Charlie Crist's Morgan and Morgan Problem

If Charlie Crist wants to run for governor it would be best that he unattached himself from Morgan and Morgan. The law firm has been accused by State Farm of overbilling.

A former paralegal at Morgan and Morgan turned into a whistleblower last fall and gave State Farm information to investigate the billing practices of Dr. Ara Deukmedjian, the president of the Brevard County Medical Society, with regards to his dealings with the law firm, according to the Orlando Sentinel.

State Farm is accusing Morgan and Morgan of filing bogus medical claims in auto accidents.

Central to the allegations: Orlando-based Morgan & Morgan, which considers itself the nation's largest personal-injury law firm; Dan Newlin, a 10-year Morgan & Morgan lawyer who left the firm late last year to open his own office; Dr. Ara Deukmedjian, president of the Brevard County Medical Society and a volunteer assistant professor of neurosurgery at the University of Central Florida School of Medicine; and State Farm Mutual Automobile Insurance Co., the nation's largest auto insurer.

In 2011, a former female Morgan and Morgan employee sued for sexual harrasment. The employee accused the law firm of sexual battery.

Morgan and Morgan have a C+ rating with the Better Business Bureau. The BBB has closed three complaints with Morgan and Morgan in the last 12 months.

There is also the infamous penis incident.

A U.S. District Judge in Miami has tossed two attorneys from the famed “Morgan & Morgan – For the People” law firm from a case after the opposing counsel complained that, one of the lawyers drew pictures of male genitalia and unashamedly played Angry Birds during depositions, the blogs miaminewtimes.com reports.

Richard Celler and Stacey Schulman, representing a class action complaint against Ventura Limousine & Transportation Services, Inc., were the two lawyers booted from the case. The Limo company allegedly violated the Fair Labors Standard act, and an ex-employee had enlisted the services of the mega law firm, Morgan & Morgan.

Morgan and Morgan is a serious liability for Crist.

Rick Scott Signs SB 408

Gov. Rick Scott's office has been flooded with emails and phone calls urging him to not sign SB 408. Florida Sen. Mike Fasano said homeowners would see their insurance increase if Scott signed the legislation.

“On behalf of the constituents I represent, and all homeowners in Florida, I am disappointed that this bad piece of legislation has been signed into law,” Senator Fasano states. “For an administration which vowed not to support new taxes or fees, this bill virtually guarantees a 15% premium “reinsurance” increase for Florida policy holders. This is a backdoor tax and fee increase that will hurt most homeowners with a mortgage, consumers and small business owners at a time with very high foreclosure and unemployment rates, all during a fragile economic recovery.”

Of course, Scott signed SB 408.

When Florida Gov. Rick Scott signed SB 408 today, he said, “A healthy, stable and competitive private insurance market is critical to the success of Florida, given the hazards we face. I commend the Florida Legislature, especially Sen. Richter and Rep. Wood, for bringing this important legislation forward.”

The new law allows insurers to raise rate without the approval of the Florida legislature. Homeowners will have to pay for their own repairs before insurance companies will offer reimbursements. If you can't pay for your own repairs then insurance companies won't reimbursement. Homeowners previously were allowed five years to file a claim. The new law shortens the time to three years.

The man who pushed for this legislation is Mark Wilson, president of the Florida Chamber of Commerce.

“Despite what the critics say, signing this bill into law is the first step toward stabilizing Florida’s property insurance market. It will increase competition by attracting insurance companies that currently do not write property insurance policies in Florida,” said Mark Wilson, president Florida Chamber of Commerce.

Wilson fails to mention the 15 percent cost increase homeowners will likely face yearly. Insurance companies claim that they are losing money. Fact: State farm made $2.6 billion profit during the past decade. State Farm is involved with the offshore company DaVinci Reinsurance Ltd. Since DaVinci is not based in the Florida it can charged the highest rates. State Farm claims not to own DaVinci. Yet DaVinci has picked up its clients from State Farm and refuses to disclose who is on its board. A Google Map search of DaVinci's Burmurda address reveals it to be located at a yacht club.

