The American Medical Association responded to the proposed “Regulation for Uniform Definitions and Standardized Rebate Calculation Methodology for Plan Years 2011, 2012 and 2013 Per Section 2718 (b) of the Public Health Service Act” issued by the National Association of Insurance Commissioners last week.  The AMA response was supportive of the NAIC goal to further transparency in the health insurance and medical loss ratio areas.  The AMA states,

            “We support the medical loss ratio draft regulation adopted by the B Committee on October 14, 2010. We urge you to not change this adopted version, which reflects significant compromise and process. Moreover, we oppose amendments supporting national aggregation, inclusion of broker and agent fees in the loss ratio and increasing the confidence interval to 80 percent.” (http://www.naic.org/documents/committees_b_mlr_reg_101014_combined_comments.pdf)

            Further, the AMA has concerns specifically about three issues.  First, the AMA opposes increasing the confidence interval from 50 to 80 percent.  The AMA believes that the increase will actually reduce the incentive for insurers to price below the 80 percent level.  Retaining the 50 percent level would help insurers strive towards a higher efficiency, promoting a system of more fair and consistent pricing.

            Next, the AMA emphasized the importance of retaining a state level aggregation.  The AMA believes that program functioning at the state level is functioning well and will be interrupted if a national aggregation program is put into effect.  Companies that are currently national are already employing strategies to maintain their state level aggregation, and will be interrupted if they need to change over to a national aggregation.  Additionally, consumers will face delays in receiving rebates if the national aggregation program is adopted.

            The final point made by the AMA is their opposition to excluding broker fees and commissions from the earned premium calculation.  Current law does not allow for inclusion of the fees.  The AMA feels that the consumers will be the ones to absorb the costs of fees and commissions which could be added to the premium costs.  The AMA believes that these premium increases would be significant for consumers.

Florida is being heaped with praise this week for its superior attention to insurance regulation.  The National Association of Insurance Commissioner President Jane Cline presented the Esprit de Corps Award to Florida Insurance Commissioner Kevin McCarty stating, “The Florida Office of Insurance Regulation continues to distinguish itself in the U.S. and abroad; Commissioner McCarty and his staff have been at the forefront of international insurance supervision and it is my pleasure to honor them here today.”  Te award was established in 2006 in recognition of outstanding service to the NAIC by an insurance department.  Esprit de Corps means “a common spirit of comradeship, enthusiasm and devotion to a cause among the members of a group.”

Another distinguished honor goes to Commissioner Kevin McCarty who was announced to be the NAIC President-Elect for 2011.  The Ohio Director of Insurance, Mary Jo Hudson, originally nominated Commissioner McCarty who served as Vice President of the NAIC during 2010.  Assuming all continues as planned, Commissioner McCarty will ascend to the presidential position on January 1, 2012.  The new officer lineup beginning on January 1 2011 includes: Susan Voss (Iowa Commissioner), Kim Holland as Vice President (Oklahoma Commissioner), and James Donelon as Secretary-Treasurer (Louisiana Commissioner).

Gold Coast would like to congratulate Commissioner McCarty for his outstanding achievement in Florida, and anticipates positive outcomes nationally from his increased influence!

          The medical malpractice insurance market in Florida is strong and stable according to Commissioner Kevin McCarty.  McCarty states, “Florida’s marketplace remains competitive relative to other large states, which is encouraging news for doctors and hospitals.”  The statement reflects information regarding the medical malpractice insurance industry based on the 2010 annual report released by the Florida Office of Insurance Regulation earlier this month.

            2009 brought the addition or expansion of ten medical professional liability insurance carriers, which proved to be good news for medical practitioners.  Two carriers who had been providing medical malpractice insurances discontinued writing those policies, for a net gain of eight companies writing malpractice policies.  According to the report, on average for those filing a change, rates for malpractice insurance dropped by 8.2% for physicians and surgeons and 10.8% for approved medical professional liability.

            Not all groups of practitioners decreased, however.  Chiropractors, optometrists, and podiatrists saw increases of up to 0.5% while dentists and professional nurses remained steady after large hikes in 2008.

When compared to other large states the report finds:

• Florida is the fifth largest market as measured by direct premium written,
• Florida ranks sixth among the ten most populous states when measured by losses incurred to earned premium (31.7%).           

