5/4/2012
By: Chad Hemenway
PropertyCasualty360.com
Florida Gov. Rick Scott has signed what the industry is
calling the “most significant auto insurance law in
decades.”
Scott signed HB 119, which aims to mend the state’s
broken no-fault, personal injury protection (PIP)
system—a system the insurance industry for years has
said is plagued by abuse and fraud, costing Floridians
more than $1 billion annually.
Samuel Miller, executive vice president of the Florida
Insurance Council, says the new law is the most
substantial one in decades because it will “reduce fraud
and eventually bring down auto insurance rates.”
With pen in hand, Scott was flanked today by
Insurance Consumer Advocate Robin Westcott and Insurance
Commissioner Kevin McCarty at the Northeast Florida
Law Enforcement Training Criminal Justice Center in
Jacksonville, Fla.
While letting out what seemed like a collective sigh
after a long and hard-fought battle, the industry
roundly praised the measure—which looks to reduce
frivolous lawsuits, reduce staged accidents and shut
down fraudulent medical clinics.
The American Insurance Association (AIA), like other
industry representatives, says stopping PIP fraud has
been one of its top priorities. Ray Farmer, Southeast
regional vice president for AIA says the association is
“pleased that policymakers addressed this crucial issue
and accomplished this important milestone for Florida
motorists.”
The PIP debate “was a tumultuous fight,” says Paul Blume,
senior vice president of state government relations for
the Property Casualty Insurers Association of America
(PCI). But the industry had strong backing this year in
the governor, insurance commissioner and Chief Financial
Officer Jeff Atwater.
With the new law, “Florida will release the chokehold
that fraud has on Florida’s insurance consumers,” says a
statement from Atwater, who acknowledges the
contribution of bill sponsors Rep. Jim Boyd,
R-Bradenton, and Sen. Joe Negron, R-Stuart. “The road to
reform was a long and challenging one.”
Miller and Blume say HB 119 did not contain everything
on the industry’s PIP-reform wish list, but it is a
“significant step forward to address systemic
cost-drivers after many years of rampant auto fraud in
Florida’s no-fault system,” says Blume in a statement.
HB 119 requires claimants to seek treatment within 14
days of an accident from a hospital or physician. The
bill bans treatments from acupuncture and massage
facilities.
The bill also limits attorneys’ fees, establishes stiff
penalties for doctors who commit fraud, and requires
that claimants submit to an examination under oath from
insurers.
However, insurers in the Sunshine State remain
wary of other provisions in the new law. An outside
consultant will be examining the predicted savings to
insurers, and insurers are instructed to make a rate
filing by Oct. 1. The filing must include a 10 percent
rate reduction, or it must include a detailed
explanation of why the mandated reduction was not met.