The insurance industry isn't hurting in Florida. They are rigging the system to its advantage.

J.D. Alexander Hearts Insurance Companies

Gary Fineout has this tweet informing us who Florida Senator JD Alexander's real constituents are.

First hearing on major insurance bill gets testy. Sen. Alexander goes after insurance consumer advocate, says state has "suppressed" rates

Nothing could be further from the truth. State Farm of Florida stopped selling homeowners insurance when former Gov. Charlie Crist cracked down on homeowners insurance price fixing. In 2009, State Farm attempted to raise homeowner insurance rates by 47.1 percent. Insurance Commissioner Kevin McCarty rejected State Farm Florida's request. State Farm dropped all homeowner insurance policies and gave their customers 90 days notice. Florida and State Farm of Florida came to the compromise of a 14.8 percent rate increase.

Except State Farm never got out of Florida homeowner insurance business. State Farm of Florida set up the virtual offshore company DaVinci Reinsurance Ltd in Bermuda in 2001. Virtual means DaVinci Reinsurance Ltd has no actual office. The Bermuda adrress is a yacht club. DaVinci Reinsurance Ltd is able to get around Florida regulations by being an offshore company. DaVinci can set whatever price the company wishes. DaVinci underwrites homeowner insurance claims for several Florida insurers.

During the past decade State Farm of Florida 2.6 billion profit. J.D. Alexander's claim that regulators are being too tough on the insurance industry doesn't pass the laugh test.

State Farm FLA Connection to DaVinci Reinsurance Ltd

Remember when Gov. Charlie Crist cracked on on State Farm Florida for raising their homeowner premiums too high. State Farm dropped customers and sued the Florida government. It turns out State Farm was far worse than we imagined.

The Sarasota Herald Tribune did an investigative story on State Farm. After State Farm Florida stopped selling homeowners insurance in Florida they set up with the shell company DaVinci Reinsurance Ltd. in Bermuda. State Farm gave DaVinci Reinsurance Ltd. $200 million in startup money. DaVinci Reinsurance Ltd is a "virtual corporation" with no real presence in Bermuda.

According to Bloomberg Businessweek DaVinci Reinsurance Ltd. operates in the Renaissance House at the address 12 Crow Lane Pembroke, Bermuda. According to Google Maps the address isn't correct. The Renaissance House is on E. Broadway, just off of Crow Lane. There are a lot of boats around the Renaissance House. It is hard to tell from the satellite photo if any offices are in the building.

State Farm Florida leaves the state. Citizens Property Insurance can not afford to provide insurance policies to every homeowner. The result is a market for DaVinci Reinsurance Ltd. The catch is DaVinci Reinsurance Ltd. charges the highest premiums in Florida. DaVinci Reinsurance Ltd. is excempt from Florida insurance regulations since the company is technically not based in the United States.

Another interesting fact is DaVinci Reinsurance Ltd. went after State Farm customers after the insurer dropped policies for many coastal homeowners. The Sarasota Herald Tribune has a chart DaVinci Reinsurance Ltd. homeowner insurance sales increasing has State Farm was losing policies.

State Farm Florida doesn't want to talk about it's ties to DaVinci Reinsurance Ltd.

A spokesman for State Farm responded to questions from the Herald-Tribune with a two-sentence statement.

"Reinsurance exists to help insurers protect homeowners from major catastrophes," wrote spokesman Phil Supple. "In this instance, State Farm is simply an investor and not actively involved in this reinsurer's underwriting decisions."

State Farm Florida claims not to own DaVinci Reinsurance Ltd. If that is true then why aren't the names of DaVinci's directors public. The Sarasota Herald Tribune asked State Farm Florida for the names of the directors. State Farm Florida refused to released that information. In truth, State Farm Florida owns a 40 percent share and sits on the board of DaVinci Reinsurance Ltd.