Additionally,  for the 22 firms comprising 80% of the market:

• Medical Malpractice is not generally the only line of business written,
• Florida is generally one of their top five markets,
• Their loss and expense ratios in Florida, while varied across companies, are in line with what they experienced in their other major markets,
• The premium weighted effective average return on surplus was 6.6% in 2009, down from 9.5% in 2008, from 11.0% in 2007 and from 19.7% in 2006,
• Solvency risk, as measured several ways, does not appear to be a critical issue with these sample firms, and these firms have shown favorable reserve development in 2009 for the fourth year in a row, reversing a previous trend of adverse reserve development.

For more information regarding the report, visit:

http://www.floir.com/pdf/MedicalMalReport10012010.pdf

Florida is experiencing a delay in foreclosure sales, throwing off the entire mortgage and real estate market.  Attorney General Bill McCollum has joined other states in investigating fraudulent foreclosure practices.  The Attorney General sent letters to major mortgagers requesting meetings to conference about re-establishing the integrity of the foreclosure process.

In the letters, addressed to Bank of America, JP Morgan Chase, GMAC, PNC Financial Group and Litton Loan Servicing, McCollum states that he is distressed to learn that these companies may have been involved in filing faulty affidavits in Florida courts regarding the knowledge of ownership and promissory notes in foreclosure cases by the affiant.  These actions have led to refusals by title companies to write title insurance for questionable titles, leading to delays and disturbances in not just these specific cases, but the entire Florida economy.  The Attorney General additionally expresses disapproval of the mortgage moratoria and litigation, stating that it, too will compound the economic hardship of the state.

Attorney General McCollum goes on to request a meeting with key players in order to try to find a way to solve the problems that is creating a “linchpin” in the Florida real estate and mortgage market.

It is clear that the oversight caused by the lax attention to the details necessary in transacting real estate are unforgivable, and require serious attention.  Pressures to process and review original documentation can become overwhelming during months when representatives of these companies are processing 8,000 to 10,000 affidavits a month.  However, the protocols are in place for a reason, and the backlog that has been caused by bypassing necessary steps will not be easily overcome.  To view a copy of the letter from Attorney General McCollum please visit:

http://myfloridalegal.com/webfiles.nsf/WF/MRAY-8A6JS8/$file/LittonLetter.pdf

On September 30th, President Obama signed a bill extending the National Flood Insurance Program for another year. Real estate, insurance, and adjuster organizations have been lobbying for the extension since the program lapsed earlier this year. The efforts of interested organizations did not go unrecognized as the September 30th deadline approached. The National Flood Insurance Program (NFIP), managed by the Flood Insurance and Mitigation Administration (FIMA), a subsidiary of the Federal Emergency Management Agency (FEMA), was approved first in the Senate on September 21st, then in Congress on September 23rd, before reaching the President’s desk for the September 30th signature.

The NFIP has three components including Flood Insurance, Floodplain Management, and Flood Hazard Mapping, as described in an earlier blog. 20,000 communities rely on and participate in NFIP through careful consideration to floodplain management. Floodplain management leads to a reduction of approximately a billion dollars worth of damage annually. Building codes aimed toward meeting NFIP standards lead to a reduction in 80% of flood damage.

The NFIP has gone through a series of short term extensions leading to industry confusion regarding flood insurance. The current year long extension alleviates some of that confusion by bringing some certainty to the longevity of the program. The extension also gives lobbyists a heartier platform on which to stand while looking at more comprehensive reform measures to ensure that the NFIP has a sound financial footing for five years or more. For more information on the National Flood Insurance Program please visit:

Floodsmart.gov

Florida has joined the states questioning the Constitutionality of the ObamaCare Insurance Mandate.  Last week, the Florida Supreme Court debated whether Proposition C should be restored.  Proposition C is a ballot measure that would prohibit the government from penalizing people who do not carry health insurance, requiring them to get insured.

The referendum was approved by the Florida legislature as a ballot issue in April.  In July, however, it was removed from the ballot by a lower court due to concerns that it was misleading and could confuse voters.  Assuming it is restored to the ballot, a majority of 60% of Florida voters will need to approve Proposition C in order to block the Federal Insurance Mandate.

