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July 15, 2019 • Vol. 97 No. 14

Contents

News & Markets

News & Markets

News & Markets

Florida Gets Ready for Peak Hurricane Season After Three Years of Major Storms

Addressing Florida’s Rising Tide of Flood Exposures

Challenges Facing the Florida Insurance Market: A Reinsurer’s Perspective

4

Departments 6 People

2 | INSURANCE JOURNAL | FLORIDA JULY 15, 2019

10

12

14 Florida Fraud Roundup

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News & Markets

F

loridians are on alert as the state heads into to peak hurricane season after three straight years of being impacted by major storms. Meanwhile, the Florida Panhandle continues its recovery from Hurricane Michael that devastated the region as a Category 5 last October. Residents in the area are crossing their fingers that they will be spared this year as they continue rebuilding from the largest hurricane to hit the area on record. “We are all hoping there won’t be another one this year,” said Karen Kirkland, owner of Kirkland Insurance Agency in Lynn Haven, Fla., a part of the Panhandle that was badly damaged by the massive storm that made landfall October 10 with 155-mph winds. According to the Florida Office of Insurance Regulation, total estimated insured losses from Hurricane Michael had reached $6.6 billion as of June 28, 2019, with 84% of claims closed. The total number of claims between residential, commercial, flood and other lines was 4 | INSURANCE JOURNAL | FLORIDA JULY 15, 2019

nearly 148,000 — 88,692 of which came from Bay County. Trey Hutt, owner of Hutt Insurance Agency in Panama City, Fla., said there were 1,900 claims from his agency’s 6,000 policyholders, equating to 8.5 years’ worth of normal claims activity from one storm. This year, his customers are much more willing to review their insurance coverage. “No one is coming to tell me they had too much insurance for [Hurricane Michael],” he said. “People are reevaluating business income, building limits and the fine print of endorsements.” Kirkland said most of her customers have responded to her yearly invitation to sit down with her and review their insurance policies and are increasing their coverage, adding coverage for other structures and dwelling coverage. “People want to come in and actually talk,” she said. “I believe the insurance world has changed since [Hurricane Michael] because everyone is more aware of the benefits and certain coverages.” Panhandle residents weren’t the only

ones caught off guard by the intensity of Hurricane Michael. Meteorologists who tracked the storm were also surprised by how quickly the hurricane intensified, said Daniel Betten, principal scientist for CoreLogic. One week out nobody believed it would be a major hurricane. One big lesson from Michael that those in hurricane-prone states should realize, he said, is not to count on having more than a couple days’ notice for a major hurricane to make landfall. “Sometimes people get lulled into a false sense of security by hearing about a storm a week in advance,” he said. “Michael and Harvey are examples of storms that were very disorganized just a week before and then within one to two days intensified into major hurricanes.” State officials and regulators are urging citizens and the insurance industry to be prepared. Florida CFO Jimmy Patronis launched an initiative in June designed to encourage Floridians to prepare before a hurricane

continued on page 8 INSURANCEJOURNAL.COM


© Prepared Insurance Company 2019

NEW BEGINNINGS

Prepared protects everything that makes your house your home. All the cherished memories within its walls, and the new memories yet to be made. New beginnings represent milestones in the journey of life. From the moment you move into your new house, we’re there to protect what matters most to you. For the past 10 years, we’ve been providing insurance coverage for homeowners throughout Florida. We’ve shared many milestones, and we’ll continue to be here for all your future milestone moments.

When you’re ready, we’re Prepared.

Homeowners | Condo | Renters | Dwelling Fire | Flood

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People Florida

Gulfstream Property and Casualty Insurance Co. has appointed Ronald E. “Nate” Natherson, Jr. as president and CEO. Natherson joins Gulfstream having previously served as chief oper- Nate Natherson, Jr. ating officer for Southern Oak Insurance Co. in Ponte Vedra Beach, Fla. He has more than two decades of experience with operations management, corporate strategy, claims and catastrophe management, sales and marketing, media relations, governmental affairs and corporate communications. Founded in 2004, Gulfstream, a Sarasota, Fla.based insurance company, provides homeowners’ insurance and related services to customers in Alabama, Florida, Louisiana, South Carolina and Texas. Willis Towers Watson made a series of personnel appointments across its Corporate Risk and Broking (CRB) operations in Florida. CRB has focused on delivering innovative products to clients with an emphasis on the real estate, construction, health care and financial institution sectors. The appointments are as follows: Lauren Vidal was appointed Florida’s CRB health care practice leader. Vidal will be responsible for creating and executing overall strategy to grow the company’s presence in the health care space across Florida. Vidal is based

