About Rada Kleyman

Ms. Rada Kleyman is a Risk Manager at Libertate Insurance. At Libertate Ms. Kleyman is inspired by the following mantra “prevention is better than cure”. She believes it is all about in avoiding and mitigating the effects which are essentially unavoidable. Her direct role and responsibility is to facilitate internal sales efforts as well as the servicing of existing PEO clients. Ms. Kleyman brings a full complement of sales and management skills with over 28 years of successful experience. Highly effective in competitive environments with exceptional time management, strong interpersonal, presentation and closing skills which she acquired selling exotic cars for Ferrari of North America and prior to that Capital Medical Radiology Equipment Sales overseas. She is a recognized top performer, leading stores and accounts to exceed expected growth. Ms. KIeyman is graduate of Northeastern University in Boston with a BS Degree in Criminology with a minor in African Art. She holds a General Lines (Prop & Cas) GL 2-20 license and 4-40 Customer Representative License. Libertate Insurance LLC Vigilant Insurance Representation 707 E. Washington Street, Orlando, FL 32801 844.571.0810 407.613.5475

California Workers’ Comp Pure Premiums Could be Lowered 7th Straight Time

Good news for California!

In an effort to stimulate California’s business economy the Commissioner adopts another rate decrease.

Rada Kleyman

Hailing worker’s compensation reform in California as a “big hit,” the two top people at the Workers’ Compensation Insurance Rating Bureau explained why the WCIRB governing committee on Monday submitted a lower mid-year pure premium rate filing to the California Department of Insurance.

“The beneficial effects of Senate Bill 863 continue to impact the system,” said Bill Mudge, president and CEO of the WCIRB. He spoke to Insurance Journal with Dave Belluci, executive vice president and chief actuary for the WCIRB, about the pure premium rates the same day they were filed.

SB 863 was a result of negotiations between labor and businesses, which was signed by Gov. Jerry Brown in 2012. It has garnered mostly praise in the past few years for reducing frictional costs in the state’s massive workers’ comp system.

The WCIRB mid-year filing will propose July 1, 2018 advisory pure premium rates that average $1.80 per $100 of payroll. That is 7.2 percent lower than the insurance commissioner’s approved average Jan. 1, 2018 advisory pure premium rate of $1.94 and 19.0 percent less than the industry average filed pure premium rate as of Jan. 1, 2018 of $2.22.

The proposed July 1, 2018 decrease follows six straight decreases since 2015. If approved, the decrease will result in an average drop of more than 35 percent from the January 1, 2015 advisory pure premium rates, according to the WCIRB.

“It’s a big hit,” Mudge added of SB 863.

The filing submitted on Monday states:

“Since the implementation of Senate Bill No. 863 (SB 863) beginning in 2013, the rate at which indemnity claims are settling has been increasing. We believe SB 863 has accelerated the rate in which claims have settled as a result of quicker medical treatment resolution through the use of independent medical review (IMR), reduction in the volume of liens and a significant decrease in the number of spinal surgeries.”

Changes brought in by SB 863 include the use of evidence-based medicine to guide treatment decisions, treatment dispute settlements by independent medical reviewers, and improving workers’ access to network physicians. SB 863 also created an Independent Medical Review program, in which physicians use evidence to determine the necessity of requested treatments.

Belluci also credited a more recently enacted law and a new drug formulary for part of the reason for the pure premium decrease.

A sharp decline has been reported in lien filings following the implementation of Senate Bill 1160 on Jan. 1, 2017. The new law requires the CDI to automatically stay liens belonging to providers who have been indicted or charged with crimes. The DIR issued a progress report in late March on its anti-fraud efforts, including updates on the suspension of 227 medical providers from treating California’s injured workers and the dismissal of 292,000 illegitimate liens with claims valued at more than $2.5 billion.

Belluci said they anticipated a 10 percent reduction in lien filings as a result of the new law, but it’s had a much more dramatic impact.

“Now that we’re a year into those reforms, we’re seeing about a 40 percent reduction in the number of new liens being filed,” Belluci said, adding that “about a point of the pure premium reduction impact is coming with the reduction of liens.”

Belluci also credited a new formulary for prescription drugs in workers’ comp that’s creating more efficiency and putting California on par with only a few states that are starting to recognize the value they bring to the workers’ comp system.

