An Early Look at the 2013 Legislative Agenda
The campaign commercials on TV are a constant reminder that the fall election cycle is rapidly approaching. The presidential election commands most of the attention, but state legislative races have the most immediate bearing on insurance legislation in this state. As soon as the winners emerge from this fall’s elections, the legislature will hold and organizational session and committee weeks will begin. This will rapidly lead to the 2013 legislation early next year. At this early stage, we can speculate that a wide range of insurance topics are likely to arise in 2013.
Citizens Property Insurance Corporation and the Florida Hurricane Catastrophe Fund
It goes almost without saying that Citizens Property Insurance Corporation and the Florida Hurricane Catastrophe Fund (FHCF) will be the subject of legislative debate next year. Support for reducing Citizens’ policy count has grown in recent months as policymakers look to shrink the potential assessment burden and enhance the private market. New CEO Barry Gilway is actively seeking to reduce Citizens’ policy count by 500,000 policies or more. However, Citizens serves as a lower cost alternative in many instances because its rates are subject to mandated subsidization– a statutorily-imposed glide path. Discussion in next year’s session therefore can be expected to center upon Citizens’ rate levels and coverage.
Potential legislation relating to the size of the FHCF also might resurface. Earlier this year the FHCF advanced legislation that would gradually reduce its size and increase its cost over several years. The proposal arises from the FHCF’s concern that global economic conditions diminish its ability to issue bonds. The FHCF seeks to provide coverage at levels it considers a “sure thing” rather than facing the possibility of not being able to fully pay.
Federal Health Care Act
The Supreme Court’s recent ruling ensures that Florida and other states must evaluate the new health care law and potentially make legislative changes needed to implement it. Governor Rick Scott has said repeatedly that Florida will not expand its Medicaid program. Likewise, Florida is not expected to create a state health insurance exchange. Even so, these issues are likely to evolve over the next several months, and the 2013 session will address (through action or omission) Florida’s position on the new law.
Workers’ Compensation
Governor Rick Scott and Insurance Commissioner McCarty seek to reduce the cost of doing business in this state. In the insurance arena, the cost of workers’ compensation insurance plays into this overall goal. The OIR likely will pursue several changes to help control workers’ compensation costs. One topic likely to re-emerge is the issue of drug re-packaging. The OIR also supports the recommendation developed by the Three-Member Panel last year. Drug re-packaging reform was among these recommendations. In addition, the panel recommended that the Division of Workers’ Compensation continue its practice of permitting health care providers to electronically submit medical bills to insurers, provided the insurer agrees to accept the submission of electronic medical bills. The panel further recommended that the Division determine whether to mandate electronic billing no later than 2015.
The panel also recommended that the legislature consider repealing section 440.13(15), Florida Statutes, and replace it with an alternative that translates the mandates of section 440.13(16), Florida Statutes, (Standards of Care) into meaningful treatment guidelines. The panel suggested that the legislature study the various types and sources of available practice guidelines to determine which is most appropriate for Florida and determine how it should be developed and implemented.
Finally, the panel recommended that the legislature consider authorizing an interim study to determine whether to retain, update, amend, or replace the Florida Uniform Impairment Rating Schedule.
Holding Company Model Act
The Office of Insurance Regulation is expected to seek adoption of the NAIC Model Holding Company Act and Regulation. Florida-based insurers will recognize that the OIR recently asked a series of questions about insurers and their holding companies, and it reminded insurers to ensure their holding company registration statements are up to date. The OIR would like to take the further step of adding Florida to the states adopting the model act.
Life Insurance
OIR, the Florida Insurance Council, the American Council on Life Insurance and others are expected to pursue adoption of the interstate compact on life and health products and an expanded annuities suitability law similar to HB 1065 from the 2012 session.
The high-profile topic of Stranger-Owned Life Insurance (STOLI) and its prohibition in Florida also is likely to return.
Personal Injury Protection
Finally, the legislature might not have much appetite to deal with Personal Injury Protection (PIP) reform after the battles of 2012. Nonetheless, implementation of key aspects of the law remains pending, especially as Pinnacle Actuarial Consulting evaluates the expected savings due to the reforms. Insurers’ rate filings due by October 1 must reduce rates by ten percent, or else the insurers will be required to demonstrate why the expected savings haven’t been achieved.
We can already see that a wide range of topics might be actively debated in the 2013 legislative session. The fall campaign season will determine the cast of participants, and as soon as that is set the committee process will lead us quickly into the debate of these topics. As always, we’ll follow the proposals on our website at www.radeylaw.com.