in Miami. Tracy Johnson, account executive, based in Lake Mary, will oversee client relationships and service delivery, and serve as a leader on a variety of large and complex accounts in the healthcare industry. Johnson formerly worked at Marsh where she served as an account executive. Sean Gabay, based in Miami, will lead the condominium practice and oversee business development for real estate, hospitality and complex casualty risks. Gabay joined the company from Hays Companies where he served as vice president in their condominium and real estate division. Nancy Musial, associate director, based in Fort Lauderdale, will lead the condominium practice service team, overseeing client relationships. Musial joined the company from Hays Companies where she served as vice president in the condominium and real estate division. Alec Alfonso, senior associate, based in Miami, will be responsible for developing new business and expanding existing relationships throughout Florida and the U.S. Prior to joining Willis Towers Watson, Alfonso served as a commercial risk advisor with Baldwin Krystyn Sherman Partners. Chad Jones, senior associate, based in Lake Mary, will be responsible for developing new business and expanding existing relationships throughout Florida and the U.S. Prior to his role with Willis Towers Watson, Jones served as a risk advi-

6 | INSURANCE JOURNAL | FLORIDA JULY 15, 2019

sor for Marsh & McLennan Companies. Derek Wheeler, senior associate, based in Jacksonville, will be responsible for new business and expanding existing relationships throughout Florida and the U.S. Wheeler joined the company from Sentry Insurance where he served as territory account manager. Marcela Montoya, client manager, based in Miami, will provide client service to the company’s construction and real estate clients. Prior to her role with Willis Towers Watson, Montoya served as a risk analyst for Turnberry Associates. The company said the appointments underscore its commitment to cementing its risk advisory and broking business in Florida and will help with its continued expansion in the state. Jennifer Szalkay has rejoined Appalachian Underwriters’ Brokerage division in Sarasota, Fla. Now a senior broker, she will be working on specialty casualty and construction accounts in all 50 states. Szalkay has more than 10 years of experience in the insurance industry, formerly working as underwriting manager and senior vice president with a couple of insurance wholesale competitors. She has also worked in the retail agency side of the business. Appalachian Underwriters, Inc. is a full-service MGA and wholesale insurance brokerage, providing independent agents national access to multiple specialized markets for workers’ compensation,

commercial specialty and personal lines of insurance. Tampa, Florida- based

American Integrity Insurance

has appointed Executive Vice President Jon Ritchie as chief operating officer. He will continue to report to Bob Ritchie, president and CEO. In this role, Jon Ritchie will work closely with the CEO and board of directors on the company’s overall strategy and execution. As COO, Jon Ritchie will provide Jon Ritchie leadership to ensure the company has the proper operational controls, administrative and reporting procedures, and people in place to ensure financial strength and operating efficiency. He began his tenure with the firm more than 10 years ago and has worked in numerous departments within the company.  American Integrity provides Floridians with comprehensive insurance coverage, offering traditional and high valued homeowners insurance, condo insurance, and renters insurance. American Integrity also offers flood insurance, umbrella insurance, golf cart insurance, boat insurance, cyber coverage and identity theft protection, as well as equipment breakdown coverage. American Integrity Insurance has in excess of 285,000 customers and is represented by more than 1,000 independent agents. INSURANCEJOURNAL.COM


Your Peace of Mind is Our Priority ®

We Protect the American Dream Homeownership is the American Dream.St.Johns customers are homeowners, who have worked hard to realize their dreams. Our customers entrust us to insure what is dearest to them; their homes, their families and their futures. We believe every St. Johns customer deserves the peace of mind that comes with achieving the American Dream. St. Johns Insurance Company offers homeowners insurance in the states of Florida and South Carolina.

