Michael Moline – Page 2 – Florida Politics

Michael Moline

Michael Moline is a former assistant managing editor of The National Law Journal and managing editor of the San Francisco Daily Journal. Previously, he reported on politics and the courts in Tallahassee for United Press International. He is a graduate of Florida State University, where he served as editor of the Florida Flambeau. His family’s roots in Jackson County date back many generations.

Florida CAT Fund healthy, but council contemplates doomsday scenario

The Florida Hurricane Catastrophe Fund has reserves enough to easily cover its Hurricane Irma liabilities — as much as $300 million in excess of its $17 billion statutory liability limit.

But what happens if a major storm — or a swarm of them — wipes out the fund’s assets? It might have to demand emergency assessments of a broad array of policyholders.

Council staff stressed during an advisory council meeting Thursday that they were talking really-bad-case scenarios. But it’s not like it hasn’t happened before, chief operating officer Anne Bert said.

“We certainly faced that in 2006, because we wiped out the CAT Fund in ’04 and ’05,” she said.

“It’s not the worst. The worst would be if we didn’t have any pre-event bonds,” Bert said. Still, “This one’s pretty bad.”

The fund floats those “pre-event” bonds as contingency against disasters.

A wipe-out would leave it with $2.75 billion in liquid assets. It likely could float another $8.2 billion in bonds at that point, but the fund would need to borrow an additional $6 billion-plus to rebuild its reserves.

Those emergency assessments would pay debt service on such “post-event” bonds, Bert said.

“None of this is fee money. We have to pay it back. And we will turn to the policyholders of the state of Florida to help us pay it back,” Bert said.

As for a bond issue, “Hopefully, the market would allow us to do that,” she said.

She referred to the capital market — infusions from private reinsurance companies or Wall Street actors looking for places to park cash.

“Interest rates are low right now. There are people looking for yield,” Bert said. “They just are.”

Back to the present: The fund holds $14 billion in cash, and is looking into selling $1 billion in risk to the capital markets. It controls $2.2 billion in pre-event bonds.

“We’re in great shape,” Bert said.

According to a Raymond James analysis, the three major rating agencies have given the fund their top rankings not least on the strength of its $46.8 billion premium base. The fund could raise $2.8 billion in assessments to cover storm damage during a single contract year.

The industry-wide loss from Irma has been estimated at more than $8 billion. The fund’s share exceeds $2 billion, nearly $400 million of which it has paid thus far. Its client insurers typically prefer to be paid in installments, according to fund staff.

Task force OKs $1.3 million in grants to advance military

A state task force on Thursday approved grants worth nearly $1.33 million for projects designed to support military installations and preserve Florida’s reputation as the most military-friendly state.

They included land and easement buys neighboring the Avon Park Air Force Range and Camp Blanding; development of a Bay County innovation center to advance amphibious warfare; and support for efforts to lure the MQ-9 Reaper drone wing to Tyndall Air Force Base, also in Bay County.

The programs are designed to help the state adjust as advances in technology revolutionize defense strategy, potentially rendering the military programs that comprise the state’s second-biggest economic driver obsolete.

“Our operations here are being devalued,” said Sen. Doug Broxson, the Pensacola Republican who chairs the Florida Defense Support Task Force.

“We’ve got to do a better job of communicating that to our members in the Legislature,” he said. “The people that represent this group are the eyes and ears of 20 major installations that are telling us what’s important to them.”

Florida enjoys one unique asset, however — the 120,000-acre military testing range in the Gulf of Mexico. It contributes an estimated $80 billion to Florida’s economy, and the task force is intent on protecting it from encroachment by oil exploration or other incursions.

There’s not enough oil out there to compensate for the range’s loss, Broxson said.

The Avon Park plan envisions purchase of easements on nearly 370 acres north of the test range. Because the area lacks extensive artificial lighting, pilots can practice night attack missions there, said Gaye Sharpe, director for parks and natural resources for Polk County. The panel approved $90,000.

It OK’d another $500,000 for “sentinel landscape” program to preserve farms, ranches and forests in “military-influence planning areas” surrounding the facility.

