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NAMIC Skeptical of Florida's Re-enacted Auto Insurance System

INDIANAPOLIS (Oct. 11, 2007) - Despite concerns about Florida's just-expired no-fault auto insurance law, the system will go back into effect next year. Gov. Charlie Crist today is signing legislation passed during a special legislative session to re-enact the controversial law as of Jan. 1.

"While insurance companies will, of course, do everything to make sure they are in compliance with the changes, we remain concerned the new legislation may not solve the problems that have plagued Florida for years," said Liz Reynolds, Southeast state affairs manager for the National Association of Mutual Insurance Companies (NAMIC). "Fraud, waste, and abuse in the state's auto insurance system were rampant under the law that expired Oct. 1."

The issue has been hotly debated since the 2006 regular legislative session. NAMIC spoke out against Florida's "broken" no-fault auto insurance system during the 2006 and 2007 sessions and joined Floridians for Lower Insurance Costs, a Tallahassee-based coalition of concerned citizens, businesses, and taxpayers who strongly supported the sunset.

The legislation, CS/HB13, includes the following provisions:

• Requires all vehicle owners to have personal injury protection by Jan. 1. Insurers must send premium notices by Nov. 15, to policyholders who do not already have PIP coverage.
• Provides a fee schedule for PIP benefits.
• Limits the health care providers that must be reimbursed under PIP.
• Provides additional time for PIP insurers to respond to a demand letter for payment before a suit may be filed.
• Requires insurers to reserve $5,000 of benefits for 30 days for physicians providing emergency services or care or inpatient hospital care.
• Requires that all PIP claims related to a single provider for the same injured person be joined in a single lawsuit.
• Makes it an unfair trade practice for an insurer to refuse to pay valid claims as a general business practice, and allows the attorney general to investigate and initiate actions, in addition to the Office of Insurance Regulation.

With Florida's previous no-fault law expiring earlier this month, companies had already taken steps to provide notice to policyholders and make appropriate coverage and rating changes in anticipation of the sunset.

"We are way past an eleventh-hour decision," Reynolds said. "This is more like a thirteenth-hour decision, and it has created confusion for customers and additional expense, programming, and resource issues for companies."

For further information, contact
Nancy Grover
(202) 628-1558 Tel
(202) 628-1601 Fax
ngrover@namic.org