How DaVinci Reinsurance Ltd. works is they are a reinsurance company. DaVinci is a third party company that sells coverage to insurance agencies which, in turn sell to the public. DaVinci Reinsurance Ltd. targets high-risk hurricane properties. In 2005, Florida insurance policies were made up 23 percent of DaVinci's revenue. That number climbed to 41 percent by 2009.

Meanwhile, State Farm Florida told the Florida legislature they would lose money if they covered at-risk homeowners in a hurricane state. Florida Sen. Mike Fasano breaks down State Farm Florida's sales pitch to the legislature.

"State Farm has done a good job, an excellent job, in pulling the wool over the eyes of many of my colleagues in the House and Senate," said state Sen. Mike Fasano, a Pasco County Republican and a critic of State Farm.

"They've convinced them that State Farm is poor and they're losing money and the Legislature is willing to come to their rescue."

The Florida legislature responded by giving into State Farm Florida's demands.

Side note: the Sarasota Herald Tribune has done some excellent investigative reporting lately and deserve praise. Bloggers like to carp about how bad the media is. Credit should be given when the media gets scoops on important stories. Excellent job by Paige St. John and the Tribune staff.

Like A Bad Neighbor State Farm Is Not There

Earlier this month, Insurance Commissioner Kevin McCarty rejected State Farm Florida's request to raise homeowners insurance 47.1 percent. State Farm Fl decided to drop all Florida property insurance policies. It will take State Farm two years to end all policies. The Office of Insurance Regulation has 90 days to approve the plan.

Florida leaders have reacted angrily to State Farm's announcement. McCarthy subpoenaed State Farm. The subpoena is a fishing expedition into any manner of State Fam documents. State Farm is certain to fight the subpoena.

Gov. Charlie Crist maintains his my-way-or-the-highway stance.

"They probably charge the highest rates in the state anyway," Crist said. "Floridians will be much better off without them." The problem with Crist's statement is he doesn't have a back up plan. Citizens Property Insurance has $3.6 billion on-hand. The Cat fund: $2.8 billion. Sen. Mike Fasano, R-New Port Richey, wants to stop State Farm from leaving. Florida House Speaker Ray Sansom is convening a meeting State Farm representatives. My fear is Crist does nothing.

State Farm Fl is the largest property insurance insurer in the state. Citizens Property Insurance can not absorb those policies. Either Crist courts private insurers into Florida or he gives in.

Update: Fasano is sponsoring legislation prohibiting State Farm from selling auto insurance, if State Farm no longer seels property insurance. Crist has voiced his approval of the pending bill. I am no fan of State Farm, but what happened to Republicans' Laissez-faire economic principles?

State Farm to Drop 50,000 Homeowner Policies

I'm disappointed, but not surprised that State Farm is going to drop 50,000 homeowners policies. Governor Charlie Crist temporarily freezed property insurance. The industry responded by suing the state. Homeowner insurance companies view Florida as a financial loser. State Farm will drop the policies starting Jan. 1, 2008. Many coastal homeowners will have to search for new insurance. Other inland homeowners are also affected.

Florida government appears to be playing tough with State Farm.

"If State Farm reduces exposure in Florida through the non-renewal of property insurance policies, the Office of Insurance Regulation will revisit State Farm's rates to ensure they are not excessive," Florida Insurance Commissioner Kevin McCarty said.

Short answer: if State Farm doesn't want state government looking into their rates then they better increase homeowner coverage. McCarty is not finished with State Farm.

"These actions are inconsistent with State Farm's previous statements outlining their underwriting intentions," McCarty said in a statement released by his office. "The office is in the process of reviewing these filings to ensure they are consistent with Florida law."

The South Florida Business Journal reports that McCarthy's comment might mean that he will not allow any of the policies to be cancelled.

CFO Alex Sink described State Farm as having "disregard for long-standing customer relationships."