One goal of the federal mandate is to keep insurance premium rates down by requiring healthy people to carry health insurance, offsetting the provisions prohibiting insurers from denying coverage to people in high risk categories or those with preexisting conditions.   However there are a growing number of states that are contending that the regulation is unconstitutional and a dozen states have already filed Federal lawsuits.

Several state legislatures including Arizona, Georgia, Idaho, Louisiana, and Virginia have already passed statutes countermanding the mandate.  Florida may be joining the ranks of Arizona and Oklahoma in making the mandate a ballot issue for November.  In the mean time, the State and Federal Courts will continue to debate whether health insurance coverage is an issue that should be determined by the government, or by the individual

Many Florida professionals including Real Estate agents & brokers, Community Association Managers, Insurance agents, and Appraisers have mandatory continuing education requirements to complete within the next few days or weeks.

Gold Coast makes it convenient to complete your required continuing education courses and maintain your professional licenses. The following is a list of some important deadlines that are coming up very soon. You worked hard to get your license, don’t procrastinate and put your license in jeopardy. Complete your required continuing education today!

Mortgage Brokers: The entire licensing system for Mortgage Brokers is changing on October 1, 2010, when new federal requirements go into effect. All existing Mortgage Brokers will have to apply for the new Mortgage Loan Originator license through the NMLS beginning on October 1. Although you may have a license that has an August, 2011 expiration date, it will expire on December 31, 2010 unless you take the required steps to reapply and obtain the new MLO license. Get a head start and begin preparing for the new NMLS National Exam. Gold Coast is offering exam prep programs for this challenging exam at all of our locations. Check out NMLS National Exam Prep Course for more information. We are also offering an exam prep course for the new Florida law exam.

If you’re not sure what you need to take, watch this short video.

For more information please read the story entitled Big Changes Coming For Florida Mortgage Brokers that is posted here on our blog.

Real Estate Sales Associates & Brokers: September 30th will be here before you know it. Approximately 25 percent of Florida real estate professionals renew this September. If it is your first renewal you must complete 45 hours Post License for Sales Associates, or 60 hours Post License for Real Estate Brokers. Failure to complete the mandatory Post License Education by your first license renewal will result in the loss of your license. If it is your second or subsequent renewal you must complete 14 hours of Continuing Education. More Real Estate Information. You may check your renewal requirements by logging into www.myfloridalicense.com.

Community Association Managers: Licensed Florida CAMs must complete 20 hours of CE by September 30, 2010. You will not be able to renew your license if you have not completed the CE requirements. We offer a full spectrum of CE courses both in class and by correspondence. Get More CAM Information.

Appraisers: Certified Appraisers must complete 30 hours of CE by November 30, 2010. Registered Trainee Appraisers have to complete required Post License education by their second renewal. If you became a Registered Trainee appraiser any time between December 1, 2006 and November 30, 2008, your second renewal period will end on November 30, 2010. If you wish to remain a Registered Trainee you must complete the mandatory Post License education prior to November 30, 2010. Get More Appraiser Information.

Insurance Agents: Many agents have compliance periods ending this summer. You can check your CE status at http://www.fldfs.com/agents. All Gold Coast class schedules and online class information can be found on the Gold Coast Schools website. We are also now offering the Surplus Lines course.

Our Career Counselors are available to assist you with any of your questions. Please call 1-800-732-9140 if you have any questions. Or visit our website at www.goldcoastschools.com to register for a course.

One of the provisions of the Patient Protection and Affordable Care Act (PPACA) will be implemented with the aid of the Medical Loss Ratio (MLR) Blanks now provided by the National Association of Insurance Commissioners (NAIC).  The final implementation of the MLR Blanks Proposal was approved by the NAIC Executive Committee/Plenary on August 17^th.   (Blanks are the financial information forms required from insurers by state regulators.)

MLRs, under the health care reform act, stipulate that among large group policy holders, for every dollar of premium payment, 85 cents be spent on medical costs.  For small group and individual policy holders, 80 cents of every premium dollar must be spent on medical costs.   These reforms leave 15-20 cents of every premium dollar to administrative fees such as payroll, advertising, overhead, and profits.  Should an insurer not meet the minimum MLR, a premium reimbursement may be required to policy holders.

