November 26, 2007
--by Gail Shuffler, City of Tallahassee, FASI President
The holidays are fast upon us and the results of recent legislative action are yet to unfold in their ramifications. The suspension of PIP until 2008 and its new administrative requirements will certainly prove interesting and will keep adjusters busy determining what coverage applies and how much. Citizens Insurance assessments continue to add costs to all policies and have Floridians scratching their heads in puzzlement of how these measures saved them any money.
Meanwhile, In Another Part of Town
--by John Darin
For many years prior to 2003, the engine driving the Florida Workers' Compensation system had been claimants' attorneys, who were fueled on by a statute that provided them with hourly fees to be paid by carriers and self-insureds when they won on any issue, no matter how trivial. A simple mathematical error by an adjuster resulting in temporary benefits being off by four cents would not just result in penalties and interest being paid to the worker; the error could also result in a self-insured paying thousands of dollars in hourly fees to an attorney. That was the state of the law in Florida prior to 2003 when the legislature replaced the hourly rate statute with one by and large awarding claimants' attorneys with a percentage of what they win. This was more like personal injury contingent fee cases, but at lower percentages because in the comp no-fault system, there is less risk to attorneys and the legislature wanted the injured workers to keep more of their benefits when they paid their own fees.
The Florida Supreme Court had considered constitutional challenges to the new percentage fee structure when it denied review in Lundy v. Four Seasons Ocean Grand Palm and Campbell v. Aramark in 2006, so it looked as if lower Court of Appeals' decisions that the fee statute was constitutional were sound. In part based upon the appearance and expectations those decisions created that the 2003 changes were constitutional, the Florida Office of Insurance Regulation around October 23, 2007, recommended an 18.4 percent rate reduction for workers' compensation. The NCCI had confirmed significant drops in Florida workers' compensation costs each year since 2003.
MEANWHILE, IN ANOTHER PART OF TOWN, the Florida Supreme Court entered an Order on October 30, 2007, to exercise its discretionary jurisdiction in the case Emma Murray v. Mariner Health/ACE USA, in which the Appellant challenged the constitutionality of the 2003 fee statute. The Statute was challenged for violating injured workers' rights to due process, equal protection, access to courts and also contravening the seperation of powers doctrine. If the Florida Supreme Court finds the percentage fee statute unconstitutional, it is likely the Courts would revert to old pre-2003 case law, which would result in a return to hourly fees being paid by carriers and self-insureds, wiping out future reductions like those experienced since 2003. FASI will be requesting permission from the Florida Supreme Court to file an Amicus brief on this important issue.
How the insurance industy should coordinate the recent rate reduction with the onslaught of litigation which will result if the statute is found unconstitutional is not at issue before the Florida Supreme Court.
--by Mark Resler
Our 2008 membership drive is well under way. Renewal notices were distributed in October. Please look for these and renew your FASI membership if you have not already done so. We really need your support, and we welcome your input. Speaking of input, your chance to voice your concerns is right around the corner. FASI’s January meeting near Orlando, Florida, is the annual planning session. It’s the best venue to get your interests addressed, which could end up as part of the program at the annual educational conference at Naples in July.
As committee chair, I want to express my sincere gratitude for your being a FASI member and for your participation in FASI during 2007. I am looking forward to an even better 2008.
Please contact FASI directly at 1-800-226-FASI (3274) if you know of anyone interested in discussing FASI memberships, or pass this number on to the interested party, or refer them to the website www.fasi-fl.org.
FASI's Winter Planning Meeting...
Mark your calendar for January 31 - February 1, 2008, Planning meeting at the Orlando Marriott Lake Mary in beautiful Lake Mary, Florida (click here for program and registration form) and July 20-23, 2008, FASI’s 39th Annual Educational Conference & Tradeshow!
If you have questions or comments about the FASI E-Newsletter, please contact: Bill Kautter at email@example.com (800-226-3274) or Newsletter Chair John Darin at firstname.lastname@example.org.