“It’s a pretty significant change for the workers’ comp system,” he said.

Estimates are that the new formulary will reduce pharmacy costs by roughly 10 percent, which equates to roughly half-a-point reduction in the WCRIB’s pure premium recommendation.

The governing committee’s decision was based on the WCIRB actuarial committee’s analysis of insurer loss and loss adjustment experience as of Dec. 31, 2017.

By Don Jergler | April 9, 2018

AmTrust Financial Services Inc (AFSI) Expected to Post Quarterly Sales of $1.51 Billion

Securities and Exchange Commission allows for an automatic 15-day extension of its March 1st, 2018 filing deadline upon request.  March 16th would be the new deadline for AmTrust to post 4th Quarter Sales.  It looks like this will be achieved by AmTrust by March 12th.

Rada Kleyman


Equities analysts expect AmTrust Financial Services Inc (NASDAQ:AFSI) to announce $1.51 billion in sales for the current quarter, Zacks Investment Research reports. Three analysts have made estimates for AmTrust Financial Services’ earnings, with the lowest sales estimate coming in at $1.49 billion and the highest estimate coming in at $1.54 billion. AmTrust Financial Services posted sales of $1.41 billion during the same quarter last year, which would suggest a positive year-over-year growth rate of 7.1%. The business is expected to issue its next earnings report on Monday, March 12th.

On average, analysts expect that AmTrust Financial Services will report full year sales of $1.51 billion for the current financial year, with estimates ranging from $6.00 billion to $6.05 billion. For the next fiscal year, analysts forecast that the company will post sales of $6.24 billion per share, with estimates ranging from $5.90 billion to $6.57 billion. Zacks Investment Research’s sales averages are a mean average based on a survey of research firms that that provide coverage for AmTrust Financial Services.

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Stone Point Capital, the Karfunkel Family and the CEO to Acquire AmTrust Financial Services, Inc.

Good news for AmTrust as Stone Point Capital and Karfunkel Family to buy back the 45% of common shares.   This move will bring AmTrust back from being under review to stable within the A.M. Best #: 051002  rating system.   This purchase is bringing significant improvement in balance sheet strength.   That is exciting news for AmTrust as they are the leader in Workers Compensation space.

Rada Kleyman

AmTrust Financial Press Released March 1st, 2018

NEW YORK, March 01, 2018 (GLOBE NEWSWIRE) — AmTrust Financial Services, Inc. (Nasdaq:AFSI) (“AmTrust” or the “Company”) announced today that it has entered into a definitive agreement with Evergreen Parent, L.P., an entity formed by private equity funds managed by Stone Point Capital LLC (“Stone Point”), together with Barry D. Zyskind, Chairman and CEO of AmTrust, George Karfunkel and Leah Karfunkel (collectively, the “Karfunkel-Zyskind Family”), in which Evergreen Parent will acquire the approximately 45% of the Company’s issued and outstanding common shares that the Karfunkel-Zyskind Family and certain of its affiliates and related parties do not presently own or control. The transaction values the fully diluted equity of the Company at approximately $2.7 billion, excluding the Company’s outstanding preferred stock.

Under the terms of the proposed merger, AmTrust common shareholders who are not affiliated with the Karfunkel-Zyskind Family (the “Public Shareholders”) will receive $13.50 in cash for each share of AmTrust common stock they hold. This represents a premium of 33% to the Company’s unaffected closing common stock price on January 9, 2018, the last trading day before Stone Point and the Karfunkel-Zyskind Family announced their proposal to acquire all of the outstanding common shares of AmTrust that the Karfunkel-Zyskind Family did not already own or control. The Karfunkel-Zyskind Family and certain of its affiliates and related parties will rollover their shares in the Company for interests in Evergreen Parent. Each share of the Company’s currently outstanding preferred stock will remain outstanding and it is expected that they will continue to be listed on the New York Stock Exchange following the consummation of the transaction.

The proposed merger is anticipated to close in the second half of 2018, subject to satisfaction or waiver of the closing conditions, including approval by regulatory authorities and the Company’s shareholders, including approval by a majority of the shares of the Company not owned or controlled by the Karfunkel-Zyskind Family, their children, senior management or their respective affiliates and certain related parties. The Company will file a Current Report on Form 8-K with the Securities and Exchange Commission which will more fully describe the terms and conditions of the proposed merger.

