NU Online News Service, March 18, 3:06 p.m.EDT

One of several insurance-related bills being mulled by Floridalawmakers would institute flex rating for some insurance lines.

Senate Bill 1330—this year’s attempt at deregulating theresidential property insurance market—would allow some insurers toincrease rates for personal and commercial residential property upto 15 percent statewide, or up to 30 percent on an individualpolicy basis, without approval from the Office of InsuranceRegulation.

William Stander, assistant vice president and regional managerfor the Property Casualty Insurers Association of America, said thebill contains certain conditions.

To take part, insurers cannot buy reinsurance from an optionalTICL (Temporary Increase in Coverage Limits) layer of the FloridaHurricane Catastrophe Fund and, over time, insurers will berequired to prove that their capital can meet their obligations fora 1-in-100-year probably maximum loss (PML).

Additionally, a flex-rating increase cannot be applied topolicies removed from the state’s insurer of last resort, CitizensProperty Insurance Corp. Policies that exclude hurricane orwindstorm coverage cannot use the expedited rate-filing process.

SB 1330 has passed the Senate Banking and Insurance Committee bya 6-3 majority and is now with the budget committee.

PIP Fraud Bill Gets Through House Committee

To combat automobile insurance abuse and fraud, HB 967 addressesthe legal side of personal injury protection (PIP) in Florida.

Bills in the House and Senate to tackle alleged fraud by medicalclinics and staged auto crash rings have been introduced during the session, but HB 967,which was passed by the House Insurance and Banking Subcommittee,looks at the litigation aspect of PIP fraud.

HB 967 allows insurers to use what is known as an examinationunder oath (EUO) to investigate fraud and conduct an independentmedical examination (IME) to determine reasonable treatment of aninsured. According to PCI, participants in fraud rings or thosefollowing the advice of an attorney involved in a fraud ring “oftenmiss or never go to these appointments in order to keep the crime asecret.”

The measure caps attorneys’ fees to a percentage of benefitsobtained. Right now insurers are obliged to pay attorneys’ and thepolicyholder’s attorneys’ fees if the insurer loses in court. PCIalso recommends getting rid of contingency risk multipliers tocalculate PIP attorneys’ fees. The practice in Florida basicallydoubles the amount of money a PIP attorney can make inlitigation.

The bill now heads to the Civil Justice Subcommittee.