Florida Association of Professional Employer Organizations Week 5 Legislative Update

by David Daniel, FAPEO LobbyistOnly 28 days left of the 2006 Legislative Session.   

During Week 5 both the House and Senate passed their respective budgets to the other chamber, setting up the formal conference committee process.  Once the Speaker of the House and the Senate President agree on budget allocations for each of the budget subcommittees the process of reconciliation of the budget differences begins.  There are large budget items to be ironed out between the Senate, House and Governor surrounding education spending, tax incentives and tax relief.  The Governor is seeking $1b in tax relief with corporate income reductions for manufacturing and retail among the mix.  The House has agreed to the $1b but the centerpiece of their package is a 2 cent reduction in the business rent tax.  The House proposal leaves out the corporate income tax reduction entirely.  The Senate is only at $250 m in tax relief.  They also fund the Governors $250 million incentive package for Enterprise Florida (which the House does not fund).  The Senate also includes a couple of million in a reduction of the required local effort as a way of property tax relief.  

It will sure be a fun 28 days

Re-Employment Assistance

HB 1017 by Rep. LaRosa (R- St. Cloud) — SB 1216 by Sen. Stargel (R-Lakeland)

This legislation is DEO’s package which seeks to identify and prosecute unemployment fraud by claimants.  The bill has been substantially amended from the bill as originally filed.  I have attached the latest version of the bill and its accompanying staff analysis for your review. 

HB 1017 passed the House Transportation and Economic Development Appropriations Subcommittee during Week 5 by a vote of 11-0.  It will now head to the House Economic Affairs Committee for consideration.  SB 1216 is scheduled to be taken up by the Senate Commerce and Tourism Committee during Week 6. 

Workers Compensation System Administration

SB 986 by Sen. Simpson (R-Trilby)  — HB 613 by Rep. Sullivan (R-Eustis)

This legislation includes a variety of changes to the workers’ compensation law including employer compliance and coverage responsibilities, DFS powers and duties, resolution of medical issues, repeal of an underutilized program, and elimination of certain fees.  It is the work product of the Division of Workers Compensation in the Department of Financial Services.  I have attached SB 986 and the staff analysis to SB 986 to this email for your review. 

HB 613 has been placed on the House Second Reading Calendar.it is awaiting being taken up on the Special Order Calendar.  SB 986 was taken up and passed the Senate Banking and Insurance Committee by unanimous vote.  It will now head to the Senate Appropriations Subcommittee on General Government for consideration.

What is the Zenefits Model? Coemployment without Coemployment? The Verdict is In –

We should be very interested in where this goes next.

This to me promotes the same concepts.  One gateway for all of my non-operational needs as an employer… but the right way.  

The coemployed way –

  •  PRH

Zenefits rose faster than any unicorn. Now it’s falling just as quickly.

On Monday, Zenefits cofounder Parker Conrad resigned as CEO and as a director of the company. The move comes as further questions are being raised about the steps Conrad took to put Zenefits into hypergrowth–including flouting laws about who is allowed to sell insurance.

COO David Sacks, formerly of PayPal, now steps into the CEO job at Zenefits. In an email sent to employees, he admitted the company has taken too many wrong steps. “We sell insurance in a highly regulated industry. In order to do that, we must be properly licensed. For us, compliance is like oxygen. Without it, we die,” he wrote. “The fact is that many of our internal processes, controls, and actions around compliance have been inadequate, and some decisions have just been plain wrong. As a result, Parker has resigned.”

Conrad became a poster boy for Silicon Valley’s billion dollar startups, peaking last year when he raised $500 million to give Zenefits a valuation of $4.5 billion. The 35-year-old was the largest shareholder of Zenefits at the time. Zenefits touted itself as the fastest-growing software service ever, based on its free cloud human resources platform that it pitched to small businesses around the U.S. The startup makes the majority of its money off commissions when those businesses use its software to buy insurance.

However, last November, Conrad was on the defensive when he spoke with FORBES, admitting revenue growth was slower than expected. Conrad had expected Zenefits to hit $100 million in annual recurring revenue by the end of 2015, but that did not come to pass. “We set very aggressive goals, but it’s always our intent to hit them,” Conrad said at the time. “If we fall short, that sucks, but we’ll be there a couple months later.”

Zenefits had frozen hiring in some departments and was reeling from Fidelity marking down its investment in the startup by 48%. Meanwhile, Conrad was also fighting revelations first reported by BuzzFeed about its business practices. Zenefits is accused of employing salespeople in multiple states who did not have the right license to sell insurance.

To further reassure investors and partners, Saks announced on Monday that he was appointing Zenefits’ first Chief Compliance Officer, Joshua Stein. Zenefits also added three well-known investors to its board of directors: Peter Thiel of Founder Fund, Bill McGlashan of TPG Growth, and Antonio Gracias of Valor Equity Partners.

No PEO or insurance people.  This company flew in the face of the strict insurance statutes that govern insurance distribution through licensure.  It will be interesting to see how it responds in the marketplace.


Zenefits may be a proof that Silicon Valley’s hack-first-and-ask-questions-later philosophy doesn’t work once a company reaches the big leagues. ”We must admit that the problem goes much deeper than just process,” wrote Saks today. “Our culture and tone have been inappropriate for a highly regulated company. Zenefits’ company values were forged at a time when the emphasis was on discovering a new market, and the company did that brilliantly. Now we have moved into a new phase of delivering at scale and needing to win the trust of customers, regulators, and other stakeholders.”

