NU Online News Service, May 04, 2:49 p.m.EDT

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Florida Gov. Rick Scott has signed what the industry is callingthe “most significant auto insurance law in decades.”

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Scott signed HB 119, which aims to mend the state's brokenno-fault, personal injury protection (PIP) system—a system theinsurance industry for years has said is plagued by abuse andfraud, costing Floridians more than $1 billion annually.

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Samuel Miller, executive vice president of the Florida InsuranceCouncil, says the new law is the most substantial one in decadesbecause it will “reduce fraud and eventually bring down autoinsurance rates.”

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With pen in hand, Scott was flanked today by Insurance Consumer Advocate Robin Westcott and InsuranceCommissioner Kevin McCarty at the Northeast Florida LawEnforcement Training Criminal Justice Center in Jacksonville,Fla.

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While letting out what seemed like a collective sigh after along and hard-fought battle, the industry roundly praised themeasure—which looks to reduce frivolous lawsuits, reduce stagedaccidents and shut down fraudulent medical clinics.

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The American Insurance Association (AIA), like other industryrepresentatives, says stopping PIP fraud has been one of its toppriorities. Ray Farmer, Southeast regional vice president for AIAsays the association is “pleased that policymakers addressed thiscrucial issue and accomplished this important milestone for Floridamotorists.”

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The PIP debate “was a tumultuous fight,” says Paul Blume, seniorvice president of state government relations for the PropertyCasualty Insurers Association of America (PCI). But the industryhad strong backing this year in the governor, insurancecommissioner and Chief Financial Officer Jeff Atwater.

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With the new law, “Florida will release the chokehold that fraudhas on Florida's insurance consumers,” says a statement fromAtwater, who acknowledges the contribution of bill sponsors Rep.Jim Boyd, R-Bradenton, and Sen. Joe Negron, R-Stuart. “The road toreform was a long and challenging one.”

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Miller and Blume say HB 119 did not contain everything on theindustry's PIP-reform wish list, but it is a “significant stepforward to address systemic cost-drivers after many years oframpant auto fraud in Florida's no-fault system,” says Blume in astatement.

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HB 119 requires claimants to seek treatment within 14 days of anaccident from a hospital or physician. The bill bans treatmentsfrom acupuncture and massage facilities.

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The bill also limits attorneys' fees, establishes stiffpenalties for doctors who commit fraud, and requires that claimantssubmit to an examination under oath from insurers.

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However, insurers in the Sunshine State remain wary of other provisions in the new law. An outside consultantwill be examining the predicted savings to insurers, and insurersare instructed to make a rate filing by Oct. 1. The filing mustinclude a 10 percent rate reduction, or it must include a detailedexplanation of why the mandated reduction was not met.

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