Westwood Center Three 6675 Westwood Boulevard • Suite 360 Orlando, Florida 32821 Phone: 866.304.7779 • Fax: 866.216.7749 www.stjohnsinsurance.com


News & Markets continued from page 4

makes landfall called “Prepare Florida.” “While Floridians know all too well the devastation hurricanes can have on their lives, it’s easy to not take the threat seriously,” Patronis said. “An active [2019] hurricane season is predicted, with the possibility of up to four major hurricanes. As we saw with Hurricane Michael, hurricanes can form and strengthen quickly, leaving little time to prepare and evacuate.” The PrepareFl.com website offers disaster preparedness information and resources for residents to get ready for the next storm, including an emergency preparedness toolkit, guide to inform consumers on insurance and financial preparation in the event of a natural disaster, and a guide to navigating the flood insurance claims process, among other information. OIR said Hurricanes Hermine, Matthew, Irma and Michael impacted Florida “in their own unique way” and each storm over the past three years has given the state an opportunity to identify strengths in response efforts but also areas that could be improved. “As a result, Florida’s ability to respond to these types of events continues to grow and strengthen and we expect the response from the industry to be strong should we experience a tropical weather

event this season,” OIR said in an e-mail to Insurance Journal. For their part, carriers operating in Florida say they are ready for whatever Mother Nature brings to the Sunshine State this year.

Michael and Harvey are examples of storms that were very disorganized just a week before and then within one to two days intensified into major hurricanes. Capitol Preferred Insurance and Southern Fidelity Insurance, both headquartered in Tallahassee and owned by Jimmy Graganella, said a “Storm Center” page has been added to its company websites featuring preparation articles and a way for customers to file claims 24/7. Capitol Preferred, which has 70,000 policies in Florida, South Carolina and Louisiana, begins preparing for hurricane season in January of each year and has two call centers and more than 70 desk adjusters ready to respond to claims. National carrier Chubb said it provides agents and brokers with risk management tips and loss prevention measures that can be shared with their clients to help before,

during and after a storm to minimize loss from wind or floods. Chubb clients have access to a client portal and app where they can opt-in for alerts that will signal severe weather and receive tips and guidance to minimize property damage, among other resources. Chubb homeowner clients with secondary homes in many states, including Florida, also have access to Chubb Property Manager where Chubb risk consultants will visit their property and conduct an exterior inspection to determine the home’s condition after a hurricane. Kirkland and Hutt Insurance Agency owner Trey Hutt say they were mostly pleased with their carrier responses after Hurricane Michael, though there were some hiccups. Kirkland said the many differences in policy language among admitted carriers was challenging, and she will no longer work with companies that don’t cover wind-driven rain or fences. Hutt said overall, his carriers “behaved really well” but there were a few that didn’t, either with underprepared or poorly trained staff, or long delays in responding to customers. He plans to cut ties with at least one or two companies. “Our frustration in general was it was pretty clear early on what [the carrier] responsibility was, and for the most part they paid what they owed, but they could

2019 Hurricane Season Forecast

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he National Ocean and Atmospheric Administration has predicted a “near normal” hurricane season this year with nine to 15 named storms forecast. They predicted four to eight of those storms will become hurricanes and two to four of those will be major systems with winds of 111 mph or more. Though this year’s hurricane season, which started June 1 and runs to Nov. 30, is not expected to be above average, CoreLogic’s Daniel Betten said it’s important people understand that there is a lot of uncertainty with hurricane forecasts. “Last year [NOAA] called for five to nine hurricanes, which is about average, but we 8 | INSURANCE JOURNAL | FLORIDA JULY 15, 2019

saw eight actually named hurricanes … so it was an above average year overall last year for named storms and on the upper end of NOAA’s forecast,” he said. “It definitely exceeded expectations.” Betten said there was a moderate El Nino event this year and that is expected to weaken slightly over the fall which contributes to the slightly below season expected this year compared to last. However, sea surface temperatures in the Caribbean and the tropical Atlantic are above average. “So, if a storm does form, if you have the right environment conditions above the water surface then the ocean is primed

to help intensify the hurricanes,” he said. There is also slightly above average activity expected from the West Africa Monsoons where a lot of hurricanes start. Betten said the east coast of Florida is one of the most vulnerable areas of Florida, and the U.S., to storm surge because of hurricane’s coming off the Atlantic. CoreLogic’s 2019 Storm Surge Report says more than 2.9 million homes in the state are vulnerable to storm surge flooding. “That’s one of the things that made Michael so surprising is that that part of the Panhandle is actually not known for having strong hurricanes,” he said. INSURANCEJOURNAL.COM


Debris scatters an area in the aftermath of Hurricane Michael in Mexico Beach, Fla., Thursday, Oct. 11, 2018. (AP Photo/Gerald Herbert)

have done it more quickly and with much less distress for clients,” Hutt said. Kirkland said she would appreciate carriers giving agents better claims access so they can provide the customer more information during the claims process. As it is now, carriers provide limited information to agents on claims processing and payments. “That’s one of the most frustrating things, probably for agents around the country too. That could be improved,” she said.