After months of consideration by the Health Reform Solvency Impact Subgroup of the NAIC Executive Committee, the Blanks Proposal was finally adopted.  The Subgroup considered issues relating to classification of resources that may not be considered direct medical care such as nurse hotlines and behavioral health resources.

The Subgroup states,” The purpose of this supplemental exhibit is to assist state and federal regulators in identifying and defining elements that make up the medical loss ratio as described in Section 2718(b) of the Public Health Service Act (PHSA) and for purposes of submitting a report to the Secretary required by Section 2718(a) of the PHSA. The supplemental exhibit is also intended to track and compare financial results of healthcare business as reported in the annual financial statements”.  The Blanks can be found for review at http://www.naic.org/documents/index_health_reform_mlr_blanks_proposal.pdf.

The Florida Office of Insurance Regulation is focusing on keeping the State of Florida free from unauthorized companies.  On August 5^th, the FLOIR issued an Order to Auto repair Warranty Inc., Auto Repair Group LLC, and a Michael R. Petruziello to Cease and Desist selling unauthorized motor vehicle service agreements in Florida.  Insurance Commissioner Kevin McCarty stated, “Companies selling insurance products of any kind must adhere to Florida’s stringent licensing process.  Floridians should always verify the products they purchase are being offered by companies licensed in our state.”  Warranty products fall under the insurance product category, and therefore require a Florida Insurance license to sell.

Earlier in the week, the Florida Department of Financial Services (DFS) and the Office of Insurance Regulation issued a warning to Floridians regarding the solicitation of unauthorized health insurance plans sold by the Association of Independent Managers (AIM).  DFS CFO Alex Sink issued a statement saying, “Bogus health insurance scams rob consumers of their hard-earned money and also leave them uncovered in the event that medical care is needed.”  McCarty responded, “This type of illegal and unethical activity will not be tolerated as Floridians must rely on health insurance to pay their claims during these vulnerable economic times.”  The activity also damages the productivity of legitimate agencies working hard to meet the regulatory requirements for insurance education and licensing.  By staying vigilant, the FLOIR and Florida DFS are trying to keep Florida scam free and a viable marketplace for insurers and their clients.

Kevin McCarty, the Insurance Commissioner with the Florida Office of Insurance Regulation (OIR) addressed the United States Senate Special Committee on Aging on July 21^st.  He covered a variety of topics with respect to the regulation of continuing care retirement communities (CCRCs).  The OIR and the Florida Agency for Health Care Administration (AHCA) regulate CCRCs jointly, with the AHCA regulating health care quality and the OIR regulating financial solvency, residency contracts, and disclosures to prospective residents.  Additionally, the Florida Department of Financial Services oversees mediation and arbitration between residents and CCRCs.

After a brief history of Florida CCRCs and resident rights, the Insurance Commissioner gave an overview of the regulatory structure which focuses on four distinct areas:

1) Verifying that CCRC owners and management are reputable and responsible

2) Ensuring information is properly disclosed to prospective and current residents

3) Ensuring compliance with licensure requirements

4) Providing financial oversight

McCarty touched on the various components of each of the distinct areas and how the OIR is involved in community outreach programs to stay informed regarding regulatory problems and concerns about CCRCs.  In addition to discussions with Advisory Council executive directors, the OIR conducts on-site examinations, meeting with the head of the facility resident’s councils to discuss any issues pertaining to the CCRC.  A variety of state associations representing Florida CCRCs and their residents also have input into the regulatory process.

McCarty discussed trends in CCRCs evolving to meet the changing needs of seniors.  He talked about the increases in the quantity and quality of the services meeting both the wants of seniors, and the needs of CCRC’s finances.  Several Florida CCRCs have opened up extended services including home health care.  These “CCRC’s at home” allow the aging to remain in their own places of comfort for longer periods.  At the same time, the seniors are transitioning to the home health care providers who will continue to serve them potentially for the rest of their lives.  McCarty concluded with statements regarding the success of CCRCs in Florida.  Although there are concerns regarding the impact of the economy of the financial stability of CCRCs, it has been 20 years since a CCRC has failed in Florida.  The ability of the CCRCs to grow and adapt with the needs of the aging community, and the obvious success of these communities, is a testament to OIR’s ability to regulate the industry.