Camp Blanding is the training center for the Florida National Guard, active duty troops, and a number of law enforcement agencies. The panel signed off on $500,000 to leverage $1 million in Department of Defense money to expand the buffer zone between the camp and its neighbors and wetlands.

Bay County sought $120,000 to begin building an Expeditionary Innovation — or EXCell — Center in support of the Navy’s surface warfare, diving and salvage training center, and experimental diving unit in Bay County. It got $95,000.

The program would leverage academic, military, and private resources to develop new technologies and strategic thinking, said Christopher Moore, of the Bay Defense Alliance.

The Air Force has indicated that Tyndall is its preferred site for the Reaper program, but Vandenburg Air Force Base in California is also in the running. The panel approved $144,000 for a program is designed to demonstrate community support for integrating the program, projected to bring 1,600 jobs into the area, said Loretta Costin of Gulf Coast State College.

Pam Bondi lawsuit accuses opioid industry of racketeering

Attorney General Pam Bondi filed a racketeering lawsuit Tuesday, blaming five major pharmaceutical companies for instigating the opioid drug crisis and alleging “a campaign of misrepresentations and omissions” about the powerful painkillers to doctors and consumers.

Bondi’s office filed the 54-page complaint in Pasco County, which it identified as among the state’s hardest hit areas, with the highest overdose mortality rate between 2004 and 2012.

“We are in the midst of a national opioid crisis claiming 175 lives a day nationally and 15 lives a day in Florida, and I will not tolerate anyone profiting from the pain and suffering of Floridians,” Bondi said in a written statement.

“The complaint I filed today seeks to hold some of the nation’s largest opioid manufacturers and distributors responsible for their role in this crisis and seeks payment for the pain and destruction their actions have caused Florida and its citizens,” she said.

Agriculture Commissioner Adam Putnam appeared alongside Bondi at a news conference, held Tuesday afternoon at Riverside Recovery of Tampa, a drug and alcohol rehabilitation facility.

“This lawsuit will result in the resources for additional treatment, prevention, awareness, additional facilities, like this, additional tools and support for the men and women in law enforcement, so that we can break the hold that this opioid crisis has on our state and on our nation,” Putnam said.

The lawsuit names Purdue Pharma L.P.; Endo Pharmaceuticals Inc.; Janssen Pharmaceuticals Inc.; Cephalon Inc.; and Allergan PLC.

It also names the following drug distributors: AmerisourceBergen Drug Corp.; Cardinal Health Inc.; McKesson Corp.; and Mallinckrodt LLC.

The complaint alleges violations of Florida RICO and unfair trade practices laws, plus negligence.

It seeks unspecified monetary damages — including treble damages, designed to discourage egregious misconduct; restitution on behalf of state agencies and consumers; disgorgement of “ill-gotten proceeds;” divestment of any business or real assets linked to the alleged misconduct; and forfeiture of property used to promote the scheme.

“The state of Florida brings this civil action to hold the defendants accountable for unconscionably creating the state of Florida’s opioid public health and financial crisis,” the complaint says.

“The defendants reaped billions of dollars in revenues while causing immense harm to the state of Florida and its citizens, and now they must pay for their role in the crisis and act to remediate the crisis.”

Pasco and Pinellas counties, comprising FDLE District 6, recorded the highest number of oxycodone deaths in the state during 2016, according to the document. That same year, the Pasco County Sheriff’s Office treated nearly 2,00 inmates for opioid addiction. Last year, someone overdosed in Pasco County an average of once every three days.

“The disproportionately high overdose rates were the direct, readily foreseeable result of the shockingly high amounts of opioids which have been funneled into Pasco County throughout the crisis,” the complaint says.

“For example, a single pharmacy in Hudson, Florida — a Pasco County town of 34,000 people — purchased 2.2 million opioid pills in just one year (2011). That same year, another pharmacy dispensed more than 1.4 million opioids in Port Richey, Florida.”

Bondi’s office alleged a “strategic campaign of misrepresentations about the risks and benefits of opioid use to physicians, other prescribers, consumers, pharmacies, and state governmental agencies.”

