Jeff Atwater Confident ‘No Fault’ Reform Law Works

By: Jim Turner | Posted: November 29, 2012 10:45 AM

Chief Financial Officer Jeff Atwater expressed confidence on Thursday that barring any successful court challenge, "no-fault" auto insurance will not only reach the 25 percent reduction benchmark sought, but eventually exceed the number.

Atwater, speaking at the Florida Chamber of Commerce’s Insurance Summit at Disney’s BoardWalk Inn, said he’s confident that the legislative effort will work because the factors that allowed fraud to drive up premiums will be slowed.

Jeff Atwater at Florida Chamber of Commerce Insurance Summit

Florida CFO Jeff Atwater at Florida Chamber of Commerce Insurance Summit

“I am comfortable that if the assaults in the courts are unsuccessful, and the bill can stand, there will be more than 25 percent savings,” Atwater said.

“We don’t have to gnash about it, argue about it, whine about it or cry about it.”

Atwater said that nearly 70 percent of the cost in claims prior to House Bill 119 becoming law last spring was eliminated because the coverage no longer includes non-emergency massage therapy and acupuncture treatment.

The new law also drops the cap on the low-cost coverage from $10,000 in all cases to $2,500 for non-emergency treatment.

In September, the Florida Chiropractic Association filed a constitutional challenge against the law in Leon County Circuit Court.

The insurance reform effort was strongly supported by Atwater and Gov. Rick Scott.

“How could it be that in a system that was supposed to be really legal-system-free, attorney fees were up? It was fraud, it was abuse,” Atwater said.

“The question was how long could we let it go?”

Atwater added that markets should be allowed to determine the rates, but because of the fraud the legislative action was required.

The new law required insurance companies to cut the rates on the no-fault (personal injury protection) portion of coverage by at least 10 percent starting Oct. 1 or demonstrate why they couldn’t. A second filing, where rates are expected to drop 25 percent, is Jan. 1, 2014.

Florida Office of Insurance Regulation Director Sandra Starnes said Wednesday that several companies were approved for increases after they were asked to come in with 10 percent reductions after Oct. 1 because the new rates wouldn’t have been deemed adequate for the coverage.

The law was designed because officials said crashes were being staged in such mass quantity in the Tampa and Miami markets in order to quickly recoup the no-fault $10,000 coverage through scam massage and medical services.

The fraud had become so rife that premiums in Florida have grown by $1 billion, officials said, and unless dramatic and decisive action was quickly taken, the costs would continue to skyrocket.

According to state records as of Nov. 16, of the 44 rate filings that have been approved, the average change has been a decrease of 2.5 percent. But approvals have ranged from a negative 25 percent to as high as 41.5 percent.

The big savings is still expected after Jan. 1, when the law fully kicks in, but some chiropractors, who may no longer be eligible to receive the full $10,000 payments for those seeking post-crash treatment, are challenging the law in court.

Steve Lehmann, a consulting actuary with Pinnacle Actuarial Resources Inc., said the projected adjusted rates did factor in the state’s litigious environment.

Reach Jim Turner at or at (772) 215-9889.

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