Westmont Wire

On May 8, the California Court of Appeals upheld a $27.5 million fine against Mercury Insurance, the largest penalty ever assessed by the California Department of Insurance. Mercury Insurance received the fine in 2015 for charging its automobile insurance customers unapproved fees of $50 to $150 on top of Mercury’s approved rates from September, 1999 to August, 2004, in violation of Proposition 103. The Department of Insurance imposed a penalty of $150 for each violation from September 8, 1999 to August of 2004. The Court of Appeals ruled that Mercury’s brokers were acting as agents, thus requiring their fees to be part of the premium. The decision overturns a 2016 Orange County Superior Court decision that ruled to strike the fine.

For any questions about the California Court of Appeals decision, or for inquiries regarding compliant premium payment strategies, please contact Westmont Associates.

On May 6, 2019, the Florida Senate passed House Bill 301 in an effort to modernize Florida’s surplus lines requirements. Awaiting final approval by the Governor, the bill removes the $35 cap on surplus lines agent policy fees and increases the loss adjustment expense reimbursement from 5% to 10% of reimbursed losses. The bill also removes the notarization requirement for workers’ compensation applicants’ and agents’ sworn statements as well as cutting some paperwork requirements by permitting certain electronic filings. Finally, the bill reduces the number of required declinations on homes valued between $700,000 and $1 million from three to one. After passing through the House of Representatives with a 114-0 vote and the Senate with a 37-1 vote, Governor DeSantis is expected to approve HB 301.

For any questions regarding House Bill 301, or for surplus lines regulatory inquiries, please contact Westmont Associates, Inc.

As a follow up to last week’s Wire regarding a Florida bill reforming existing assignment of benefits (“AOB”) laws, the Florida Senate passed House Bill 7065. On April 24, 2019, the Senate approved the bill and sent it to Governor Ron DeSantis’ desk for his signature.

HB 7065 allows insurers to offer residential or commercial property or automobile insurance policies with restrictions on the AOB, in whole or in part. The AOB reformations contained in the Bill are intended to slow down the vast increase in the filing of AOB cases throughout Florida.

For any questions regarding House Bill 7065, or for updates on the bill’s progress, please contact Westmont Associates, Inc