this spring after Bragg faced questions on a Post story about a lawsuit claiming he misled investors in a Florida flood insurance venture. The suit was later settled.

In response to another question, Bragg told Attorney General Pam Bondi he was unfamiliar with navigators, government-paid helpers under the Affordable Care Act. The  Cabinet eventually selected deputy insurance commissioner David Altmaier for the top job.

Life insurance law called ‘monumental win’ as Gov. Scott signs

life insuranceFlorida has become the first state in the nation to impose sweeping requirements for life insurance companies to search death files to make sure families get benefits, state officials said as Gov. Rick Scott signed the bill Tuesday.

Florida insurance commissioner Kevin McCarty called it a “monumental win.”

SB 966 takes effect immediately.

Florida consumers already have recovered $500 million in benefits from a limited number of insurers in multi-state deals, but the bill imposes requirements on all life insurers operating in the state and could result in hundreds of millions of dollars in additional benefits, supporters say.

The legislation was sponsored by Rep. Bill Hager, R-Delray Beach, and Sen. Lizbeth Benacquicsto, R-Fort Myers.

“This consumer friendly bill will ensure that when family members take steps to provide comfort and financial protection by purchasing life insurance, that companies ensure those beneficiaries receive what is due,” Hager said in a statement.

Another $250 million could be paid “in the near future,” Hager said.

Over the years, many life insurance companies have waited to be contacted by a beneficiary, rather than researching whether the policyholder is still living, according to state officials. If the company is never contacted, it never pays, they say.

“This is a monumental win for the state of Florida in addressing an inequitable industry-wide claims practice in the life insurance industry that was uncovered more than five years ago,” McCarty said.

He credited the joint efforts of Chief Financial Officer Jeff Atwater, Attorney General Pam Bondi and his office, among others.

“Today’s new law makes sure all life insurance companies doing business in Florida will abide by the same guidelines in their searches for beneficiaries, meaning more life insurance benefits will be discovered and returned to their rightful owners where they belong,” McCarty said.