FLORIDA LONGSHORE RATES SLASHED:
Following a concerted effort by LIG Marine Managers (www.LIGInsurance.com), the U.S. Department of Labor, the Marine Industries Association of South Florida, the Florida Marine Contractors Association and many others, NCCI announced it would be filing for a reduction in the Florida Longshore surcharge effective July 1, 2004. That filing was made at the end of April and, if approved, will result in the loading being cut from the existing 349 percent to 148 percent. This means the Longshore multiplier will reduce from 4.49 to 2.48 and thus Florida Longshore "Surcharge F" rates which are calculated by use of this load, will drop by approximately 45 percent for new and renewal business with effective dates on or after July 1, 2004. "This is a great step towards an economically feasible rate for many Longshore exposures in Florida and those involved in the process should be congratulated," stated Ian Greenway, president of LIG Marine Mangers. "Suddenly, coverage will become much more affordable for marine contractors and artisan contractors with Longshore exposures and the arguments for those not buying coverage will be greatly diminished, thus presenting some excellent new opportunities."
FLORIDA CFO APPLAUDS LAWMAKERS FOR APPROVING LEGISLATION TO INCREASE AVAILABILITY OF HOMEOWNERS INSURANCE:
Florida Chief Financial Officer Tom Gallagher commended state lawmakers for approving legislation, Senate Bill 2488, that will increase the availability of homeowners insurance through changes to the Florida's Hurricane Catastrophe (Cat) Fund. The Cat Fund was created after Hurricane Andrew to ensure that Florida's insurance companies could quickly pay homeowners claims after a major hurricane and continue to provide coverage. "This legislation will promote needed competition in the marketplace and help thousands of homeowners who are frustrated with the lack of insurance available," said Gallagher, who oversees the state Department of Financial Services. "In fact, several companies have committed that they will write more coverage this hurricane season." The legislation, sponsored by Senator J.D. Alexander and Representative Kim Berfield, will strengthen the Cat Fund by resetting the retention to $4.5 billion and increasing its capacity to $15 billion for the 2004 hurricane season. The Cat Fund currently provides $11 billion of capacity, or reinsurance, to the insurance industry. Access to private reinsurance has been limited in recent years. As a result, many insurance companies have reportedly stopped writing coverage or reduced their exposure by non-renewing policies. The lack of reinsurance available through the private market, coupled with the inability of the Cat Fund to grow with the market, has reportedly resulted in a number of consumers being forced into the Citizens Property Insurance Corporation, the state's insurer of last resort for homeowners who can't get coverage from the private market. "This legislation will encourage the private market to write more coverage and reduce the state's role in providing insurance," said Sen. Alexander. "Those who live here and move here deserve access to a viable and competitive insurance market," said Rep. Berfield. "This legislation gives homeowners a fighting chance to get coverage." The bill headed to the Governor for signature.
FPIC INSURANCE GROUP UNVEILS Q1 REPORT:
Florida-based FPIC Insurance Group Inc. reported that its net income increased to $7.0 million, or $0.68 per diluted share, for the first quarter 2004, up from net income of $2.8 million, or $0.29 per diluted share, for the first quarter 2003. Operating earnings increased to $5.3 million, or $0.51 per diluted share, for the first quarter 2004, up from operating earnings of $2.6 million, or $0.28 per diluted share, for the first quarter 2003. "Earnings momentum has continued in the first quarter of 2004 with actual results exceeding market expectations," stated John Byers, president and CEO. "We attribute our strong financial performance over the past nine quarters to our conviction in the main tenets of our business strategy. Our focus on disciplined pricing and underwriting, controlling loss costs through strong claims management and providing outstanding service to our clients has contributed to our success in generating and sustaining profitability. While our insurance segment continues to grow in its core market, our non-insurance segments have consistently contributed positive cash flow to the holding company, and, in the case of our reciprocal management segment, consistent earnings to our organization."
FORT LAUDERDALE CLAIMS ASSOCIATION HOLDS JULY SEMINAR:
The Fort Lauderdale (Fla.) Claims Association will be conducting an all-day seminar on Wednesday, July 21, at the Fort Lauderdale Marriott North, 6650 North Andrews Avenue. The event will be held from 8 a.m. to 5 p.m. Members are free to attend and non-member participation is $55. CEU's for Adjusters, RN, CCM, CDMS, CRRN, CRC. For more information, contact Mary Ann at (800) 685-4789, ext. 1140 or Sherrie at (561) 309-2982.
FLORIDA SURPLUS LINES CONVENTION TAKES A CRUISE:
The Florida Surplus Lines Association will hit the waves at its 44th Annual Convention, July 29 - Aug. 2, 2004. For the first time, the convention will take place on a four-night cruise out of Ft. Lauderdale, Fla. To date 165 people have signed up for the cruise, and there are only a few cabins left reserved for the convention. Guest speakers will be Gary Pullen, executive director Florida Surplus Lines Service Office, Douglas Mang, (general counsel), Mang Law Firm, P.A., Tom Kuzma, president, Nautilus Insurance Co., Pat Roberts, president General Star, and Jim Carey, president, Admiral Insurance Co. For additional information visit the FSLA Web site, or contact Roger Gobler at rtgobler@juno.com.
