NRRA Accelerates Its Campaign Opposing Illegal Discrimination Activities Against RRGs
Full opposition is now posed to the Florida Department of Transportation (DOT).
Following the conclusion of the 2023 Florida Legislative Session on May 5th, which ended without passage of Senate Bill 516, no time is being wasted waiting to see when the previously ill-conceived legislative phoenix might rise from the ashes there.
As previously reported, NRRA’s motivation on this front here is that other entities within the state continue to rely on the Florida Office of Insurance Regulation’s (FOIR) “Pop-up” Notice in order to seriously prevent RRG members trying to do business in the state.
This case also shows that larger RRGs are no less immune from discrimination than the smaller ones! This train coming down the tracks can be tracked in real time; we can clearly see the headlight.
What we have learned from Phase One of our Campaign is that the FOIR has taken no steps to alert its own institutional constituents (e.g., other state agencies or public entities) that its Pop-up is actually causing them to violate federal law! In this enews blast, we report on how the Florida Department of Transportation (FDOT) is a prime example, and how Florida’s Pasco Town Center serves as this week’s anecdotal case study.
At the root of all of these problems lies the FOIR’s ubiquitous Pop-up itself. Any person or entity doing their due diligence in researching on its website the liability insurance coverage for any business entity insured by an RRG will see a legally incorrect and unnecessarily negative and prejudicial notice from the FOIR stating that RRGs are “not authorized” to write liability insurance in the State of Florida.
In begrudgingly conceding that, although the federal law inexplicably allows them to operate, since they (RRGs) are not “chartered” in Florida the state “guaranty fund” is not available in the event of insolvency. This notice is not merely a superficially inept attempt at truth! It is clearly designed to turn business and governmental entities away from RRGs based upon the FOIR’s overarching false “spin” that RRGs are somehow financially unreliable, and, otherwise steer them in the direction of the traditional carriers.
Our perfect anecdote of the week is the case involving Pasco Town Center:
Built Right Construction Company (Built Right – – i.e., fictitious name used at request of the victim here) is a successful contractor in Florida which bid on a large construction project for Pasco, a Florida municipality. In replying to the proposal, however, Pasco’s risk manager categorically rejected Built Right’s insurance with the following statements (elipted for ease of reading):
“… Pasco County Risk Management is denying approval of your insurance… The American Contractors Insurance Co. Risk Retention Group (ACIC) “is not an insurance carrier” and “is not admitted in Florida.” Risk cannot approve this COI (certificate of insurance) and would not recommend allowing a project with the risk retention group going forward…” (Emphasis added.)
Attached to this email was a print-out from some unknown source containing the exact verbiage of the Pop-up. ACIC, by the way, has an A.M. Best rating of “A” (A.M. Best’s second highest rating) with a financial strength designation of “viii” (meaning between $100M-$250 Million in capital surplus) which is also reported on the same print-out. Obviously, there should be no doubt but that the FOIR’s Pop-up is the one and only cause of the rejection of this contractor’s RRG-issued insurance for a very large construction project.
As shared in our earlier newsletters, one of the seminal planks of Phase Two of NRRA’s current Campaign is the need to address the fact that, at least in Florida, the FOIR does not appear to be enforcing its own Pop-up directly, but rather is encouraging other state agencies and municipalities to do its “dirty work,” causing them to be the ones to violate federal law, and be subject to potential legal liability.
Our prime target example this week is the Florida Department of Transportation (FDOT). So connecting the dots for the reader here, the specific “connection” in this case is that a number of prior orders and directives undertaken by FDOT were the motivation and impetus behind Fla H57 and SB516 (the Bill.)
Click here to now read NRRA’s Letter to FDOT of May 24, 2023, including enclosures, for our in-depth analysis and comprehensive summary as to how and why the FDOT is in direct violation of the Liability Risk Retention Act (LRRA) and is inexplicably doing so evidently as a front for the FOIR.
All risk retention groups need to join this campaign (click here), especially all of the 140 RRGs registered in Florida, facing the disastrous potential of illegal or discriminatory legislation or other state orders that threaten to regulate your business or otherwise discriminate against you, as exemplified by the saga of the 2023 Florida Legislative session where H57 & SB516 had been pursued for its second year in a row.
We are now well into “Phase 2” of our fundraising campaign to actually oppose and defeat discriminatory legislation or other conduct directed at risk retention groups, not just in Florida, but wherever else they may appear. This is now your opportunity to step up and help us move forward with this initiative. See all of our recent enews blasts on the development of this initiative by clicking riskretention.org.
This campaign is designed to do what probably should have been started thirty years ago. It is a major undertaking, however, as it has to be accomplished in steps, and we need everyone’s help to move it forward. On behalf of all of our purpose-driven RRGs out there, helping all small to large businesses to survive today’s challenging insurance market, we urge you to join now and support your industry. Thank you.
For inquiries, contact: Joseph E. Deems, NRRA Executive Director
16133 Ventura Blvd., Suite 1055, Encino, CA 91436, U.S.A.
(818) 995-3274 | joe@riskretention.org