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FMG Law Blog Line

Private Passenger Auto Rates

Posted on: December 15th, 2017

By: Allan J. Hayes

car-lot[1]A lobbyists job in never done. Like the tides of the ocean, politics has an ebb and flow. Issues go through a cycle effected not by the moon’s gravitational pull but by the nature of America’s form of governance. Government is influenced by public opinion, economic conditions, media scrutiny, bureaucrats, politicians and yes, by lobbyists. All of these influences change and evolve over time.

A good example of this cycle is rates for private passenger auto insurance in Georgia. After rates skyrocketed in the late 1980s, the Georgia legislature changed state law so that the Insurance Commissioner had to approve increases proposed by insurance companies. This system is referred to as “prior authorization.” The auto insurance industry instructed its lobbyists at the Capitol to try and change the law back to a “file and use” system.

In 2008 insurance company lobbyists managed to pass SB 276 which returned Georgia to a file and use rate system. Section 3 of the bill stated that “No rate shall be held to be excessive unless such rate is unreasonably high for the insurance provided and a reasonable degree of competition does not exist in the area with respect to the classification to which such rate is applicable; provided, however, with respect to rate filings involving an increase in rates, no rate for personal private passenger motor vehicle insurance shall be held to be excessive unless such rate is unreasonably high for the insurance provided and a reasonable degree of competition does not exist.” This language allows companies to implement new rates without prior review and the insurance commissioner cannot hold the rates excessive as long as there is competition. The industries argument was that if you let free-market principles take effect, competition will drive auto insurance rates down. At that time, in that political and economic environment, it was a winning argument.

But wait. When the Georgia House Insurance Committee held an early session hearing on January 11, 2017 regarding premiums of private passenger auto insurance it brought unwelcome scrutiny for the property and casualty industry. Dr. Robert P. Hartwig, Special Consultant to the Insurance Information Institute was brought in by industry lobbyists to speak to the committee regarding the rising frequency and severity of auto accident claims. It seems that competition was not able to keep auto insurance rates from rising due to these “environmental factors.”

The Atlanta Journal-Constitution has posted five stories on the issue since July. According to the AJC, Georgia has ranked either first or second nationally for auto insurance rate increases in the last four years. All while having over 200 insurance companies competing in Georgia. Steve Manders, Director of Insurance Product Review for the DOI, addressed the committee in January to highlight some issues the department wants to address with this current file and use system. The department would like to see the auto rate filing system conform to a 45 day waiting period on new rate implementation so the DOI can review the rates for compliance. It also would like to define the term “excessive” to give the department the authority to roll back rates. The hearing room was full of lobbyists representing the individual P&C insurance companies, insurance agents’ groups, the insurance companies’ associations, consumer groups, and the insurance department. Like I said, a lobbyists job is never done.

If you have any questions or would like more information, please contact Allan Hayes at [email protected].

Employer Notification to Disseminate Updated Sexual Harassment Brochure or Poster to California Employees

Posted on: December 11th, 2017

By: Elizabeth G. Fellmeth

On April 1, 2016, stronger discrimination and harassment regulations under the Fair Employment and Housing Act (“FEHA”) took effect. In addition to distributing California’s Department of Fair Employment and Housing (“DFEH”) brochure on sexual harassment (DFEH-185), the new regulations require employers to prepare and disseminate their own harassment, discrimination, and retaliation prevention policy.  A summary of the new FEHA regulations can be found here.  The DFEH also issued a workplace harassment guide for employers found here, which provides recommendations for implementing an effective anti-harassment program.

While employers may have spent the last year implementing the new regulations, the DFEH recently issued an updated DFEH-185 brochure replacing the earlier version (found here in English and here in Spanish).  The new brochure is also available in a printable poster format (found here in English and here in Spanish).

State law requires employers to disseminate the new information to their employees.  Employers can fulfil their obligations by providing new hire and current employees with a hardcopy or email copy of the updated brochure or new poster.  To ensure receipt of the brochure or poster, employers should include an acknowledgment form for employees to sign and return.

If you would like more information or have any questions, please contact Elizabeth Fellmeth at [email protected].

Will the Las Vegas Tragedy Change the Hospitality Industry?

Posted on: December 8th, 2017

By: America Vidana

Hundreds of victims of the 10/1/2017 mass shooting in Las Vegas have filed several suits in both, California and Nevada courts against Mandalay Bay, MGM Resorts and LiveNation. The victims accused the hotel operator MGM Resorts International and its subsidiary Mandalay Corp, which owns the hotel, of failing to properly monitor the shooter’s activities, train staff members and employ adequate security measures.

Additionally, the lawsuits accused the concert promoter, LiveNation, and the concert venue owner, also MGM, of failing to design, build or mark adequate emergency exits and to properly train and supervise employees in an appropriate plan of action in case of an emergency.

In order to prevail in such cases, a plaintiff must prove that the premises operators were negligent and the incident was reasonably foreseeable. Given the instant facts and the history of lawsuits following mass shootings, this will be an uphill battle for the victims unless they can show Mandalay Bay, MGM Resorts and LiveNation were careless and could have done more to prevent the shooting.

