Florida Passes No-Fault With Changes

The Florida Senate gave final approval today to legislation restoring a legal mandate requiring motorists to carry no-fault personal injury protection insurance.

While the measure–which was sent to Republican Gov. Charlie Crist for his signature–did not include all the items insurance interests pushed for, one industry trade group representative said they were pleased by the reforms it did contain.

Effective Jan. 1, 2008 the bill would replace the no-fault PIP law that expired on Oct. 1.

Drivers are required to purchase $10,000 in personal injury protection, and the legislation contains provisions aimed at preventing fraud–which a state grand jury found was prevalent under the old statute.

The measure was included by the governor in the legislature's special session agenda after pleas by health care operations and a few insurers of high-risk drivers. They argued that without PIP state courts would be burdened with additional lawsuits, and some injured parties might have difficulty paying for treatment.

The bill was first approved in the House today on a 105-4 vote, which was delayed until an amendment was eliminated that would have limited lawyers' fees. It passed the Senate 37-0.

The bill was pushed along by House Majority Whip Ellyn Bogdanoff, R-Ft. Lauderdale. Assembly Speaker Marco Rubio, R-Miami, in writing Gov. Crist urging him to have the bill listed for the special session, said Rep. Bogdanoff had “worked tirelessly” for compromise legislation, managing lengthy deliberations involving House and Senate, Gov. Crist's office, various stakeholders, and legislators from both sides of the aisle.

Julie Pulliam, a representative for the American Insurance Association, said the top reform for insurers is language setting medical fees–including a provision for reimbursement–at 200 percent of the Medicare medical procedures rate.

“That is key because prior to this, insurers were just presented with bills that you had to just pay,” she said. Ms. Pulliam said by setting a fee schedule, there is now some limit on what insurers are required to pay, which “keeps costs more predictable.”

According to a briefing paper from Rep. Bogdanoff, the bill would combat fraud by limiting medical treatments to clinics that satisfied licensing requirements in the bill. It would also give insurers 30 days instead of 15 days to investigate claims.

Ms. Pulliam said that in the past, when an insurer received a claimant demand letter, which said in essence that a suit would be filed unless PIP was paid, they had only 15 days to look into the claim..

Another reform in the measure, she said, is a requirement that plaintiff attorneys consolidate all claims in one demand letter, and cannot blizzard insurers with a succession of letters. “That should cut down on litigation,” she said.

In the interim, before the law takes effect, the only way that way PIP will apply is if both drivers still have PIP on their policy–otherwise the case will go through the tort system, Ms. Pulliam explained.

AIA had opposed any reinstatement of PIP coverage, but “with the handwriting on the wall, so to speak,” AIA decided its course of action was to “work on getting a delayed reinstatement,” Ms. Pulliam said.

Florida Chief Financial Officer Alex Sink said she was happy the legislature had acted and is encouraging Florida drivers “to contact their insurance agents to ensure they have adequate insurance coverage to protect themselves and their assets before the new law goes into effect on Jan. 1, 2008.”