Flood Insurance Uptick

One positive that has come in the aftermath of Hurricane Michael and other recent storms is an apparent increase in the take-up rate of flood insurance, according to OIR data. The state’s private flood insurance market has grown 169% since 2017, OIR said, with private carriers writing more than 62,000 personal primary flood insurance policies in the state. There are now 29 private insurers writing flood coverage in Florida. “The growth has been a testament to the partnerships and collaborative efforts INSURANCEJOURNAL.COM

of various agencies and entities, however, there is plenty of work to be done to close the flood insurance gap that currently exists in the homeowners market,” OIR said. The National Flood Insurance Program had more than 1.7 million Florida policies in force as of Sept. 30, 2018. As of July 1, regulated lending institutions are required to accept private flood insurance policies that meet the Biggert-Waters Act’s definition of private flood insurance, which could spur furthergrowth in the market. Florida also passed a bill this session requiring insurers to include certain language on homeowners insurance policies that do not include flood insurance coverage. "We believe this an extremely important disclosure and through a continued collaborative approach to creating awareness on common insurance misunderstandings, we hope the number of homeowners who purchase flood insurance increases," OIR said. Florida-based carrier Capitol Preferred Insurance is one carrier that has seen an

increase in interest for flood insurance. “With each storm season trending more severe than the last, we’ve discovered our clients find comfort in adding flood insurance to their policies,” said Jimmy Graganella, president and CEO of Capitol Preferred Insurance. Chubb said the company generally sees an increase in flood quote requests and the purchasing of coverage after hurricane season or other severe storms. “Everyone is susceptible to this risk and needs to be educated about it and have the right insurance protection in place,” said Ana Robic, chief operating officer for Chubb Personal Risk Services. Karen Kirkland of Kirkland Insurance Agency said she has written at least 30% more flood coverage this year than in previous years, mostly with the NFIP because policies are generally more affordable and offer better coverage. “The agents around here have preached flood for a long time and now everyone understands why,” she said. “Once you go through something like this everyone understands the importance of the coverage.” JULY 15, 2019 INSURANCE JOURNAL | FLORIDA | 9


News & Markets Addressing Florida’s

Rising Tide of Flood Exposures

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n the past five years, all 50 states have experienced some type of flooding. Flooding has led to disasters throughout the decades, and this By Jim Kane year, it is expected to become unprecedented yet again. Despite a long history of flood-related disasters and predictions for the future, many Americans have little or no insurance coverage to protect their homes and personal property from damage caused by floods. Climate research firm States at Risk estimates 3.5 million people in Florida are at risk for coastal flooding, yet many homeowners don’t purchase insurance coverage because of a lack of education or because they rely on antiquated mapping systems that provide a false sense of security. According to the Insurance Information Institute, the National Flood Insurance Program (NFIP) has 1.7 million policies in Florida, more than any other state. Still, only about half of homeowners inside high-risk areas had insurance against flooding before Hurricane Irma made landfall on Sept. 10, 2017.

The Draw of the Coastline

Population growth along the U.S. coastline continues to increase steadily. The 2000 U.S. Census indicated that 48.9 percent of Americans live within 50 miles of a coast, including saltwater tributaries and the Great Lakes. Experts predict that this percentage will continue to rise. The American Community Survey (2011-2015), estimates that 26 percent of Florida residents live in the combined 100-year and 500-year flood plains as indicated by NFIP. The risk of damage from flood water is real and growing in a large percentage of the U.S. and even more so in Florida. In addition to an increased number of residents living near water, other factors have heightened flood exposure chances. 10 | INSURANCE JOURNAL | FLORIDA JULY 15, 2019

According to the National Oceanic and Atmospheric Administration (NOAA), the two major causes of global sea level rise are thermal expansion caused by warming of the ocean (since water expands as it warms) and increased melting of land-based ice, such as glaciers and ice sheets. Adding to the pressure from the increased water levels are the sinking coastlines. As we draw water from below ground, the land sinks to fill the void. The nonprofit Sea Level Rise Organization predicts that this pattern will pick up pace and the same level of rise that previously took 60 years will now occur in just 20 years, placing an additional 1.1 million people at risk. The Florida peninsula is clearly in the cross hairs of the rise in tides, and the effects are exacerbated by the flat terrain.