AmTrust’s Board of Directors has unanimously approved the proposed merger based upon the unanimous recommendation of a Special Committee of the Board of Directors, which was composed of independent directors not affiliated with the Karfunkel-Zyskind Family and advised by its own financial and legal advisors. The Special Committee and the Board each recommend that the Company’s Public Shareholders approve the merger and adopt the merger agreement.

Don DeCarlo, Chairman of the Special Committee, said: “The Special Committee and its advisors conducted an independent process and careful review of the proposal, with a focus on obtaining the best outcome for public shareholders. We believe the proposal delivers immediate and certain value for public shareholders at a significant premium to the unaffected share price and we encourage public shareholders to support the transaction.”

Mr. Zyskind, Chairman and CEO of AmTrust, said: “I believe that this transaction represents an exciting step forward for AmTrust, our employees, and the agents, brokers, partners, and customers we serve. As a private enterprise, we will be able to focus on long-term decisions, without the emphasis on short-term results.”

Mr. Zyskind continued, “The year 2018 marks the 20th anniversary of AmTrust’s founding. Alongside Stone Point Capital, a strong partner widely recognized as an experienced investor in the insurance sector, the Karfunkel-Zyskind family is deeply committed to the long-term strength and success of AmTrustWe are well-positioned to continue meeting our policyholders’ needs, supporting our brokers and agents, and developing our partner relationships.”

Jim Carey, Senior Principal of Stone Point Capital, said: “Stone Point is excited to be partnering with the Karfunkel-Zyskind family and AmTrust’s management team in the next phase of AmTrust’s growth. AmTrust has built its business through an innovative spirit and dedication to their employees, customers and partners. Under Barry Zyskind’s leadership, AmTrust will continue to invest in long-term growth initiatives and continue to support their policyholders, agents and brokers.”

Deutsche Bank Securities Inc. is serving as financial advisor to the Special Committee and BofA Merrill Lynch is serving as financial advisor to AmTrust.

Willkie Farr & Gallagher LLP is acting as legal advisor to the Special Committee, Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal advisor to Stone Point and Paul, Weiss, Rifkind, Wharton & Garrison LLP is acting as legal advisor to the Karfunkel-Zyskind Family.

New Florida bill would help employees collect worker’s comp regardless of immigration status

A new bill in Florida will ensure folks will be paid who are injured on the job no matter if they used other people’s Social Security numbers or identification to secure a  job.
Rada Kleyman


  on Wed, Feb 21, 2018

A Senate committee Tuesday narrowly approved a bill that would eliminate part of Florida law that allows employers to deny benefits to injured workers who use other people’s Social Security numbers or identification to obtain jobs.

Approved in a 6-4 vote by the Senate Banking and Insurance Committee, the bill (SB 1568) would eliminate a provision put into law in 2003 that made it felony insurance fraud for people to knowingly present false or misleading information about their identities for obtaining employment.

But another part of workers’ compensation law defines worker as “any person who receives remuneration from any employer … whether lawfully or unlawfully employed, and includes, but is not limited to, aliens and minors.”

Bill sponsor Gary Farmer, D-Fort Lauderdale, told the committee that the purpose of the bill is “to ensure that workers who are injured on the job, who were fulfilling their obligation, injured because of a dangerous workplace condition or something happened on the job, receive the benefits they are owed under the workers’ compensation system statute, regardless of what their immigration status might be.”

Farmer offered an amendment that he said cleaned up the original version, which he indicated “unnecessarily touched on some immigration statutes.”

“It was not our intent to alter any immigration laws of the state of Florida or the United States of America with this bill,” Farmer said. “This bill, again, is simply designed to ensure that workers who are injured on the job obtain the benefits they are due.”

Despite his assurances that the bill is a glitch bill to clarify existing laws, the measure drew opposition from Sen. Rob Bradley, R-Fleming Island; Sen. Denise Grimsley, R-Sebring; Sen. Doug Broxson, R-Gulf Breeze, and Sen. George Gainer, R-Panama City.