The shooter, 64 year-old Stephen Paddock, was a retired multi-millionaire, who invested in real estate, gambled for fun and had no criminal antecedents. He reportedly was a “high-roller,” who was well-known in the gambling world and frequented casinos such as Mandalay Bay, for weeks at a time. By all means, the shooter did not display any unusual or suspicious behavior that may have alerted Mandalay Bay security of a potential threat to safety.

Arguments have been made that Mandalay Bay security should have been more vigilant of the 23 legally-purchased guns, including high-caliber assault weapons, the shooter took to his room over the course of three days, or alternatively, that some inspection procedure, whether metal detectors or bag checks, should have been in place to detect such weapons. While Mandalay Bay in addition to every major Las Vegas casino spends hundreds of thousands of dollars yearly to catch illegal gamblers, it somehow failed to detect the plethora of artillery being transported through its casino floor. The shooter reportedly also installed cameras in the hallways, and declined room service for several days—bringing into question Mandalay Bay’s policies regarding room service and duration between checking a guest’s room.

Even more damaging to Mandalay Bay, a security guard was allegedly shot several minutes before the mass shooting ensued. Strangely, there was a six-minute lapse in Mandalay Bar’s response time from the initial shooting of the guard to the actual mass shooting. This will likely be one of the bigger issues MGM will face, as this arguably should have provided notice of the danger, and plausibly provided a reasonable opportunity to minimize, if not prevent the casualties.

However, the litigation trail following mass shootings have largely favored the establishment. Notably, in a similar suit arising out of the Aurora, Colorado theater mass shooting at a showing of The Dark Knight Returns, the court dismissed claims of those injured against the theater because the crime was not foreseeable at the time and because the crime was an intervening and superseding cause of the harm. While not directly applicable in the 9th Circuit, the court’s rationale and legal principles will surely be persuasive. But being the first such presentation of a case against the hospitality juggernaut, the court’s decision could set new precedent on industry standards for safety and emergency response.

For further information or for further inquiries involving hospitality law, you may contact America Vidana of Freeman Mathis & Gary, LLP, at [email protected].

Trends and the Economic Impact Involving Workplace Injuries

Posted on: December 6th, 2017

By: Jac O’Delle E. Wright

Employers, agents, brokers and insurers have every reason to keep up-to-date regarding trends and the economic impact involving workplace injuries.  Because of frequent changes, including those involving workers’ compensation legislation and case law, safety management programs and training, as well as indemnity and medical costs, it is important to consider the inclusion of reliable, actuarily-based reports into business plan models.

In California, the premier provider of this information is the Workers’ Compensation Insurance Rating Bureau (WCIRB) that tracks, among other things, projected loss and expense ratios, benefit rates, duration and nature of claims, renewal percentages, retrospective rating plans, hazard group severity multipliers, average returns on net worth, cost exposure pertaining to prescription medications and liens, and comparisons with other states.

The WCIRB is also tracking the long-term impact of State Senate Bill 863 reforms that primarily resulted from negotiations between employers and labor unions, with several provisions effective January 1, 2013 and beyond. Some of the objectives and impact of California’s legislation were to increase benefits for injured workers and, contemporaneously, address and/or limit the rising costs of medical treatment and related costs to employers in part, through the implementation of a Medical Provider Network program and a Utilization Review appeal process.

Similar information to that provided by the WCIRB for other states can also be viewed, including for the following locations:

Florida-National Council on Compensation Insurance (NCCI Holdings, Inc.);

Georgia -National Council on Compensation Insurance (NCCI Holdings, Inc.);

New York Compensation Insurance Rating Board;

New Jersey Compensation Rating & Inspection Bureau;

North Carolina Rate Bureau;

Pennsylvania Compensation Rating Bureau (PCRB)

It is of primary importance to correlate these industry costs and trends with the practical and legal implications as applicable to each individual employment circumstance. For further information, contact our local counsel at Freeman Mathis & Gary LLP, and, for California, contact Jac O’Delle E. Wright at [email protected].

The Entrepreneurs Parole Visa – Full Steam Ahead – For Now

Posted on: December 4th, 2017

By: Kenneth S. Levine

On 12/1/2017 a Federal Judge ruled that the Department of Homeland Security did not have legal cause to delay the enactment of a visa program for foreign entrepreneurs. The program, referred to as the “International Entrepreneur Rule,” was supposed to have gone into effect on 07/17/2017.

On 7/10/2017 the current presidential administration announced a delay in the program until March 2018. As FMG predicted back in July 2017, litigation immediately ensued, and the Federal Court did in fact determine that the rule delay was unlawful because it failed to comply with the APA (Administrative Procedures Act).

The Court’s decision mandates that the U.S. Citizenship and Immigration Services must immediately begin accepting applications under this program. Applicants may be “paroled” (i.e., admitted) into the U.S. to run their own business if they can show at least $250,000 of investment capital from established, reputable investors.

It is anticipated that the current presidential administration will seek to enact a complete withdrawal of the program through the APA’s formal rule making process. While a complete withdrawal would likely take 1-2 years, it is unknown whether the current administration will be able to legally halt the program through the judicial appeals process. Accordingly, FMG Immigration Attorneys urge those interested in applying for the program to do so promptly.

For additional information related to this topic and for advice regarding how to navigate U.S. immigration laws you may contact Kenneth S. Levine of the law firm of Freeman, Mathis & Gary, LLP at (770-551-2700) or [email protected].