“The risk of damage from flood water is real and growing in a large percentage of the U.S. and even more so in Florida.” The Gap in Coverage Versus Risk

Regardless of the media coverage and barrage of data on the rising impact of flood waters, the Insurance Information Institute’s 2018 PULSE survey estimates that only 15% of Americans purchased an NFIP policy. The lack of participation is due to several factors. The process to obtain insurance through NFIP is just one of the obstacles limiting the program’s market share. With good reason, NFIP was implemented with certain restrictions. Some of the roadblocks include a 30-day waiting period to activate coverage, limited protection ($250,000 on the dwelling) and reduced coverage and claims settlement terms. The cumbersome process to secure NFIP protection causes delays and often results in the client not following through.

The Flood Insurance Protection Act of 1973 imposed restrictions on lenders as a method to force residents living in a flood plain to secure coverage when buying a home with a mortgage. Of the more than 200,000 Texas homes damaged in Hurricane Harvey, 75 percent were not in the 100-year flood plain according to an article in the Houston Chronicle. These victims responded that they did not buy flood insurance because their mortgage company did not require it. Prior to the most recent amendments through the Biggert-Waters Act, lenders could not accept private insurance as proof of coverage. With the increase in storms and the financial stresses that the NFIP faces ($25 billion in debt), Congress has taken steps to ease these limitations and expand private insurance solutions. The key to effective transfer of risk through insurance is a larger number of clients participating. With only 15% of Americans purchasing flood insurance, the predictability of the results become more difficult.

Private Flood Market Booms in Florida

Florida has taken the lead in fueling the growth of a private flood market for its constituents according to Lisa Miller, former Deputy Insurance Commissioner of Florida and current lobbyist for the admitted market. In the recent Risk Management and Insurance Review article, “Two New Developments Hold Promise for the Private Flood Insurance Market,” Miller describes the growth. While most states have no private flood market, Florida residents have access to 30 markets as a result of 2014 legislation written to encourage expansion of the private flood insurance market. According to Miller, the statute has succeeded in giving Florida residents outlets for coverage and affordable rates by increasing participation and improving the catastrophe modeling. The private flood market has garnered the attention of the INSURANCEJOURNAL.COM


National Council of Insurance Legislators (NCOIL), which is working on revamping the model legislation for private flood using the statute in Florida as the foundation for new language.

21st Century Solutions for a 21st Century Problem

The NFIP is in desperate need of modernization. Congress has tweaked the program over the course of the last 50 years, but we continue to rely on 1970’s data and processes. Implementation of technology and analytics would improve the client experience and the underwriting results. Community awareness and strategic planning are first steps towards better protection from the threats. Billy Grayson, executive director for the Center for Sustainability and Economic Performance at the Urban Land Institute, recognized the cities of Miami and Miami Beach for proactive efforts to address the impact of climate change at the 2019 Sea Level Rise Conference. Both towns have commitINSURANCEJOURNAL.COM

ted city resources toward infrastructure improvement and loss mitigation plans to combat the rising tides. Preventing and reducing loss is a far better investment than paying claims post-loss. However, this requires not only an understanding of the issues but also the discipline needed to make long-term investments. Advances in technology have become crucial in assessing a homeowner’s true risk and loss prevention. Firms such as Florida-based Coastal Risk Consulting and California-based CoreLogic can precisely map topography using LIDAR (light detection and ranging) to model water inundation and storm surges and assess risk by location. Damage from recent flooding validated this methodology. Modeling allows for adjustment of insurance rates by individual risk as opposed to the more archaic process of calculating rates for blocks of homes situated in a flood zone mapped by FEMA in the 1970s. This information is more easily implemented in the rating of