TENNESSEE SENATORS NOTE $10.9 MILLION IN HUD DISASTER ASSISTANCE ON TORNADO ANNIVERSARY:
U.S. Senators Bill Frist (R-Tenn.) and Lamar Alexander (R-Tenn.) recently announced that the City of Jackson will receive $10.9 million from the Department of Housing and Urban Development to help rebuild public housing units that were destroyed by the tornado that hit Jackson on May 4, 2003. Frist and Alexander made the announcement by phone with Mayor Charles Farmer during the city's commemorative dinner marking the anniversary of last year's devastating storms. "This funding will ensure that Mayor Farmer and the Jackson community can continue rebuilding from the tornadoes just one year ago," said Frist. "It's been a difficult road, but one that area residents have handled with tremendous spirit and unity. My thanks also go out to HUD Secretary Alphonso Jackson for doing his best to provide the support the City of Jackson needs to continue the work ahead." Alexander noted, "Mayor Farmer and his staff along with the residents of Jackson have worked tirelessly in the past year to get the city back on its feet. Not long ago, I talked to HUD Secretary Alphonso Jackson about the community's hard work and the need for this assistance. Senator Frist and I appreciate that he has acted quickly and done all he can to make this happen for the people of Jackson." The funding will be used to repair and replace public housing units that were destroyed in the Merry Lane Courts and Parkview Courts public housing developments as a result of the tornado. The funds will be made available from the Department of Housing and Urban Development's Reserve for Emergencies and Natural Disasters.
PIAA, NPDB DATA SHOW MED-MAL COSTS STILL RISING:
Data compiled from the physician owned and/or operated medical liability insurers that make up the Physician Insurers Association of America (PIAA) and the National Practitioner Data Bank (NPDB) indicate that medical malpractice claim payments have been drastically rising and are continuing to do so. As a result the organization said "a significant percentage of doctors are considering early retirement, reduction of services, or relocation to survive the current litigation crisis." It also noted that "access to quality health care will be harder to come by as increasing medical liability insurance costs continue to siphon resources from the health care system and its patients." According to PIAA President Larry Smarr, "The malpractice litigation system is in a state of crisis. When you have a system in which half of all available money to pay victims of malpractice goes to legal costs and fees, something is definitely wrong." The survey found that "from 1999 to 2003, the Data Bank shows that total payments to plaintiffs has shot up over 30 percent - $3.69 billion in 1999 to $4.9 billion in 2003. At the same time, the number of claims submitted to the NPDB has remained relatively flat. Total payments for 2003 rose 8 percent from the previous year. "PIAA data indicate that the average payment by doctors has jumped 40 percent between 1998 and 2002 - $232,156 in 1998 to $323,975 in 2002. Data Sharing research also shows that payments over $1 million have doubled in the past four years of collected data, and legal expense costs have risen almost 30 percent in the past five years." Smarr added, "Stability in the marketplace is best illustrated by the ability of companies to underwrite doctors, not temporary fluctuations in claim severity or frequency. National trends show a definite increase in claim costs, while simultaneously showing fewer insurers willing to risk insolvency in unstable markets."
WEST VIRGINIA GOV. NOTES PHYSICIAN'S MUTUAL FILES APPLICATION FOR LICENSURE WITH COMMISSION:
West Virginia Gov. Bob Wise announced that the Physician's Mutual Insurance Company filed its application for licensure with the Insurance Commission. "Last year, this administration asked the Legislature to enact sweeping reforms to address the medical malpractice crisis," Wise said. "The Legislature responded with a package that included transforming the BRIM H.B. 601 Physician's program to a West Virginia doctor-owned company. "Today, the reality of a West Virginia doctor-owned company is one step closer. West Virginia physicians are better suited to manage this line of business than out-of-state insurance companies who may only be interested in a quick dollar." There will be more than 1,450 physicians moving from BRIM to the new company once the application is approved. The state will reportedly not be at risk for claims against the Physician's Mutual. Under the provisions of H.B. 2122, $24 million from tobacco settlement funds and assessments on physicians and insurers will provide the initial capital of $31 million for the company. "I am extremely gratified to reach this milestone in the creation of West Virginia's first Physician's Mutual Insurance Company, a movement that began three years ago with the passage of H.B. 601," said Dr. Robert Ghiz, chair of the Physician's Mutual Insurance Company. It is the culmination of a monumental effort by many organizations and individuals, including Gov. Bob Wise, members of the Legislature, physicians across the state and the mutual board of directors. The target date for the beginning of the new program is July 1, 2004. After that date, BRIM will no longer be permitted to issue renewals or new policies to doctors. The new company must accept all liabilities of the H.B. 601 program that were physician related. Those joining the new program will not be required to purchase tail insurance because of the transfer.
