April 14, 2023 – UPDATE: The Florida House Commerce and Senate Appropriations Committee hearings took place on Monday and Wednesday (April 10th & 12th) respectively. NRRA’s campaign efforts in opposition are already beginning to show some progress. See below.

Events Since Last Week’s Reporting

Following four (4) volleys of NRRA opposition letters to the involved committees, including most recently the Senate President, House Speaker, as well as the new Insurance Commissioner, NRRA has already started the “ground” campaign and needs your help.

We have partnered with Paul Handerhan, President of the Federal Association for Insurance Reform (FAIR). Mr. Handerhan has joined forces with Lewie Pugh, Executive Vice-president and legislative spokesman for OOIDA, and Linda Allen, a small independent Florida Trucker. Together, they collectively undertook our oral opposition presentations to the Bill at the two hearings this week.

While House Commerce on Monday voted unanimously to approve the Bill, the Senate Appropriations Committee hearing (on Wednesday, April 12th), prompted by our opposition testimonies, generated a number of very probing inquiries by some of the senators relating to their need to know more information as to how and why this bill will damage numerous local businesses (including truckers), or how RRGs seem to be operating in all fifty (50) states without the need for any rating(s) as to quality or size of capital surplus. While the Bill passed, it was not unanimous, and even some” supporters” acknowledged that they needed to know more.

Before and after the foregoing, Senator Nick DiCeglie, (sponsor of the Senate Bill) concluded his comments to the Committee that his office would be looking into this matter more thoroughly before final presentation of the Bill.

Why Florida Bill 516 matters for all RRGs and how you can help

If passed, Florida Bill 516 will have a devastating impact on not only trucking and transportation risk retention groups registered in Florida, but actually every RRG writing commercial liability, including auto. This could also arguably impact 96% of the RRGs registered in Florida. Hundreds, if not thousands of RRG owner-member-insureds could lose their coverage. The Bill’s passing may also open the door to other significant potential threats to risk retention groups in other states and for other types of risk retention group entities.

Here’s what all RRGs and members of NRRA need to know. If history is any example, regulatory intervention calculated in response to the bill could actually disqualify or interfere in a number of ways with RRG commercial liability insurance.

SB 516 is in Violation of the Federal Law – It is Unconstitutional

By imposing the requirement of an A.M. Best “A” rating and a minimum financial size status of $100M (in capital surplus) in order for an RRG to write commercial auto liability in Florida, the Bill unlawfully A) seeks to regulate risk retention groups, and B) unlawfully discriminates against risk retention groups that do not have to or cannot obtain such ratings. Both are categorically preempted by the Federal Liability Risk Retention Act, as NRRA has helped establish in numerous legal decisions in recent years.

If Florida can get away with violating the federal law by making any financial rating a requirement to do business in their state, it may set a precedent to make other states bolder to do the same thing.  We need to stop this bill before it passes because, if it passes, suing the state will take years and will be too late to help these impacted RRGs.

NRRA Launches Its Fundraising and Friend-raising Campaign: How You Can Help NRRA Oppose Bill 516

NRRA Executive Director, Joe Deems, announced today that the Association has developed a platform for financial support based on three (3) phases of ongoing activity:

  • Phase One – Presently ongoing campaign to communicate with and educate legislators as to the inherent flaws in the bill – i.e., while our interest and those of the proponents are actually not inconsistent, their language will be self-defeating, while ours will not be. The purpose will be to persuade an “amendment” to the Bill that will work.  Estimated cost at this point: $12,000.00 (including staff travel.)
  • Phase Two – Depending on Amendments actually adopted, an ongoing campaign to develop favorable agreements with multiple state agencies impacting the need for liability insurance from RRGs, e.g., OIR, Dept. of Highway Safety and Motor Vehicles; Business and Professional Regulation, etc. Estimated Cost will be in the range of $75,000.00 – $90,000.00.
  • Phase Three – If all else fails and the bill passes with the current damaging language, to commence litigation to enjoin enforcement of the bill and challenge it under the federal law preempting such activity under the LRRA.  Estimated Cost would be $150,000.00 to file and pursue the case in federal court, not necessarily to include appellate review at the federal 11th Circuit level, and potentially before the Supreme Court.

Fundraising will therefore take place in these three tiers, based on development and success of each of the preceding tiers.

On March 31, NRRA sent the attached letter and enclosures to the Senate Appropriations Committee, explaining in detail its opposition to SB516 and how the Bill will, if adopted, potentially eliminate the presently available commercial liability insurance provided to hundreds and probably thousands of Florida businesses.

We would ask that all interested, or potentially impacted members please make immediate arrangements to assist NRRA in its continued opposition effort to this bill by contacting our offices as reflected below.

More on Florida Bill 516

For more information, read a summary and analysis of Florida Bill 516 by the Risk Retention Reporter.

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