private insurance than the current NFIP. In addition to modeling, CoreLogic and Coastal Risk Consulting, among others, stress the importance of loss control and mitigation. From floats designed to protect your vehicles, to flood gates and sea walls, the old adage that “an ounce of prevention is worth a pound of cure,” holds true. If we hope to protect clients from the increasing risk of flood exposure and damage, the insurance industry must recognize and meet the challenges of the changing environment and landscape. We must educate homeowners, utilize the most relevant data and mapping technology and strive to prevent losses for the sake of our clients and our communities. Jim Kane is a SVP of USI Insurance Services in Valhalla, N.Y. He began his insurance career in 1985 with General Accident Insurance and has served in various roles with regional and national brokerages. Kane also serves as president of the Board of Trustees for the Private Risk Management Association (PRMA). He can be reached at: Jim.Kane@usi.com. JULY 15, 2019 INSURANCE JOURNAL | FLORIDA | 11


News & Markets Challenges Facing the Florida Insurance Market: A Reinsurer’s Perspective

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urricanes Irma and Michael served as a reminder that Florida, more than any other state, is at risk of one of the By Maria DiMaggio most intense natural perils, namely hurricanes. The existence of a stable insurance market providing its customers with a wide choice of affordable insurance is essential for the Florida econoand Frase Oliver my to prosper. Nonetheless, the Florida insurance market faces various challenges, the most critical from a reinsurance perspective being: The litigious environment that is driving unprecedented social inflation threatening the affordability and availability of private insurance and impairing (re)insurers efforts to address existing insurance protection gaps with innovative products. The need to enhance and consistently enforce building codes reflecting the latest scientific developments to create more resilient communities that will save lives and mitigate damage from catastrophes.

Social Inflation Impacts Private Insurance

to unprecedented levels, thereby increasing the loss burden to reinsurers considerably beyond original projections. This reversed the trend of falling reinsurance costs since 2012 during the latest June 1 renewals with many catastrophe reinsurance programs having to pay significantly higher premiums to reflect the new levels of social inflation observed in the Florida homeowners’ insurance market. Social inflation driven by excessive litigation resulting from AOB abuse, amongst other causes, threatens the affordability of homeowners insurance and, in the worst case, the availability of private insurance products. This has already been observed in the southeast of Florida where various private homeowners insurance carriers have ceased to write new homeowners insurance policies, thus reducing choice for customers. The link between water-related losses and AOB-driven litigation has caused concerns in the marketplace as to how social inflation could adversely impact innovative flood options aimed at encouraging higher flood insurance take-up rates among Florida homeowners. Currently, too many Florida homeowners who are at risk of flooding are uninsured. There are about 2.5 million homes in FEMA flood zones in the state of Florida,

yet, FEMA says that as of February 2018, only 46% of the homes located in a 100year floodplain are insured against the peril. For those homes outside the 100-year floodplain, the risk of damage from flood is still high, but as coverage is not required by federal-backed lenders, the take-up rate is even lower. This leaves an “insurance gap” that can – in the worst case scenario – put a homeowner and an entire community at risk of financial ruin.

H.B. 7065 – A Much Needed Reform

The recently passed property insurance AOB reform bill, H.B. 7065, should bring much needed relief for the Florida insurance market. It addresses the abuse of postloss AOBs by clarifying insureds’ rights related to the execution, validity and effect of AOB agreements, allowing insurers to include provisions in their insurance policies that prohibit or restrict the use of postloss AOBs, and enables insurers to monitor and limit the cost of emergency repairs to reasonable amounts. It also introduces a more equitable method to establish which party, if any, will get attorney fees awarded, reducing the incentive for excessive use of litigation to resolve disputes. The reform bill is an important first step to address the unsustainable levels of

A March 2019 Insurance Information Institute report found that litigation related to assignment of benefits (AOB) increased by 70% from 2013 to 2018 – increasing even in years without a major hurricane. In fact, many homeowner AOB water claims are related to non-weather water damage. This, and other unfavorable litigation and loss adjustment cost trends, led to a strong rise in non-catastrophe loss ratios in the Florida homeowners’ insurance market and, consequently, approved rate increases to counter the exponential growth in social inflation costs associated with homeowner property losses. Social inflation also drove the loss adjustment expenses from Hurricane Irma 12 | INSURANCE JOURNAL | FLORIDA JULY 15, 2019