Committee Chairwoman Anitere Flores, R-Miami, and Sen. Rene Garcia, R-Hialeah voted with the four Democrats on the committee to approve the bill.

There is no House version of the bill, with less than three weeks left before the scheduled March 9 end of the legislative session.

The Naples Daily News reported last year that at least 163 immigrant workers in Florida were charged with felonies for providing false identification after they were injured since 2004. In at least 159 cases, their employers or insurance companies reported them. According to the newspaper, more than 80 percent of the injured immigrants reported between 2013 and 2016 worked for employee leasing companies or staffing agencies that recruit workers

Rich Templin, legislative and political director for the Florida AFL-CIO, told the committee that other than Florida and Wyoming, every state has separated legal status from workers’ compensation and called Farmers’ bill a “first step to correcting a terrible injustice.”

Farmer’s bill was one of two workers’ compensation-related measures the Senate committee approved Tuesday. The other measure (SB 1866), filed by Broxson, received unanimous support. It would allow large employers that have workers’ compensation premiums of at least $500,000 to purchase a “guaranteed cost workers’ compensation insurance policy” at a set premium that does not change, as well as an accompanying reinsurance policy.

The Property Casualty Insurers Association of America opposed the bill.

Alternatives to the standard workers’ comp marketplace

One of the things that make workers’ compensation such a challenge for employers and carriers is the long-tail nature of the claims. “Long tail” means that premiums collected today must cover losses for years to come. Nobody knows this better than the employers in the State of California.     Below are few other options for workers compensation outside the standard market option.


– Nelson Aldrich 

The workers’ compensation machine in California is an impressive beast. The standard workers’ comp market is the exclusive remedy for all workplace injuries and indemnity claims (lost wages) for over 500,000 employers. The system responded to nearly 800,000 injured workers in 2015.

On average, California is home to the highest workers’ comp rates in the country. This is driven by the greatest frequency of permanent disability claims, higher-than-average cost of handling claims and delivering benefits, and, of course, drastically higher medical treatment costs which are 60 percent higher per claim than the national average.
While indemnity claims in other states are trending downwards, it’s quite the opposite in California.

It’s a bleak picture, but it’s not all doom and gloom in the standard market. Rates have been trending downward for several years as the market continues to soften, and California has an experience rating system which works in favor of those employers who manage to keep claims low.

For some employers, the silver lining is just not bright enough to keep them in the standard market, and many are beginning to ask what else is out there. Perhaps you, too, have grown weary of rate changes as the market swings from hard to soft, then back again. Maybe the ever-changing appetites of workers’ comp carriers has you weary of switching insurance companies every couple years.

If those sentiments resonate with you, then you might be among the growing number of business owners who are looking for an alternative.

Let’s look at three of the most commonly utilized alternatives to the standard market, starting with group captives.

Group captive
A group captive is an insurance company that is owned and controlled by its members. You might be a good fit for a group captive if you have a desire for control and an entrepreneurial spirit, own a financially strong enterprise, have a demonstrated commitment to safety and loss prevention and a better-than-average loss experience for your industry group.

A unique feature of group captives is that general liability and auto liability can be rolled into the same program. This model begins to make sense for those employers who are paying annual premium in excess of $100,000 for workers’ comp, general liability and auto liability combined. The most attractive features of the group captive solution generally fall into two categories: Control and Share of Profit.

What does it mean to have control over your own insurance program? It means that your own loss history dictates the premium you will pay. It also means that as an owner, you have a say in how the insurance company operates, what services will be provided to members and who else gets in the group.

Having a share in underwriting profits is self-explanatory. However, consider this: If there wasn’t money in the California insurance industry, we wouldn’t see folks like Warren Buffett rushing to enter the marketplace. Buffett’s Berkshire Hathaway has grown in recent years to the largest writer of workers’ comp insurance in California, next to the State Fund.

As premium dollars sit in reserve waiting to be paid out, owners of Fortune 500 insurance companies reap the profit from interest earned, and the same is true for members of group captives. While there is a risk-sharing element with all group captives, a close examination shows that risk sharing is contractually capped and a very small component of the overall funding model.

PEO model
Another popular alternative to the standard market is the PEO option. A PEO is a professional employer organization, and it can take many forms. You might like the idea of joining a PEO if you are looking to consolidate your payroll, human resources, workers’ comp, loss control and even group health insurance into one solution.

