Just days after the arrest of 36 defendants in New York City for a scheme that bilked auto insurers out of $275 million, the fight against personal injury protection (PIP) fraud receives yet another boost.

On March 2, the Florida House of Representatives passed HB 119, a bill intended to quell the growing incidence of staged accidents and medical fraud that deplete insurers' profits and consumer wallets.

According to the Florida Office of Insurance Regulation (OIR), direct written premiums now total $2.9 billion, which represents a $500 million uptick in 2011. Lynne McChristian, the Florida representative for the Insurance Information Institute (I.I.I), says this connotes a “business model” that is benefiting PIP fraudsters, not auto insurers.

“Tampa Bay now reports the most staged auto accidents in the state,” McChristian says. “Formerly [that distinction fell] to Miami, until the Florida Division of Insurance Fraud and the National Insurance Crime Bureau intensified efforts in that area. Now the criminal element has moved north. Under the direction of Florida CFO Jeff Atwater, the Division of Insurance Fraud is continuing to put the pressure on those criminals involved in fraud, and there's a lot of it.”

Even though various pockets of the state continue to witness high levels of fraudulent activity, legislative measures have been unsuccessful, with real PIP reform slow in coming.

A 'Do or Die' Proposition?

The passage of HB 119 is a significant stride, but a contentious debate regarding SB 1860, the Florida Senate's own answer to PIP fraud, is underway. With the legislative session closing on March 9, legislators will have to hash out their differences in short order.

“Both Jeff Atwater and Gov. Rick Scott share a passion for reform and have made fighting PIP fraud a top priority,” McChristian says. “With the session ending in less than a week, we are down to the wire. Legislators will need to take special interests into consideration, as well as how reform would affect the bottom line, so there could be some pushback.”

PIP fraud may cost Florida about $1 billion dollars each year, according to some industry estimates. Given the magnitude of the problem, many view SB 1860 as a 'last-ditch' attempt to repair a fatally flawed system.

“Only 12 states have PIP systems in place,” McChristian says. “Ineffective reforms could lead to abolishing PIP altogether.”

Time will tell if the no-fault system can—and should—be saved.

Special Reports /

Florida House Passes PIP Bill; Will Senate Follow?

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