INSURANCEJOURNAL.COM


social inflation in the Florida homeowners insurance market. However, there is still a great deal of work ahead in terms of educating consumers about their new rights under H.B.7065 and for insurance companies to adapt their homeowner claims procedures to the new law while keeping their customers at the forefront of their mind. We expect that AOB reform will result in stabilizing insurance costs and that, over time, Florida will be able to address the other factors that are driving social inflation. And only then will the legal reform unfold its full potential to curtail the exponential growth in social inflation thereby further stabilizing insurance costs, enhancing consumer choice and enabling innovation such as private flood solutions.

repairing or (re)building a home. From litigation reform to helping homeowners understand all the ways they can protect themselves, their homes and their financial wellbeing, the reinsurance industry will continue to work toward creating a strong and viable Florida insurance market.

Maria DiMaggio is a VP and Property Treaty underwriter in the Reinsurance Division of Munich Reinsurance America, Inc. She can be reached at: MDiMaggio@munichreamerica.com. Oliver Frase is a senior VP and Property Treaty underwriter in the Reinsurance Division of Munich Reinsurance America, Inc. He can be reached at: OliverFrase@ munichreamerica.com.

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Building Resilient Communities to Thwart Flood and Wind

While homeowners insurance, including adequate wind and flood coverage, is critical to helping rebuild after a loss, it’s also important to try to minimize the loss before it occurs. Communities need to think about building resiliently to withstand today’s natural perils as well as the future impacts of climate change. Resilient communities may be able to rebound more quickly following a natural catastrophe, resulting in more lives saved and a quicker return to normal for the local economy. Following Hurricane Andrew in 2002, Florida implemented statewide building codes needed to respond to a new level of storm devastation. In 2018, Hurricane Michael exemplified the value of resilient buildings post-storm as homes constructed to Florida’s building codes helped save assets and, more importantly, save lives. In contrast, the older buildings in the Florida Panhandle that were built prior to the 2002 building codes were not as able to withstand Hurricane Michael and, instead, experienced major structural damage or total loss. Education is vital to help homeowners understand the ways they can fortify their homes. Non-profit organizations and many insurance agents and reinsurance companies have stepped up efforts to provide Floridians with the information they need to make resilient choices when it comes to INSURANCEJOURNAL.COM

NO OTHER INSURANCE COMPANY CAN OFFER THIS BENEFIT! Our patented Deductible Installment Plan is now available to all HO3 and HO6 insureds at no extra charge! Now, if homeowners incur property losses from a hurricane or another catastrophe peril, they no longer have to delay their repairs until they can pay their deductible. • If homeowners use one of our preferred vendors, their repair work can begin immediately while they pay their deductible in three installments. • No payment is due for the first six months. The last two payments are billed on an annual basis thereafter. Payments can be made sooner. • No fees. • No interest. • No credit check. • No increase in premium. • We will offer to provide a deductible advance to cover up to 2% of the coverage A limit for a covered loss.

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Working Together. To learn more, call us at 1-877-560-5224. A patent has been filed. Must use a Cypress approved vendor. Not applicable to HO4 policies. This document is a brief description of the DIP benefit and is not meant to be a contract, please refer to actual endorsement. Please refer to your policy for full terms and conditions. Only offered in Florida.

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JULY 15, 2019 INSURANCE JOURNAL | FLORIDA | 13


Florida Fraud Roundup

Miami Insurance Agent Arrested for Pocketing $476K in Fraud Scheme

A licensed Miami insurance agent was arrested in April after she allegedly obtained and transferred more than 300 homeowners insurance policies without homeowners’ knowledge or consent and pocketing nearly $476,000 from the policy premium differences in this scheme, according to a statement from Florida Chief Financial Officer Jimmy Patronis. Claudia Odila Romoleroux, owner of RND Insurance Corporation, is accused of fraudulently obtaining more than $877,000 in premiums for 307 homeowners policies. Romoleroux’s alleged scheme included supplying mortgage companies with fraudulent documents and requesting the homeowners’ escrow money be sent to her business account to pay for new policies. Romoleroux allegedly used a portion of that money to pay for cheaper policies with inadequate coverage. Through this alleged fraud, Romoleroux pocketed nearly $476,000. Romoleroux was arrested April 4 and booked into the Turner Guilford Knight Correctional Center on charges of grand theft, uttering forged instruments, insurance fraud, identity theft and organized scheme to defraud. If convicted, she faces up to 25 years in prison. Her insurance license was immediately suspended upon the filing of formal charges.