This, the complaint alleges, included the use of “front organizations” and medical professionals hired to promote opioids without acknowledging that they actually served as the manufacturers’ “mouthpieces.”

“Because they are so dangerous and addictive, Florida imposes obligations on both manufacturers and distributors of opioids aimed at preventing the misuse of these drugs and their diversion into the marketplace for uses other than legitimate medical uses,” the complaint says.

“Because of the actions of the defendants in violating these duties, the closed chain of supply broke down in Florida, leading to a massive public health crisis that continues to ravage the state.”

Chief Financial Officer Jimmy Patronis issued a written statement endorsing the lawsuit and calling Bondi “a fearless warrior against the opioid epidemic.”

Update: Putnam said state GOP leaders, including House Speaker Richard Corcoran, Sen. Wilton Simpson, Rep. Jim Boyd, and Bondi, have “led the way” in fighting opiates.

Gwen Graham, seeking the Democratic nomination for governor, disputed that assessment.

“After years of inaction and with just months left in their terms, Pam Bondi, Adam Putnam and Republican leaders stood at a news conference today to take credit for a lawsuit that should have been filed years ago,” Graham said in a written statement.

“I’m glad they are finally taking this long overdue step but remain disappointed it took them so long to do so,” Graham said. “Under Lawton Chiles, Florida led the nation in suing big tobacco. Under Pam Bondi and Adam Putnam, we’re following behind other states — and Florida families have paid the price.”

Sean Shaw, a Democrat running for attorney general, issued the following statement:

“Unfortunately, today’s action is too little too late for the families in our state who have been devastated by a preventable epidemic had action been taken years ago before we reached this tipping point. It is disheartening that it took eight years of warnings, thousands of unnecessary deaths, and for her time in office to be coming to an end for Attorney General Bondi to finally acknowledge that Floridians have been facing an overwhelming opioid crisis.

“As attorney general, I won’t wait until others have acted to be an advocate for Floridians who are suffering. Our state deserves a top legal officer who will lead in the face of a crisis, not one who will have to be pressured into acting in the best interests of our citizens.”

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Info used to combat AOB abuse triggers lawsuit over ‘secrets’

Details of insurance claims gleaned for the ongoing battle against assignment of benefits (AOB) abuse are “trade secrets” that should be shielded from public view, a new lawsuit says.

Universal Property & Casualty Insurance Co. recently filed in Leon County Circuit Civil court against the Office of Insurance Regulation (OIR), seeking to block it from complying with a public records request. Thomas Crabb of The Radey Law Firm in Tallahassee represents Universal in the action.

In the complaint, the insurer identified the source of that request as Gray Proctor of Orlando, who sought details of individual homeowner claims and the procedures for processing those claims. His website describes him chiefly as an appellate attorney who also offers trial support services.

Similar suits are filed every year, generally after an interested party has filed a records request seeking to use “open source intelligence,” or public records, to gain a business advantage on its competitors.

But the “Florida Legislature has expressly made trade secrets confidential and exempt from disclosure under the Public Records Act,” the complaint asserts.

State law describes a trade secret as business information that is secret; of value; of use in business; and of advantage to the business or to competitors who might learn of the information. The owner of the secrets must have taken steps to preserve their confidentiality.

The complaint identifies Universal as Florida’s largest homeowners insurer, with more than 600,000 policies in force bringing premiums in excess of $900 million per year. That’s 180,000 policies more than the second largest, Citizens Property Insurance Corp.

It cites industry-wide “data calls” in 2015 and 2017, as the insurance office attempted to come to grips with the extent of AOB abuse. The office, individual insurers and business allies have long complained that unscrupulous contractors and attorneys take advantage of AOB agreements to milk insurers.

OIR demanded “granular” information about individual claims filed against the company, including claims numbers, locations of loss down to the zip code; policy limits; “house characteristics” including size, ownership status, year constructed, and age of the roof; and details of any AOBs, including the identities of any contractors and attorneys involved.

