On Oct. 12, 2017, President Trump signed an executive order intended to change certain rules under the ACA, expanding access to association health plans, health reimbursement arrangements (HRAs) and short-term, limited-duration insurance. The executive order does not make any changes to existing regulations, but directs federal agencies to consider new regulations or guidance to implement the order’s policies. This Health Care Bulletin provides an overview of the executive order.  Click the attached document to continue reading…

President Signs Executive Order Designed to Change ACA Rules

On Oct. 12, 2017, the White House announced that it will no longer reimburse insurers for cost-sharing reductions made available to low-income individuals through the Exchanges under the Affordable Care Act (ACA), effective immediately. Because Congress did not pass an appropriation for this expense, the Trump administration has taken the position that it cannot lawfully make the cost-sharing reduction payments.

This decision follows the U.S. House of Representatives’ position in a lawsuit it filed against the Obama administration in 2014 challenging the federal government’s authority to fund these cost-sharing reductions. Click the attached document to continue reading…

White House Announces ACA Subsidies Will End 10-13-17

House eyes workers’ compensation fee cap

By The News Service of Florida

TALLAHASSEE, Fla. – Fees for attorneys who represent claimants in workers’ compensation insurance cases would be capped at $150 an hour under a bill the Florida House considered Thursday.

Insurance & Banking Chairman Danny Burgess, a Zephyrhills Republican who is sponsoring the bill (HB 7009), told House members that the measure would help stave off workers’ compensation premium increases that, he said, will result in the next two years as a result of Florida Supreme Court opinions.

Related Headlines
Legal fees increase in workers’ comp system
Businesses to get workers’ comp rate cut
Workers’ compensation rate cut eyed
“We have an opportunity to be proactive,” Burgess said Thursday. “The crisis is still there.”

Business groups last year lobbied the Legislature to pass a workers’ compensation bill, arguing that premiums would otherwise increase because of a Supreme Court ruling that threw out strict caps on claimants’ attorney fees.

Lawmakers didn’t pass a workers’ compensation bill, though, and premiums didn’t go up.

Insurance Commissioner David Altmaier in November approved a final order lowering premiums by nearly 10 percent.

“The case made to us was a classic, sky is falling,” Rep Sean Shaw, D-Tampa, said, reflecting on the 2017 session and the push to act.

But Burgess said the nearly 10 percent reduction was the residual effect of sweeping changes the Legislature made to the workers’ compensation system in 2003.

Despite the reduction approved in 2017, Burgess reminded lawmakers that Altmaier approved a 14.5 percent increase in 2016.

Moreover, he said a recent Judge of Compensation Claims report on attorney fees showed that more than $75 million in hourly fees were approved for claimants’ attorneys in 2016-2017, a nearly 200 percent increase from the $25.8 million in hourly fees that were approved the previous year.

The House is slated to vote on the bill Friday

AmTrust Financial Services, Inc. Announces Formation of Special Committee to Review Proposal by Stone Point Capital, the CEO and the Karfunkel Family

Jan. 10, 2018, 08:30 AM

NEW YORK, Jan. 10, 2018 (GLOBE NEWSWIRE) — AmTrust Financial Services,Inc. (Nasdaq:AFSI) (the “Company” or “AmTrust”), announced that its board of directors appointed a special committee to consider the January 9, 2018, proposal from private equity funds managed by Stone Point Capital LLC, together with Barry D. Zyskind, Chairman and CEO of AmTrust, George Karfunkel and Leah Karfunkel (collectively, the “Karfunkel-Zyskind Family”), to acquire all of the outstanding shares of common stock of AmTrust that the Karfunkel-Zyskind Family does not already own or control for $12.25 per share in cash.

The special committee is composed of the following AmTrust directors: Donald T. DeCarlo, Susan C. Fisch, Abraham Gulkowitz and Raul Rivera. Mr. DeCarlo will serve as the chair of the special committee. AmTrust will not move forward with any transaction unless it is approved by the special committee. Any transaction would be subject to a non-waivable condition requiring the approval of a majority of the shares of the Company not owned or controlled by the Karfunkel-Zyskind Family, senior management or their respective affiliates.