Generally speaking, PEO’s might be a good fit for owners who want more time to work on their business as opposed to in their business. As an alternative to the standard workers’ comp market, PEO’s often open doors for employers in riskier industries who have been left with State Fund as their only option.

Perhaps it’s a consistently high experience mod, or simply the nature of the work you do that has historically left you with few options. Chances are, with a little digging you will find a PEO solution that both lowers premiums and provides services that will help keep your employees safe.

One thing to keep in mind is that lower premiums are just the tip of the PEO iceberg. To fully realize their utility, business owners should be looking for a PEO partner who will decrease admin burdens, provide valuable consulting, and lower the overall cost of doing business.

Self-insured groups
Self-insured groups are regulated alternatives to the standard marketplace, and they are approved by the State of California to provide workers’ comp benefits to their members. Historically, self-insured groups see an influx of interest when markets are hardening, and rates are increasing in the standard market.

These groups are generally homogenous, meaning similar risks are placed into a single self-insured industry group. As with a group captive, there is a risk-sharing element in that each member is responsible for the performance of the group. However, the extent of that risk sharing is almost night and day when comparing a group captive to a self-insured group. Some self-insured groups have found a way to engineer away risk sharing with reinsurance, but often times the idea of joint and several liability is just too much for some business owners to accept.

You might like the idea of a self-insured group because you are chasing premiums that are more predictable and almost always lower than the standard market. You might also like the idea of a tight group of top-performers comprising the membership, which also lends itself to lower premiums. Self-insured groups are generally known for offering expert consulting for risk profiles specific to their members, in addition to aggressive claims handling.

With the reward of lower, more stable premiums comes the risk that your self-insured group might be hit with an assessment. An assessment simply means that claims were too high, and more money is required to pay the bills. It’s also possible that another member might become insolvent, and those left in the group might be on the hook for his share of the premium.

Even with the higher degree of risk, certain industry groups such as contracting, healthcare, farming, food processing, and livestock management tend to have a strong and growing membership within self-insured groups. As compared to group captives, self-insured groups have lower bars to entry and should be considered as an option for those employers who want alternatives but might not be ready for the captive option financially or with respect to their loss history.

As healthcare costs continue to bloom and wages continue to increase, it’s more likely than ever that the standard market will begin to harden soon. A hardening market means tougher underwriting guidelines, increasing rates, and more restricted appetites. In other words, the standard market menu is likely to feature less options and higher cost just around the corner.

Now might be the perfect time to consult with your risk management professional and join the growing number of business owners who are demanding alternatives. It’s critical to choose a partner who both understands and has access to all available options. Don’t forget to be vocal about your expectations and business goals. While the alternative marketplace might not be a fit now, the right risk management partner can help you prep for entry into an alternative program that better aligns with your long term goals




Lori Lucas to Lead Benefits Data Powerhouse

Who is the Employee Benefit Research Institute and what do they do?

Both Republicans and Democrats rely on EBRI’s  canvas data and economic analyses to understand how employers’ benefits programs are working, or not working. In recent years, EBRI reports have helped policymakers’ understand how workers have been using health savings accounts and what are the long term trends.


By Allison Bell
Insurance Editor

Lucas was Hewitt Associates’ retirement research director.  Lori Lucas is now the head of a think tank that shapes how people in Washington think about health insurance and retirement savings programs.

The board of the Employee Benefit Research Institute has named her to be the group’s new president and chief executive officer.

Lucas succeeds Harry Conaway, who has been EBRI’s interim president since 2015.

EBRI is a Washington-based research institute that was founded in 1978. Both Republicans and Democrats rely on EBRI’s survey data and economic analyses to understand how employers’ benefits programs are working, or not working.

In recent years, for example, EBRI reports have helped policymakers’ understand how workers have been using health savings accounts, and how many workers in each age group have started preparing for retirement.

The group’s reports influence federal work on individual retirement accounts and other individual retirement savings programs as well as federal efforts to improve employer-sponsored retirement plans.

The Future

Lucas said in a statement that she’d like to see EBRI do research on financial security benefits, such as student loan benefits and emergency fund benefits, as well as on traditional health and retirement benefits.