“Because of (Universal’s) position as the largest insurer of residential property in Florida, its data is among the most, or the most, comprehensive and robust compilation provided to OIR,” the complaint says.

The data “provides claims-level insight” into Universal’s internal procedures, “including but not limited to how it compensates claims counsel, how it handles water extraction/mitigation costs, how it negotiates claims in litigation, and how it manages its loss adjustment expenses.”

Moreover, the data would allow a competitor to identify AOB “hot spots” that could guide underwriting decisions. “Another carrier could use (Universal’s) data in conjunction with, or in lieu of, its own to evaluate where to write or not write policies.”

Additionally, third parties, including water-mitigation companies, could benefit from the data during negotiations with Universal, the complaint says: “Entering the requested injunction will serve the public interest.”

“… The Florida Legislature has found that the harm in disclosing trade secrets significantly outweighs any public benefit from disclosure and that the public’s ability to scrutinize and monitor agency action is not hampered by nondisclosure of trade secrets.”

The lawsuit seeks a judicial declaration that the info it provided to the insurance office is secret and exempt from disclosure, and an injunction barring the office from releasing the information.

Citizens Insurance board OK’s $1 billion-plus reinsurance plan

Citizens Property Insurance Corp. will transfer $1.42 billion in risk to the reinsurance and capital markets — a move its leadership said would leave it with reserves sufficient to cover a major storm.

The policy, adopted unanimously during a telephone conference call of Citizens’ board of governors, “will allow us to face the upcoming wind season for the fourth consecutive year with no potential assessment risk in a one-in-100-year storm,” chairman Christopher Gardner said.

Notwithstanding $1.8 billion in losses to Hurricane Irma, a “substantial surplus has been accumulated in all accounts to pay for future claims,” according to an executive summary of the plan.

Citizens, Florida’s property insurer of last resort, has been transferring risk during recent years to a variety of third parties, including the Florida Hurricane Catastrophe Fund, traditional reinsurance providers, and the capital markets.

The amount includes $480 million in risk capacity left over from 2017.

“This in turn also provides for additional claims paying resources in the event that multiple hurricanes strike Florida. Citizens’ private reinsurance programs are structured to also provide liquidity to Citizens by allowing Citizens to obtain reinsurance recoveries in advance of the payment of claims after a triggering event,” the document says.

“Over the last six years, Citizens executed a total of $3.1 billion of multi-year, collateralized reinsurance placements in the capital markets with Everglades Re. These placements not only provided an overall reduction in the pricing of reinsurance programs but also enabled Citizens to expand the diversity of reinsurance sources and reach new market participants,” it adds.

State law requires Citizens to pass the hat among its policyholders if it is unable to pay losses arising from covered property.

Customers clamor for ‘undergrounding’ during PSC storm-hardening workshop

Large electric customers and local governments complained about communications meltdowns and urged large-scale “undergrounding” of Florida’s electric infrastructure during the second day of Public Service Commission workshops about hurricane preparedness and restoration.

Public Counsel J.R. Kelly seconded the motion regarding the communications problems during and following Hurricane Irma, when customer calls crashed utilities public information switchboards and websites. Many of those customers were holed up in hotels hundreds of miles from home.

“There were some instances when customers were told, ‘Yes, your power’s back on.’ They checked out of their hotel only to find out that their power had never been back on. At that point in time, they were stranded,” Kelly told members of the PSC.

The workshops opened on Wednesday, when executives from publicly owned utilities testified about their preparations and responses to recent major hurricanes, including Irma, which inflicted damage widely up and down the state. They conceded the communications breakdown and said the problems have been fixed.

The next step is for the PSC staff to draft recommendations that the commission will take up on June 19.

Kelly had no specific remedies to offer Thursday, although he was working on them.

“Do the benefits exceed the costs — that’s the key,” he said.

The conversation centered on the difficulty in deciding how best to hedge the state’s resources against an uncertain risk, given that there’s no way to know when storms will hit, at what strength, in what numbers.

As Commissioner Donald Polmann put it: do we sink more money into repairing that old beater, or do we invest in a new Tesla? The answer requires weighing any number of hypothetical possibilities, he said.