Florida Arson Investigators Catch Serial Arsonist

A Florida man believed to be responsible for multiple fires in the Umatilla area of Lake County, Fla., was arrested in April, 14 | INSURANCE JOURNAL | FLORIDA JULY 15, 2019

according to a statement by Florida CFO Jimmy Patronis. James Anthony Bennett was arrested on April 18 on four counts of arson and two counts of armed burglary after a joint investigation by arson detectives from the Florida Department of Financial Services, the Lake County Sheriff’s Office and the Umatilla Police Department. The joint investigation revealed Bennett allegedly committed several acts of arson in the Umatilla area, including two structure fires occurring at the Old Crow Real Pit Bar-B-Q and at Sunoco. In addition, he is a suspect in multiple vehicle fires. All fires occurred in the same region of Lake County and within a 25-hour time span. Bennet was booked into Lake County Jail on charges of first and second degree arson and burglary. If convicted, he faces up to 150 years in prison. Patronis called on the public’s help back in February to catch the suspected serial arsonist. “If you commit arson, you will be caught and you will be locked up,” Patronis said.

‘Operation Rubicon’ Nets 9 Arrests in Miami in $600K Insurance Fraud Scheme

Nine individuals and business owners were arrested in April for their alleged involvment in a large-scale organized scheme to defraud insurance companies out of more than $600,000 in fraudulent insurance claims, according to a statement from Florida CFO Jimmy Patronis. The arrests came after a year-long joint insurance fraud investigation dubbed “Operation Rubicon” that included fraud detectives with the Florida Department of Financial Services, the Miami-Dade Police Department and Miami-Dade State Attorney Katherine Fernandez Rundle’s office. The joint fraud investigation was initiated after several insurance companies notified authorities of suspected fraudulent residential insurance claims in the South Florida and Tampa areas. Detectives believe The Rubicon Group, a public adjusting company owned by Barbara Maria Gonzalez, committed organized fraud and grand theft.

Gonzalez allegedly utilized the services of unscrupulous Florida companies, including water mitigation and restoration companies, insurance agencies and agents, appraisers and willing homeowners to allegedly commit the fraud. Those arrested include: Barbara Maria Gonzalez, Rafael Exposito, Rigoberto Lopez, Ricardo Alvarez, Jose Gonzalez, Romy Valdespino Rodriguez, Alessandra Kruger, Alicia Pardey, and Ricardo Tello. Rundle said on her Twitter page that 26 homeowners had been identified as participating in the scheme, and more arrests were expected.

10 Arrested in Florida Unlicensed Contractor, Workers’ Comp Fraud Sting

Ten individuals were arrested in early June in a three-day unlicensed contracting and workers’ compensation fraud sting in Pinellas County, Fla., according to a statement from Florida CFO Jimmy Patronis. The joint operation between fraud detectives with the Florida Department of Financial Services, which Patronis oversees, and the Pinellas County Sheriff’s Office, dubbed ‘Operation Stonewall’, was launched to address unlicensed contractors who were both working without a required contractor license and without required workers’ comp coverage. From June 1-3, fraud detectives and the Pinellas County Sheriff’s Office conducted a joint sting operation that caught contractors allegedly agreeing to perform work without a license and without the proper workers’ comp coverage. The following 10 individuals were arrested on charges of contracting without a license and failure to secure workers’ compensation insurance coverage: Randy Allen Jeziorski, Kerrigan Leo Cowles, Sidney Lisojo, Jason Robert Gamache, Kris Douglas Kelley, Dennis Disney Garlock, Nicholas Guiseppe D’Alessandro, Marcello McIntosh, Richard Thomas Ouellete, and Alberto Chanelo. All individuals were booked into the Pinellas County Jail. If convicted, each face up to five years in prison. Patronis noted DFS fraud detectives have made nearly 600 arrests for working without workers’ compensation insurance coverage since he took office in 2017. INSURANCEJOURNAL.COM


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Profile for Insurance Journal

Insurance Journal Florida Supplement 2019-07-15  

Insurance Journal Florida Supplement 2019-07-15