She also talked about the need to maintain EBRI’s reputation for objectivity.

“My goal is to continue EBRI’s focus on unbiased data and research that is critical in today’s evolving employee benefits environment,” Lucas said.

Lucas’s Past

Lucas has a bachelor’s degree from Indiana University and a master’s degree from the University of Illinois. She started out as an analyst at Morningstar Inc.

Later, she served as a pension benefits consultant, and then as director of retirement research, at Hewitt Associates, when Hewitt Associates was a major provider of benefit plan data in its own right. In 2005, for example, she was talking about many U.S. employers’ general lack of interest in retirement benefits.

In 2006, Lucas became the head of the defined contribution plan practice at Callan, a San Francisco-based institutional investment consulting firm.

Lucas has been involved with EBRI since 1999. She recently served as the group’s vice chair.

Florida Bill Seeks to Stop Arrests Of Injured Immigrant Workers


A new bill under consideration by Florida lawmakers would stop insurance companies from dodging workers compensation payouts by aiding in the arrest and deportation of unauthorized immigrants who are injured on the job.

Legislators and advocates have been pushing for the measure since last summer, when ProPublica and NPR documented more than 130 cases in which immigrants who had suffered legitimate workplace injuries were flagged to law enforcement agencies by their employers’ insurers. The workers faced felony fraud charges for using a fake ID when they sought medical care. Meanwhile, the insurers often avoided paying the workers’ compensation benefits legally due to all employees injured at work.

They Got Hurt At Work — Then They Got Deported
They Got Hurt At Work — Then They Got Deported
Some workers were detained by federal immigration agents and deported without getting proper medical treatment for serious injuries.

The practice stems from a provision in a 2003 workers’ comp law that made it a crime to file a claim using false identification. Many injured immigrants never pursued compensation themselves, ProPublica and NPR found. Instead insurers turned them in after they sought treatment and their employers transmitted paperwork containing the Social Security number they’d used to get hired.

Because the law also made it a crime to apply for a job with a fake ID, hundreds of immigrant workers were charged with workers’ comp fraud even though they had never been injured or filed a claim.

State insurance fraud investigators insist the law has nothing to do with immigration. But ProPublica and NPR found that more than 99 percent of the workers arrested under the statute were Hispanic immigrants working with false papers.

Critics of the 2003 law — and how it is being used — say that it not only harms workers, but it allows unscrupulous construction companies and other employers in dangerous industries to hire unauthorized immigrants, take safety shortcuts and know they won’t be financially responsible for any injuries that occur. And they say it shifts medical costs to taxpayers.

“This has sent a signal throughout the workforce that if you’re injured, don’t report it, don’t tell your boss because you know that in order to keep from paying benefits, they’re going to call immigration on you,” said Rich Templin of the Florida AFL-CIO. “You will wind up in the public health care system. That is essentially the taxpayer subsidizing the health care cost that should be paid by the employer and insurance carrier.”

The new bill, introduced by state Sen. Gary Farmer, a Fort Lauderdale Democrat, would eliminate the false identity provision and clarify the statute so that it applies only to people who commit traditional workers’ comp fraud, such as lying about injuries or eligibility for benefits.

As is the case in nearly every state, all Florida workers — including unauthorized immigrants — are entitled to medical care and lost wages through their employers’ workers’ comp insurance.

“We have a whole separate system to deal with immigration status,” Farmer said. “All of that is neither here nor there. It comes down to the fact that these folks were doing their job, got hurt while they were doing their job, and the separate issue of immigration status shouldn’t be used to take away the benefits that they’re entitled to.”

It’s unclear what effect the bill would have. Unauthorized immigrants could still face charges under federal and state identity theft laws, and there’s no ban on employers calling federal immigration officials about their own workers. But Farmer’s bill also eliminates a provision that insurers said required them to inform the state whenever they discovered someone might be working with false papers.

The bill hasn’t received a lot of attention in the legislature yet and doesn’t have a companion bill in the state House of Representatives. But it has gained the support of Democrats and Republicans, worker advocates and insurance groups and could be attached as an amendment to other workers’ comp legislation making its way through both chambers.