“We’re struggling with that,” Polmann said. “It’s a very difficult thing. We’re working hard to figure out what to do.”

Following the workshop, Kelly emphasized that ratepayers have been paying to harden the grid against storms since 2006, including replacing wooden poles with sturdier stuff like concrete or steel, plus preemptive tree trimming.

The PSC lets utility companies maintain reserve funds to repair damage from storms above usual wear and tear. They have to justify this spending to the PSC, he added. In fact, hearings arising from Hurricane Matthew are scheduled in about three weeks, and the PSC will look into Irma spending later this year.

Kelly wants to make sure the money is spent wisely. “I don’t want to see their rates go up without some very solid, valid reasons to do so,” he said.

In the past, Kelly’s office has negotiated rate settlements allowing utilities to assess surcharges following big storms, subject to review and possible rebates depending on whether that spending was justified.

“In Matthew, we believe there may be some money refunded. But it will depend on the final determination made by the commission,” he said.

To Dunedin Mayor Julie Ward Bujalski, the attractions of undergrounding are patent. Her city saw extensive damage to trees and power infrastructure in Irma, with many of its Duke Energy customers going without electricity for six days.

City leaders believe strongly enough to have invested community redevelopment money to bury its downtown power infrastructure.

“Common sense tells you that as a system is getting older, you need to get to new technology and new ways of doing things. That’s what undergrounding is,” she said.

“Yes, it’s going to be expensive initially,” she conceded.

But then: “Maintenance will be less — that’s a cost savings. Vegetation trimming will be less — that’s a cost savings. I’m sure there are many other pieces to that puzzle — probably, updated technology able to isolate where a problem is. Less cost in the future.”

Jon Moyle, representing the Florida Industrial Power Users Group, agreed that communications and undergrounding are important considerations.

“I don’t know that undergrounding necessarily solves all the problems,” he said. “There are problems associated with undergrounding that include flooding, that include tree root growth impinging upon undergrounding. When you do have a problem, it’s harder to fix. You may not have as frequent of issues but, when you do, it’s a challenge.”

Scheff Wright, a Tallahassee attorney representing the Florida Retail Federation, tended to agree that money spent burying power cables is money not spent on trimming vegetation. He represents a number of municipal governments that are going underground.

“It’s facially obvious. It makes it more reliable, because you don’t have touch outages and you don’t have vegetation-caused outages,” he said. Especially considering that elevated lines can suffer damage from debris tossed by the wind from areas outside the right of way where utilities are expected to trim.

“If you did it and you didn’t have another storm for 40 years, you would look back and say, ‘No, that was not a cost-effective decision.’ But if a city that makes that investment and suffers a direct hit, they will have more than paid for everything in one storm. In year two, they will have really saved a lot of money.”

This, to Bujalski, was the bottom line.

“Undergounding shouldn’t be polarizing,” she said. “We know it’s the right thing to do. It’s how do we it effectively, efficiently, over a period of time where it’s not going to kill anyone financially.”

trauma centers

Lack of Medicaid expansion hurts Florida in national health care rankings

Thank God for Mississippi. And Oklahoma and Louisiana. Those are the only states that fared worse than Florida on a national health care survey released Thursday.

Florida ranked No. 48 overall among the 50 states and District of Columbia on The Commonwealth Fund’s 2018 Scorecard on State Health System Performance. Among categories, the state ranked No. 49 for access and affordability; prevention and treatment; avoidable hospital use and cost; and providing equal access to health care.

The state improved in more areas than not. The number of uninsured adults and children declined. Fewer adults went without care because of cost. More home health care patients were up and walking. More mentally ill adults found treatment. Fewer breast cancer patients died.

But many areas saw no improvement. Or are getting worse. For example, the hospital 30-day mortality rate. More adults smoked, were obese, lost six or more teeth or reported only fair or poor health. In other areas, the state held steady.

“Florida is one of the states that has not expanded Medicaid,” Sara Collins, vice president for health care coverage and access, said during a conference call. “States that expanded their Medicaid programs had much larger drops in their uninsured rates than states that didn’t. Florida is very much in that category.”