As for Conrad, the last time he spoke with FORBES he said he still believed in Zenefits, despite its troubles. “Some days you’re the fire hydrant and some days you’re the dog,” Conrad said. Unfortunately, there’s little doubt which one he is today.



The 35 year-old CEO’s departure comes amid potentially lethal questions, first reported by  about whether the company skirted insurance industry regulations. Zenefits has been accused of employing salespeople who did not hold proper licensing to sell insurance in multiple states.

“We sell insurance in a highly regulated industry,” wrote incoming Zenefits CEO David Sacks in an email to employees Monday. “In order to do that, we must be properly licensed. For us, compliance is like oxygen. Without it, we die. The fact is that many of our internal processes, controls, and actions around compliance have been inadequate, and some decisions have just been plain wrong.”

“A lot of these new companies seem to be built on the assumption that [venture capitalists] will give them money for free because they will grow like a viral technology app. That is not really how it is playing out,” observed Michael Kitces, in an interview over the summer. Kitces, a certified financial planner who writes about investment management industry trends on his popular blog Nerd’s Eye View, added, “We are not a high trust tech industry. We are a low trust financial industry that unfortunately has done some bad things over the past 10 to 15 years. That is not an ‘if you build it they will come’ kind of an environment.”



RiskMD and Libertate Insurance CEO, Paul Hughes will be speaking at the 20th annual Enterprise Data World Conference in San Diego:

Paul Hughes will be speaking at the annual Enterprise Data World Conference in April.

The Enterprise Data World Conference is recognized as the most comprehensive educational conference on data management in the world.  Speakers include Chief Data Officers, Data & Information Architects, Directors of Data Governance, Information Quality Professionals, Data Scientists, and Big Data Engineers.

Attendees will be small and large corporation’s officers and directors that understand the importance of data to their organization and want to improve how they structure and utilize data to make more informed decisions.

Topics Include:

  • Data Strategy
  • Data Architecture
  • Data Development
  • Business Intelligence and Analytics
  • Agile Data
  • Data Science
  • Metadata
  • Governance and Stewardship
  • Data and Information Quality
  • Data Management Technologies

To name a few.

This is the second speaking engagement of the year for Mr. Hughes with more on the horizon.  “I feel honored and excited to participate in events like these as I truly believe and understand the importance of how data effects all of our businesses on a daily basis” says Mr. Hughes.

See more at:  http://edw2016.dataversity.net/#sthash.ofkG6mCt.dpuf

The Great State of Texas and Workers’ Compensation

After having a couple great weeks in Texas, thought I’d share some insights —

Workers’ compensation pricing is for certain unique in Texas.  An awesome link to bookmark.


First off, it is where more employers “opt out” of the workers’ compensation system then anywhere else in the country (only New Jersey and Oklahoma currently allow although South Carolina and Tennessee are seriously considering).  Opinions run in the vicinity that 30-40% of <50 employee firms opt out.

Secondly, it is the only state in the country that allows carriers to negotiate experience modifications outside of an actuarial rating bureau such as the NCCI.

Thirdly, carriers can either file for the Texas relativity or a deviation thereof.  Or… A carrier can file for a loss cost multiplier that is factored off NCCI loss costs.  True North on pricing is a tad more challenging.

Lastly, Texas is by far the most profitable state in the country for workers’ compensation with an ROE plus 35%.  Maybe the challenge makes sense!  This state is kicking ass and taking names !

  •  PRH




RiskMD CEO and Data Blueprint Director of Consulting to speak at the 2016 Insurance Data Management Association Annual Conference:

RiskMD CEO, Paul Hughes and Data Blueprint Director of Consulting, Mitch Hamilton have been asked to speak at the IDMA annual conference in Philadelphia, PA in April.  The session will focus on Laying the Data Groundwork to Predict Risk Trends around Worker’s Compensation Insurance”

Mr. Hughes engaged Data Blueprint early in the development stages of RiskMD to architect and link multiple data streams within his brokerage and managing general agency’s portfolio of business.   This included multiple robust data pools from various systems of record to include policy, claims, payroll, agency, and CRM systems.  Data Blueprint laid the foundation and developed the methodology for how the data would be stored in a proprietary and secure data vault which supplied the data for the business intelligence tool RiskMD.

The relationship between the two organizations continues to thrive and has proven to be an innovative partnership that brings insurance expertise together with data architecture and management expertise.

This is only one of a number of speaking engagements that these gentlemen intend to speak at throughout 2016.

For more information on IDMA and the conference please refer to the link below.


Find your ‘true north”.

As many of us are working on our new year resolutions or setting our personal goals for 2016, I was thinking about an article from Harvard Business School Professor Bill George that I recall reading early last year.  This link asks questions that, if honestly answered, can provide an outline for achievement, introspection and how to become the person you want to be.


Make 2016 a better year.


New cybersecurity legislation for EU financial service firms.

As we all know, cybersecurity will only become more challenging going forward.  For those of you with financial service clients, you might want to consider having the conversation about being properly prepared for this kind of potential risk and the legislation once it hits the U.S.

To have a better understanding, please see the attached article from the CFA Institute.

It’s better to be prepared than left behind.