Florida Gov. Charlie Crist signed into law a revised no-fault auto insurance statute today restoring the requirement that motorists carry personal injury protection coverage.
The measure, which does not go into effect until Jan. 1, 2008, takes the place of the original no-fault PIP law that sunset Oct. 1.
Drivers are required to purchase $10,000 in personal injury protection, and the measure contains provisions aimed at preventing fraud–which a state grand jury had found was prevalent under the old statute.
The new legislation was approved Friday by the legislature during special session.
Mr. Crist had no-fault placed on the 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.
Florida Chief Financial Officer Alex Sink, noting the law's January effective date, issued a statement saying that during the next two months she is "encouraging every Floridian to contact their insurance agent or company to ensure they have sufficient coverage to protect themselves and their assets."
Ms. Sink said the reforms in the measure "will better protect Florida drivers, institute cost controls and strengthen our anti-fraud efforts."
Although some insurance trade groups said they were happy to see changes, one organization expressed doubts today about the law's effectiveness.
Liz Reynolds, Southeast state affairs manager for the National Association of Mutual Insurance Companies, said in a statement that NAMIC remains "concerned the new legislation may not solve the problems that have plagued Florida for years. Fraud, waste and abuse in the state's auto insurance system were rampant under the law that expired Oct. 1."
She noted that NAMIC had spoken out against Florida's "broken" no-fault auto insurance system during the 2006 and 2007 sessions and joined Floridians for Lower Insurance Costs, a Tallahassee-based coalition of concerned citizens, businesses and taxpayers who strongly supported the sunset.
Ms. Reynolds said before the no-fault law October expiration, insurers had taken steps to provide notice to policyholders and make appropriate coverage and rating changes in anticipation of the sunset.
"We are way past an eleventh-hour decision," she said. "This is more like a thirteenth-hour decision, and it has created confusion for customers and additional expense, programming and resource issues for companies."
Among changes in the law:
o It provides a medical fee schedule for PIP benefits setting a ceiling tied to a certain percentage above Medicare limits.
o Limits the health care providers that must be reimbursed under PIP to those who meet certain certification criteria.
o Provides additional time for PIP insurers to respond to a demand letter for payment before a suit may be filed.
o Requires insurers to reserve $5,000 of benefits for 30 days for physicians providing emergency services or care or inpatient hospital care.
o Requires that all PIP claims related to a single provider for the same injured person be joined in a single lawsuit.
o Makes it an unfair trade practice for an insurer to refuse to pay valid claims as a general business practice, and allows the attorney general to investigate and initiate actions, in addition to the Office of Insurance Regulation.
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