Willkie Farr & Gallagher LLP will serve as the independent legal advisor to the special committee to assist in its review of the proposed transaction.

AmTrust Weighs Going Private with Stone Point Capital, CEO Zyskind

By Mark Hollmer | January 10, 2018


Stone Point Capital Partners, along with AmTrust Chairman and CEO Barry Zyskind and Director George Karfunkel (and his wife, Leah Karfunkel), have proposed to acquire all outstanding shares of AmTrust that they don’t already own.

A spokesperson confirmed that the bid, if accepted by the AmTrust board of directors and approved by shareholders, would take the New York-based multinational property/casualty insurer private.

The Karfunkel-Zyskind family owns or controls about 43 percent of outstanding shares of AmTrust common stock. They propose paying $12.25 per share for the rest of the company, a nearly 21 percent premium over AmTrust’s closing stock price on Jan. 8, 2018.

According to the announcement of the proposed share purchase, the idea behind the bid to take AmTrust private is designed, in part, to allow the carrier “to focus on the long term without the emphasis on short-term results.”

Expectations are that a special committee of independent AmTrust directors will consider the proposed transaction and then make a recommendation to the full board. Plans involve the special committee hiring on independent legal and financial advisers to help review the proposed share purchase.

For AmTrust to go private, the special committee must approve the proposed share purchase and shareholders outside of the Karfunkel-Zyskind family must also sign off on the idea. If the bid to go private does not go forward, “the Karfunkel-Zyskind family intend to continue as long-term stockholders of AmTrust,” according to their announcement.

A Busy Period
A move to take AmTrust private would cap a tumultuous period for the company.

In March, AmTrust delayed its 2016 annual report by a few weeks so it could conduct an audit and restate financial statements for the year, along with related disclosures for 2014 and 2015. After attributing the delay to its former independent auditor BDO USA, the company said it boosted its internal financial controls and also created a chief accounting officer position.

The insurer also took a number of initiatives over the past year to stabilize itself, including raising $300 million in new capital from the Zyskind family and the sale of its personal lines policy management system to National General Holdings for $200 million. The company also plans to make about $950 million by selling a majority equity interest in some of its U.S.-based fee business to private equity firm Madison Dearborn partners.

For the 2017 third quarter, AmTrust lost $174.7 million, compared to $80.7 million in net income during the 2016 third quarter. The company’s combined ratio also reached 134.4 for the quarter, compared to 93.2 in Q3 2016. Part of the issue stemmed from hurricanes and other extreme weather events, though Zyskind at the time said AmTrust was continuing to focus on promoting longer-term stability, raising money and improving its balance sheet.

Amtrust Going Private

The Zyskind and Karfunkel families have decided to bring their shares in-house with the assistance of Stone Point Capital.  Quite frankly, they do not need the investors and are on a mission to take them all out with this transaction.

“The Karfunkel-Zyskind Family have informed AmTrust that they are interested only in acquiring the remaining shares of AmTrust common stock that they do not currently own or control, and have no interest in selling any of the shares they own or control, nor would they expect, in their capacity as stockholders, to vote in favor of any alternative sale, merger or similar transaction involving AmTrust. If the special committee does not recommend, or the stockholders of AmTrust do not approve, the proposed transaction, the Karfunkel-Zyskind Family intend to continue as long-term stockholders of AmTrust.”

It’s interesting to note that AmTrust’s share price rose to more than the offer price at a of $12.25, with shares currently being traded at $12.94.

Congrats to Amtrust on this move!


Editorial: Illinois’ population loss shows why change is needed

The recent revelation that Illinois experienced the largest population loss of any state between July 1, 2016, and July 1, 2017, barely registered as a ripple.

That’s scary.

That Illinois continues to lose residents is hardly news, and is barely surprising, because it’s been happening for years — drip by drip, day by day.

That’s scary, too.