After ProPublica and NPR’s stories ran, Republican Sen. Anitere Flores, the president pro tempore of the state Senate and chair of the Banking and Insurance Committee, called the issue “borderline unconscionable.” And a national insurance group, the Coalition Against Insurance Fraud, urged lawmakers to “correct this loophole.”

In addition to the ProPublica and NPR investigation, the issue was also the subject of a Naples Daily News series in December.

Despite its supporters, passing the bill might not be easy, said Templin of the AFL-CIO. It’s unclear how much sway the national insurance group will have on Florida insurers, many of which are independent and tied to state business associations. In addition, he said, many lawmakers in Florida’s conservative House oppose legislation seen as helping unauthorized immigrants.

ProPublica has reached out to lawmakers, insurance attorneys and industry representatives who might oppose the bill, but have not yet heard back. But attorneys working for insurers have supported the current law in the past saying that anyone who lies should not have access to benefits.

Still, Templin remained hopeful.

“When you have something brought to light that is as egregious as this, that Republicans have said is wrong, that representatives from the insurance industry have said is wrong,” he said, “this seems like a no-brainer as something that has to be done right away.”

Patriot National Files for Chapter 11 Bankruptcy Protection

Source: Patriot National Chapter 11 filing

In accordance with a previously-agreed restructuring plan with lenders, Patriot National, Inc., an insurance technology and outsourcing firm, has officially filed for chapter 11 bankruptcy protection and reorganization.

The chapter 11 filing was made Jan. 30 in the U.S. Bankruptcy Court for the District of Delaware by the company and its direct and indirect U.S.-based subsidiaries.

The move was expected. In November, the Fort Lauderdale-based company announced a restructuring support agreement (RSA) with its lenders, Cerberus Business Finance, LLC and its affiliates, and TCW Asset Management Co. LLC., which have agreed to acquire the financially troubled firm.

Patriot National’s financial woes came to a head in mid-November with the announcement that its largest workers’ compensation customer, Guaranteed Insurance Co. (GIC), would be placed in receivership by Florida regulators. The companies were mutually owned by founder, majority stockholder and former CEO Steven Mariano, who resigned from Patriot National last summer.

GIC held an estimated 10 percent of Patriot National’s stock and accounted for 60 to 70 percent of its business.

GIC provided alternative market workers’ compensation insurance in 31 states, with 8,600 active polices in force as of Nov. 13, including 1,250 in Florida. Under the liquidation order of Florida regulators, all GIC policies were cancelled effective Dec. 27.

The company’s recapitalization under the RSA and the bankruptcy plan include a new lending facility. The plan will provide the capital structure needed to revitalize operations and funds to grow the business, according to John Rearer, CEO of Patriot National.

According to the bankruptcy plan:

Employees will continue to receive all wages in the ordinary course of business
Broker commissions will be paid in the ordinary course of business
Carrier customers can be assured of uninterrupted service and payments in accordance with the terms of their current agreements
Vendors will continue to be paid going forward pursuant to existing terms
The company intends to complete its restructuring and emerge from bankruptcy in the second quarter of 2018.

Rearer said that during the chapter 11 and beyond, the company intends to operate its business in the “ordinary course with limited impact” on customers.

Shortly after Florida regulators took over GIC, Patriot National filed a forbearance agreement with the Securities and Exchange Commission that said it would be laying off 250 employees, representing approximately one-third of its workforce.

After the company emerges from bankruptcy, Cerberus and TCW will convert a portion of their claims under the financing agreement in consideration for 100 percent of the new equity to be issued in Patriot National and the subsidiaries under the plan. All existing equity interests in Patriot National and its subsidiaries will be extinguished, and Patriot National will no longer have any affiliation with its founder and former CEO Mariano.

“In cooperation with our lenders, we have taken a significant step in securing the future of Patriot National. Through this process we will reduce our debt, improve our liquidity and strengthen our financial condition, creating a more competitive company no longer bogged down by the historical relationships with and receivership of the Guarantee Insurance Company,” said Rearer.

One of Patriot National’s subsidiaries, Patriot Underwriters Inc., is a national program administrator that underwrites and services workers’ compensation insurance for insurance companies.

Another affiliate of Patriot National, Ashmere Insurance Co., is being acquired by New York-based Bedrock Insurance Group Holdings. Ashmere is a workers’ compensation insurance carrier licensed in 15 states.