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Politics

Florida Insurance Council to Keep Pressure on Legislators for PIP, Citizens Reform

January 3, 2012 - 6:00pm

Redistricting, gambling and the budget will dominate the coming session, but a leading insurance industry group says pressing issues must also be addressed in auto, home and workers compensation coverage.

The Florida Insurance Council, during a media conference at the Florida Press Center in Tallahassee on Wednesday, outlined its support for a number of bills heading into the 60-day session that begins next week. The council's goals include:

  • Reforming or repealing personal injury protection.
  • Reducing the size of Citizens Property Insurance.
  • Reducing the amount physicians can charge when dispensing prescription drugs in workers' compensation claims.

While the session may be very stressed, and (there are) a lot of competing interests, said Don Brown, of Reinsurance Association of America and Association of Bermuda Insurance and Reinsurers. These issues, we believe, while it may be a long shot to see that they all get addressed, we do believe that its absolutely (necessary) that we advance the dialogue about them so that there can be at least consumer and public information about them so they can know what our situation is.

Brown added that without changes to the industry, each coverage area has the potential to be financially devastating to the state.

CITIZENS PROPERTY INSURANCE

Sam Miller, Florida Insurance Council executive vice president, expects there to be several efforts to reform Citizens in the coming session.

If we dont deal with these issues this year, theyll be around next year, when we dont have reapportionment. Theyre not going to go away, Miller said.

The insurance council would like Citizens to reduce by half or more its 1.5 million policies, including more than 400,000 in coastal areas. Citizens is also the primary source of coverage for mobile and older homes in the state.

The growth is a crisis, Miller said.

The council backs HB 833, by Rep. Bill Hager, R-Boca Raton, and SB 1372, by Sen. J.D. Alexander, R-Lake Wales, which backs up Floridas Hurricane Catastrophe Fund by once again making Citizens the insurer of last resort and raises insurance rates of Citizens' policyholders to be more in line with private insurers.

The bill, based on recommendations of Jack Nickolson, the chief operating officer of the Cat Fund, would reduce the fund's size, from $17 billion in the next fiscal year to $12 billion by 2016. In case of a storm, the bill would shift risk to the insurers by reducing how much the state can pass on to all consumers if the fund cant meet its obligations after an emergency. By comparison, the four hurricanes of 2004 -- Charley, Ivan, Frances and Jeanne -- cost more than $45 billion.

The council also supports HB 245, sponsored by Rep. Jim Boyd, R-Bradenton, and SB 578, by Sen. Garrett Richter, R-Naples, that would allow preapproved surplus lines insurers -- which maintain $50 million in surplus funds and set bond ratings -- to assume policies from Citizens.

PIP

The Insurance Council is backing efforts by Gov. Rick Scott and Chief Financial Officer Jeff Atwater to reform personal injury protection auto insurance, which has seen premiums driven up by $910 million, mostly through staged accidents.

Our position is that the status quo is unacceptable and we have to do something, saidMiller. Some of our companies say, 'Get rid of PIP'; other companies say theyre concerned about what may take its place. So lets reform it.

But if reforms cant be found, repealing the required insurance and replacing it may be needed.

Boyd, through HB 119, has been tapped to spearhead the effort to rein in personal injury protection costs from rampant growth in insurance fraud that has spread from Miami to Central Florida.

Rep. Mike Horner, R-Kissimmee, has proposed HB 1007, which would repeal PIP and replace it with other coverages.

Sen. Joe Negron, R-Stuart, has already started similar review efforts in the Senate.

WORKERS' COMPENSATION

The Florida Insurance Council is backing efforts by Rep. Matt Hudson, R-Naples, HB 511, and Sen. Alan Hays, R-Umatilla, SB 668, that would cap how much medical offices could charge when dispensing medication prescribed by an on-site physician.

We believe the cost ought to be reasonable, said Miller.

Pharmaceutical costs have jumped more than 600 percent in workers' compensation claims when the drugs are dispensed from medical offices.

Hays has estimated the cap, which would put the cost of prescription medication on par with what a pharmacy charges, could save Florida small businesses that pay into the workers compensation system $62 million, through a 2.5 percent rate reduction.

A cap was approved by legislators as part of a larger bill in 2010. But with opposition expressed by medical groups, including the Florida Medical Association and the American Federation of State, County and Municipal Employees, mostly on convenience grounds, former Gov. Charlie Crist utlized a line-item veto on the measure.

Reach Jim Turner at jturner@sunshinestatenews.com or (772) 215-9889.

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