Consider: The state lost about 33,700 residents, according to the recent U.S. Census Bureau report. That’s more than half of Normal’s population packing up and moving out — which, given the recent tundra-esque weather pattern, would be somewhat understandable.

All kidding aside, the cold is actually a probable factor in our net migration. The Chicago Tribune in 2016 surveyed former Illinois residents and found weather was one of the reasons they moved out — many, it seems, are not that fond of living through four distinct seasons.

Locally, we’re holding our own. McLean County’s population has stayed relatively stable over the last several years. It rose from 169,572, according to the 2010 census, to an estimated 174,777 in 2013, before settling at 172,418 in 2016, the last year for which data is available.

Illinois is mostly equal in meteorological measures to our neighboring states. But what those states don’t have are the formidable difficulties of Illinois. The Tribune survey identified high taxes, crime, unemployment and financial problems in Springfield as the other influences for residents hitting the road — borne out, in part, by social media comments on any story about Illinois’ sad financial state.

We worry about this situation accelerating. We can’t keep following the pattern and expect different results. Every other Midwestern state has seen population growth over the past seven years, but not us.

Illinois ranks No. 1 for outbound moves on the 41st annual National Movers Study conducted by moving company United Van Lines.

That’s not a No. 1 we want. (New Jersey, our sister in high taxes and nonfunctional state government, was No. 2.)

Such hemorrhaging eventually raises the prospect of Illinois losing a seat in Congress. Our population is now 12,802,023 — and we’ve lost the fifth-most populous state title to Pennsylvania.

When will it end?

Not before we make serious changes, and it starts with government. Illinois’ real estate taxes, income taxes, property taxes and workers’ compensation insurance rates are embarrassments, as is the hangover of the two-year budget impasse and rampant deficit spending. It simply costs too much to do business here, especially compared to neighboring states.

We’re looking forward to voters remembering these issues when Election Day rolls around in November.

Approved WC Legal Fees up 36 percent in 16-17, what will the 17-18 fiscal year look like?

Injured workers racked up nearly $186 million in approved legal fees in 2016-2017, a 36 percent increase from the previous year, a state report on the workers’ compensation insurance system shows.  This is with the Castellanos v. Next Door Company ruling, which repealed restrictive attorney fees caps, only being in place for 7 out of 12 month in the 16 -17 fiscal year.

In all, attorneys’ fees in the workers compensation system totaled nearly $440 million during the 2016-2017 fiscal year. The majority — nearly $254 million — were forked out by employers defending workers’ compensation claims.

Issued by the Office of the Judges of Compensation Claims, the 2016-2017 annual report notes that $185.6 million in approved legal fees for injured workers is the highest amount paid in nearly a decade and is attributable to a 2016 Florida Supreme Court ruling.

“Clearly, there is a trend suggested of increasing claimant attorneys’ fees in the wake of (the ruling),” the report, released last month, notes.

The report shows that in 2016-2017, more than $75 million in hourly fees were approved for claimants’ attorneys, a nearly 200 percent increase from the $25.8 million in hourly fees that were approved the previous year.

During the same period, the report shows that fees paid to workers’ compensation attorneys under legislatively approved fee caps decreased about 31 percent.

It is the second consecutive year that legal fees increased for injured workers and employers and reverses what had been a five-year trend of lower legal costs for both sides in workers’ compensation cases.

Workers’ compensation is a no-fault system meant to protect workers and employers. It is supposed to provide workers who are injured on the job access to medical benefits they need to be made whole. Those who are injured for at least eight days also are entitled to indemnity benefits, or lost wages. In exchange for providing those benefits, employers generally cannot be sued in court for causing injuries.

While the system is supposed to be self-executing, injured workers hire attorneys when there are disputes over the amounts of benefits they should receive.

Florida businesses faced some of the highest workers’ compensation costs in the country in the early 2000s. Business interests argued that attorney involvement — legal fees in the aggregate totaled $427 million in fiscal year 2002-2003 — was the reason for the high costs.

