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Atwater wants insurers to divulge more information about claims

Christine Jordan Sexton, Florida Tribune

11/2/2011

Although he is sympathetic to many of the insurance companies arguments on personal injury protection (PIP) fraud, Chief Financial Officer Jeff Atwater said he'd give the insurance industry a failing grade for its communication skills.

Atwater said the insurance industry -- which is pushing to limit attorneys' fees and implement utilization schedules and require clinics to be licensed -- needs to be forthcoming with claims information that will underscore the reasons they are pushing ahead with their agenda to change the state's no-fault auto insurance law.

"I would be suspect as to why somebody wouldn't give me the information to help the cause of their customer. This is their customer," Atwater said. "If it's that big of a concern, just show it to me."

Insurance Consumer Advocate Robin Westcott made a lengthy presentation to the Cabinet -- which includes Atwater -- on the PIP experience in Florida.

Westcott, who assembled a PIP working group this fall, said during her presentation that several times they had solicited claims information from insurance companies so the group could get an understanding of claims costs insurers were paying, including legal fees But, she said, for the most part no information had been submitted to date. She said she was hopeful that it would be coming within in the next month to 45 days.

Atwater said legislators should have all information in order to make "bold" changes to PIP.

"I think the legislators should have all the information when they go down this path," Atwater said, adding that changes to the system need to be "big and it needs to be bold. And they should be armed with the information to do it."

Meanwhile, Westcott showed the Cabinet a powerpoint presentation that indicated the amount of fraud in the PIP system annually totals $910 million. To reduce those costs, Westcott told the Cabinet that the legislature should focus on four areas: providers and venue; overutilization; electronic filing; and litigation.

Atwater also said that there should be no exemptions for PIP clinic registration requirements, including clinics owned by doctors.

The fate of personal injury protection -- and whether it's fixed or "flushed" -- is expected to be the No. 1 insurance issue of the 2012 session. Westcott assembled a group of lobbyists, insurance executives and consumer advocates in an attempt to ferret out problems.

Florida requires drivers to have $10,000 of personal injury protection, which compensates persons injured in accidents regardless of fault and property damage insurance. Personal injury protection coverage provides reimbursement for 80 percent of reasonable medical expenses, 60 percent of loss of income and 100 percent of replacement services, for bodily injury sustained in a motor vehicle accident without regard to fault.

The property damage liability coverage must provide a $10,000 minimum benefit. A $5,000 death benefit is also provided.

Westcott said if the Legislature makes changes to PIP to reduce fraud and better control the costs, insurance companies should lower their rates within one year. If they don't, she said, the Legislature should scrap the system because the costs would have outweighed the benefits for the average consumer.