Fund President David Blumenthal outlined the national trends.

“While the 2018 State Scorecard provides some good news about the direction we’re heading, we do continue to see wide disparities between states. Also of concern are some areas where we see no progress or even reversal of positive trends,” he said.

Life expectancy has fallen, largely because of the opioid crisis, and premature deaths from preventable or treatable causes are increasing in many states. Obesity rates are on the rise, too, he said.

The Affordable Care Act is behind much of the improvement. “But these gains may be at risk,” Blumenthal said. Tracking data show an increase in the uninsured rate among working-age adults, from 12.7 percent in 2016 to 15.5 percent in 2018.

“Recent administration policies such as repeal of the individual mandate penalty and promotion of plans that do not comply with ACA rules could accelerate this trend,” Blumenthal said. These potential setbacks remind us that holding on to gains made, and addressing new problems that arise, will take concerted efforts on the part of federal, state, and local policymakers, the public, and private health care sectors.”

The organization is a private foundation dedicated to improving access, quality, and efficiency in the health care system. It has released its annual scorecards since 2006. The report compared 43 measures of performance for every state.

In addition to the findings on premature deaths and the ACA, researchers found that many states are not getting good value for their health care dollars, in the form of mental health care gaps and delivery of high-cost services that provide little benefit to patients.

Among other findings, the highest and lowest ranked states — Hawaii and Mississippi, respectively — stood out among even similarly ranked states. Oregon made the biggest jump in its ranking — 10 spots.

“It’s worth noting that eight of the 10 top-ranked states expanded their Medicaid programs under the Affordable Care Act, while seven of the 10 bottom-ranked states did not,” senior scientist David Radley said.

PSC examines progress of storm-hardening Florida’s electricity grid

Among the most significant obstacles to strengthening Florida’s electric transmission grid against hurricanes is a lack of access to telephone poles. Utilities rely on thousands of poles statewide that they don’t control.

Other obstacles include trimming trees that might fall onto transmission lines.

Complaints about those problems featured prominently during Florida Public Service Commission hearings on hurricane preparedness and response in Tallahassee Wednesday.

Fully 200,000 of the 1.2 million utility poles Florida Power & Light relies upon are owned by telecommunications companies, Bryan Olnick, vice president for distribution and reliability, told the commission.

“They are very much a weak link in our system,” he said.

Yet they form an essential part of the electric infrastructure. FPL inspects all of its poles on an eight-year cycle. “Telephone utility poles to do not. The suggestion is that, since they are part of our system, they also comply with whatever the electric utility standards are. Because pole inspections make a big difference,” Olnick said.

No one — neither the utilities nor commission members — was certain who precisely regulates these poles, however.

Meanwhile, homeowners and local governments don’t always cooperate with tree-trimming efforts, Olnick and other utility executives said.

Commissioner Gary Clark suggested the state might need to pre-empt local governments on the matter. “You’re dealing with 20 different municipalities that have 20 different sets of rules,” he said. “This is for the benefit of everybody that is on this line — we are going to clear this.”

Public and investor-owned utilities sent executives to address the commission, which has emphasized storm hardening since 2006. The push includes regular inspections; infrastructure hardening, including replacing wooden poles with sturdier models, steel or concrete; closer coordination with local governments; collecting and analyzing data during and after storms; and moving equipment underground.

According to testimony by Olnick and other executives, the effort is paying off. For example, following Matthew, FPL restored 95 percent of its customers within two days; following Irma, it was 50 percent within one day. During Wilma, it took five days to restore 50 percent.

Hardened infrastructure performed significantly better than nonhardened. During Matthew, no hardened power poles failed. During Irma, only 26 failed. For nonhardened, 408 poles failed during Matthew and 2,834 during Irma. Not one hardened transmission structure failed during either hurricane.

Underground infrastructure performed 95 percent better than aboveground during Matthew, and 80 percent better during Irma, he said.

But it is no panacea. FPL saw damage to its underground infrastructure during recent storms because felled tree roots damaged equipment, Olnick said.