The Legislature responded by passing a sweeping rewrite of the workers’ compensation system in 2003 that, among other things, tied the recovery of plaintiff attorneys’ fees to percentages of the amount of recovered benefits. The law was tweaked in 2009 to make clear that workers’ compensation judges were precluded from awarding additional hourly fees for plaintiffs’ attorneys.

But in a 2016 ruling known as Castellanos v. Next Door Company, the Florida Supreme Court ruled that the restrictive fee caps violated injured workers’ due process rights and authorized judges to award fees outside the fee schedule if adhering to it yielded unreasonable results.

Business interests lobbied the Legislature earlier this year to, at a minimum, limit the hourly rates that attorneys could charge. But lawmakers did not approve a change.

Despite the marked increase in legal costs for 2016-2017, the report notes that when adjusted for inflation, aggregate attorneys’ fees in Florida workers’ compensation have decreased by more than $100 million over the past 14 years.


Texas Workers’ Compensation Costs Down 63% Since 2005


Austin, TX ( – More Texas businesses are providing workers’ compensation insurance as the cost of coverage continues to decline. Premiums have fallen by 63 percent since 2005 as the Division of Workers’ Compensation worked to reduce costs and improve care through health care networks, a drug formulary, safer workplaces, and other reforms.

In Texas, the average premium for each $100 of payroll dropped from $2.32 in 2003 to 86 cents in 2015, according to the National Council on Compensation Insurance.

The fact that fewer employees are filing workers’ compensation claims—a 28 percent drop since 2004, has contributed to the decline in premium costs. Non-fatal injury rates are also down 36 percent since 2005, an indication that employers are making workplaces safer.

“With premium costs down more than 60 percent, more employers have opted to provide workers’ compensation insurance, which means financial resources are there for injured employees when they need help the most,” said Texas Commissioner of Workers’ Compensation Ryan Brannan. “And in Texas, employees are also getting better care.”

More employees are getting treatment sooner. About 84 percent of injured employees receive non-emergency medical care within seven days of their injuries, compared to 76 percent in 2000. The average number of claims treated by physicians decreased over the last decade, from 21 claims per physician in 2000 to about 15 per physician in 2016.

“Looking at the numbers and the trends, we also see that injured employees are getting healthy and back to work faster than ever,”, Brannan said.

In Texas, more injured employees are back at work within six months of their injury, and the average number of days off work has decreased by more than 30 percent since 2005.

Rada Kleyman
Risk Manager

Workers’ Compensation is Highest Risk Sector


Sacramento, CA – According to a new A.M. Best Co. Inc. special report,the U.S. workers compensation industry experienced more financial impairments during a 17-year period from 2000-2016 than any other property/casualty line of business.

Best defines impairments as being situations in which a company has been placed, via court order, into conservation, rehabilitation and/or insolvent liquidation.

Overall, 354 property/casualty insurers became impaired during the study period.

Supervisory actions undertaken by insurance department regulators without court order were not considered impairments for this study unless delays or limitations were placed on policyholder payments, Best said in a statement.

According to the study, the workers compensation sector accounted for 26% of the impairments; commercial lines insurers represented 22% of the impairments, split between other liability/commercial multi-peril at 15% and commercial auto at 7%; and 23% of impairments were split among specialty lines. The remaining sectors accounted for personal lines.

Specific causal factors were identified for 91 of the impairments, with fraud or alleged fraud the leading cause and present in 23 of the impairments, while 21 impairments related primarily to affiliate problems.

Catastrophe losses, largely in Florida and Texas, were responsible for 18 impairments, while 16 companies suffered impairment after experiencing rapid growth, the according to the statement.

Of the 354 impaired companies during the period, 45% were rated by Best at some point during the period between the date of impairment and three prior year-ends.

The study concludes that there has been a significant decline in the number of impairments that Best has been involved in rating in recent years. From 2007-2016, there were 174 U. S. property/casualty impairments, of which 21% were rated by Best at a point during the period between date of impairment and three prior year-ends, compared with 45% for the 2000-2016 period, according to the statement.

Rada Kleyman
Risk Manager