Mixed reviews follow a private contractor's actuarial report that projects substantial savings for insurers and consumers due to Florida's new Personal Injury Protection (PIP) auto-insurance law.
The study projects PIP claims falling by between 16 and 29 percent, and a reduction in actuarially indicated PIP premiums of between 14 and 25 percent
The report was prepared Pinnacle Actuarial Resources Inc., and funded through a $200,000 appropriation in the law, which was enacted by the state Legislature earlier this year. The majority of provisions go into effect Jan. 1, 2013.
The law is H.B. 119, the Motor Vehicle Personal Injury Protection Insurance.
The R Street Institute, an outside consulting firm based in Washington, D.C. that advises the insurance industry on catastrophe and insurance claims issues, says the report was encouraging.
"It is encouraging to see the actuaries determine that H.B. 119's provisions cracking down on fraud and creating a more transparent process for PIP claims will benefit consumers," said Christian Cámara, R Street's Florida director.
"Given that many of the changes aren't yet implemented and that the law still may face legal challenges and efforts by some to 'game' the system, it's still too early to have a full sense of all the benefits this legislation might provide," he adds.
What does the Florida Office of Insurance Regulation say about the study? Read Here.
But officials of the National Association of Mutual Insurance Companies and the Property Casualty Insurers Association of America voiced caution.
Liz Reynolds, NAMIC state affairs manager, says the report reiterates the positive progress made by the legislature to address the skyrocketing costs and rampant fraud present in the Florida auto insurance system.
"But, as with anything else, reform is not a silver bullet or magic pill, and it won't happen overnight; there's still work to be done, and insurers will be working to implement the changes afforded by the reform legislation to benefit policyholders as quickly as possible," Reynolds says.
Donovan Brown, state government relations counsel for the Property Casualty Insurers Association of America, says PCI has "ongoing concerns with the study's conclusions and the fact that they are based on a law which does not fully take effect until next year."
He adds, "Although we commend Pinnacle for its diligent and thorough work, the study cannot anticipate changes to Florida's legal, social or economic environment which will directly influence the impact of the new PIP law."
The new law requires individuals seeking PIP medical benefits to receive initial services and care within 14 days after the motor vehicle accident from a licensed doctor or hospital.
It also sets definitions of "emergency medical condition," and says an insured can receive up to $10,000 in PIP medical benefits if a doctor says the condition meets this definition.
If not an emergency medical condition, the medical benefit cap is $2,500 under the law.
It also makes changes to the fee schedule, raises the death benefit, sets attorney fees and increases penalties for fraud.
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