NU Online News Service, Feb. 7, 1:51 p.m. EDT

Florida Insurance Commissioner Kevin McCarty says that if the Florida legislature does nothing to reform the state’s no-fault, personal injury protection auto insurance system, rates will simply continue to increase and lawmakers could be forced to repeal the law.

The commissioner, speaking during a media conference call organized by a group called Put the Brakes on Accident Fraud, says the state is at a “critical crossroads,” and must work to reform the PIP system.

And if nothing gets done this year, McCarty says insures will “continue to be aggressive” with rate increases in order to capture enough premium to pay for a system the insurance industry says is plagued by fraud.

He says it will be up to legislators to decide at which point they will allow rates to rise in a state already engaged in a constant affordability/availability fight in its homeowners’ insurance market.

Eventually, the PIP system will be repealed due to rate increases if nothing is done, he says.

Currently—though the number of drivers has stayed constant and accidents are down—PIP rates are up as costs have skyrocketed.

Though some have called for a repeal of PIP now, McCarty says the state needs to focus on returning PIP to its original purpose by doing things like establishing a reasonable fee schedule, improve an insurer’s ability to investigate claims and limit attorneys’ compensation.

The state’s auto insurance laws need to stop being a “pot of gold for unscrupulous providers and fly-by-night clinics,” McCarty says.

McCarty has joined Gov. Rick Scott and Chief Financial Officer Jeff Atwater on the steps of the Capitol Building to raise the level of awareness of PIP fraud and encourage reform. The message, McCarty says, is getting across. There is a “bold coalition” focused on fixing the problems this year, he says.

For years the industry has alleged fraud by the state’s healthcare clinics, along with outrageous attorneys’ fees and organized staged-accident rings to take advantage of holes in the system. The Property Casualty Insurers Association of America (PCI) asserted in an October 2011 special report on Florida’s no-fault system that false claims have cost the state’s drivers more than $800 million.

The Florida House Civil Justice Subcommittee passed HB 119 late in January. The bill replaces the mandatory PIP, no-fault insurance coverage with “emergency care coverage.”