Gov. Jeb Bush vetoed legislation yesterday that would haveextended the state's no-fault auto insurance law for an additionaltwo years.

Property-casualty industry lobbyists had urged the governor toreject the bill, arguing that the legislation did not containenough language to properly reform the system.

The bill would have appropriated $1 million to fight insurancefraud and called for simplified crash reports of accidents

The law is now scheduled to sunset October 2007; Florida thenwill return to a traditional tort system for settling autoclaims.

Cecil Pearce, a vice president with the Washington-basedAmerican Insurance Association, said the governor and industryagreed that the no-fault law was not worth saving.

“AIA and others in the industry have for several years urgedlegislators to pass substantive reforms aimed at removing theongoing, growing fraud and abuse from the no-fault's personalinjury protection (PIP) system,” he said.

Otherwise, the true beneficiaries of no-fault continue to betrial lawyers and shady medical providers, and not consumers, headded.

Mr. Pearce said that key reforms necessary to fix the system,such as attorney fee reform and a medical fee schedule, were notachievable this session. “That view turned out to be correct.Instead, the legislature decided to delay the law's effectiverepeal date to January 1, 2009,” he said.

AIA believes a veto override is unlikely despite strong supportfor the bill in the legislature

David Reddick, National Association of Mutual InsuranceCompanies senior state affairs manager, said that, “In vetoingSenate Bill 2114, Gov. Bush has shown us that a courageous leaderisn't afraid to back away from making a tough decision.”

Reddick said the next challenge for insurers will be gettingpolicyholders ready to move to a tort-based system of autoinsurance. Under the current law, renewal notices describing howthe new system will work will begin being sent out thisOctober.

“Educating a generation and a half of drivers who have livedunder the current no-fault system will be a challenge, but one thatour members will be looking forward to,” Reddick said.

Florida lawmakers have amended the law more than 50 times sinceno-fault was first instituted in 1971.

Three years ago, the legislature passed and the governor signeda bill repealing the no-fault law, effective October 2007. With hisveto of SB 2114, the repeal date remains October 1, 2007.

Article updated with additional information 6:55 p.m.