Court opines on workers’ comp, actors’ payroll firm

An appellate court has rejected attempts by Florida’s last-chance workers’ compensation insurer to deny coverage to a company that manages payrolls for “talent” in the movie, television, and radio commercial industries.

The Florida Workers’ Compensation Joint Underwriting Association Inc. had twice sought to deny coverage to American Residuals and Talent Inc., or ART, arguing that the company was a mere payroll service.

The 1st District Court of Appeal, in a unanimous three-judge opinion issued Monday by Judge Thomas Winokur, sided with the Florida Division of Business and Professional Regulation, which had decided that the company was entitled to buy coverage.

The panel rejected the insurer’s argument that that outcome would upend the workers’ compensation market.

“DBPR investigated ART twice and found that ART did not operate as an unlicensed employee leasing company,” Winokur wrote.

“Companies that lease their employees to its clients will still be required to obtain licensure pursuant to Florida law,” he wrote. “In addition, this ruling does not exempt ART from any applicable licensure requirements if it changes its operating practices.”

ART, based in New Hampshire, doesn’t interview, hire, or fire the actors and others it connects with production companies, the court said. However, it pays the talent; makes sure clients obey local and federal labor regulations and union rules; and tracks residual payments owed.

In addition, ART’s contracts with clients hold that it is the “employer of record,” the court said.

“(The insurer’s) argument is not that ART is not an employer, but rather based on the distinction between ‘direct’ and ‘indirect’ employers. This distinction, however, is nowhere to be found in Florida law or, for that matter, (the insurer’s) Operations Manual.”

The court swept aside the insurer’s fears that the outcome could require it to sell to companies that merely process other employers’ payrolls.

“ART does more than just the ministerial function of issuing paychecks to its client’s employees. ART operates as the employer of record for the talent,” Winokur wrote.

“ART assumes an employer’s responsibility of paying talent and ensuring that they are provided with the insurance required under the law of the jurisdiction where they are employed, while its clients handle the creative aspect of interviewing and hiring the right talent for its productions.”

The opinion describes the association as “a self-funding, residual-market insurer created by the Legislature in order to provide workers’ compensation insurance to employers who are statutorily required to maintain such insurance, but who are unable to obtain coverage from private insurers in the voluntary market.”

Court rejects Keys residents’ challenge to Citizens rates

An appellate court has rejected a community group’s challenge to premium levels for Citizens Property Insurance Corp. customers in Monroe County.

State law provides no avenue for the formal administrative challenge sought by Fair Insurance Rates in Monroe Inc., a unanimous three-judge panel of the 1st District Court of Appeal in Tallahassee concluded on Monday.

The suit named the Office of Insurance Regulation, and involved rates for Citizens policyholders that regulators OK’d effective on Feb. 1, 2017 — over complaints by Monroe County property owners that they drew upon unreasonably pessimistic calculations of the potential risk there.

“We conclude that (the Insurance Code) does not contemplate administrative review by Citizens’ policyholders of final rate orders,” the court said in an opinion by Chief Judge Bradford Thomas.

The code allows challenges when regulators issue a notice of intention to approve insurance rates, the court said. But the Legislature eliminated that opportunity for Citizens policies in 2007. Indeed, lawmakers eliminated Citizens’ standing to appeal final rate orders.

“We conclude that the plain text of (code) is not clear and unambiguous in regard to whether a Citizens policyholder can seek administrative review of a final order establishing rates,” Thomas wrote.

“However, in light of the statutory framework under which Citizens operates and the fact that a ‘final order’ signifies the conclusion — not the start — of the administrative process, we hold that appellant was precluded from seeking review of the final orders establishing Citizens’ rates.”

In a rate order published on Sept. 16, 2016, the insurance office conceded that loss projection models for the Florida Keys diverged widely, but said the rates should take effect pending a study of the situation.

“OIR is pleased with this ruling and looks forward to continuing to work with FIRM and other stakeholder groups in Monroe County and across the state of Florida to find solutions that lower property insurance rates,” Insurance Commissioner David Altmaier said in a written statement.

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