More than 100 Insurance Companies File on First No-Fault Deadline
Around the State
More than 100 auto insurers have filed to meet the requirements of sweeping legislation aimed at reducing fraud in personal injury projection coverage, the Office of Insurance Regulation announced.
Monday was the deadline for insurers to meet the 10 percent reduction in the no-fault coverage or offer an excuse why they couldn’t.
“Today marks the culmination of a long chain of events aimed at fighting PIP fraud,” Florida Insurance Commissioner Kevin McCarty stated in a release.
“It began when the office conducted a PIP data call that identified a dramatic increase in PIP claims and PIP-related lawsuits from 2006 to 2010. With the support of the governor and Florida Legislature, together we crafted language to address these cost drivers, which resulted in the passage of HB 119 to fight PIP fraud. Although it initially appears the savings will result in a mitigation of rate increases rather than actual rate reductions for most companies -- it does represent a major shift in the trajectory of PIP insurance rates in Florida.”
The companies will have to come up with 25 percent cuts by Jan. 1, 2014.
Backed by Gov. Rick Scott and Chief Financial Officer Jeff Atwater, the change was enacted because fraud in the system had become so rife that premiums in Florida had grown by $1 billion, officials said, and unless dramatic and decisive action was quickly taken, the costs would continue to skyrocket.
Eight filings have already been approved reflecting savings from the bill:
|Company/Group||Company Indicated PIP Change Without HB 119||Selected/Approved PIP Change|
|Florida Farm Bureau||At least +45%||+8%|
|MGA Ins. Co. (Renewal Only Program)||+15.4%||+3.9%|
|MGA Ins. Co. (Personal Auto Program)||+16.1%||+3.9%|
|Agency Ins. Co.||+60.9%||+26.3%|
|United Fire and Cas. Co.||+7.2%||-15.2%|
|Hartford Ins. Co. of the Midwest (Renewal Only – AARP)||-4.7%||-15.4%|
|Philadelphia Ind. Ins. Co. (Collector Vehicle Program)||N/A||-10%|
|United States Liability Ins. Co. (Antique Auto)||N/A||New Program|
Not everyone is pleased with the law.
Besides those the state says have used the coverage for fraud, a group of chiropractors, massage therapists and acupuncturists have already filed a lawsuit contesting the law.
Among the changes to the coverage, legislators said they targeted the means for fraud to propagate by having the coverage no longer pay for massage or acupuncture treatments.
The new law is also directed at reducing fraud by dropping the cap on the low-cost coverage from $10,000 in all cases to $2,500 for non-emergency treatment.
The law also gives insurers 90 days to pay claims and an organization within the Division of Insurance Fraud would be created to combat motor vehicle insurance fraud.
Reach Jim Turner at email@example.com or at (772) 215-9889.