Florida Reenacts PIP/No-Fault With New 2009 Sunset

The Florida Legislature has just passed legislation reenacting the PIP/no-fault law with no significant changes, except for a new 2009 “sunset” date that the insurance industry worries could lead to major changes in a future session.

But the measure faces a possible veto because it lacks controls over medical costs and attorneys’ fees.

The package contains about $1 million in additional funding to fight PIP fraud and changes what information must be contained in crash reports, measures supported by the insurance community.

Not in the package, however, are key reforms sought by insurers and recommended in a study by the Senate Banking & Insurance Committee last fall, including caps on fees paid doctors, chiropractors and other providers under PIP and caps on attorneys’ fees.

CS/CS/CS/SB 2114 passed the House late Wednesday with no debate and cleared the floor by a 118-1 vote, with Rep. Don Brown, R-DeFuniak Springs, voting against the measure.

Other reforms that had been in negotiated into the bill during weeks of committee hearings were stripped from the bill Monday when its sponsor, Sen. Rudy Garcia, R-Hialeah, amended the reforms out leaving only some of the anti-fraud language and a pushback of the sunset of Florida’s no-fault auto insurance law to Jan. 1, 2009.

Governor Jeb Bush has indicated he might veto a bill that reenacts PIP without a medical fee schedule and attorneys’ fee caps.

Some of Florida’s largest insurance companies will be urging a veto. They are the so-called “repealers” who have contended Florida consumers would be better off with a system directing most auto insurance accident claims to court, instead of what they contend is an expensive, effective plan that is supposed to keep claims out of court, but does not.

“It appeared for weeks that pressure on the Legislature to tackle the hurricane insurance crisis would make it difficult, if not impossible, to reach House and Senate agreement on auto insurance reform,” said Sam Miller, executive vice president, Florida Insurance Council. “This is the end result.

“Whether the governor will veto this bill is unclear,” Miller said. “Even if he does, the Legislature can tackle this issue again during the 2007 session. There is a one-year phase in to repeal of PIP/no-fault in current clear, but the system does not actually go away until Oct. 1, 2007.”

Under the bill, crash reports must now contain information such as the date, time and location of the crash; a description of the vehicles involved; the names and addresses of the parties involved as well as the names and addresses of all drivers and passengers in the vehicles involved.

Additionally, the reports must contain the names and addresses of any witnesses and the name, badge number and law enforcement agency of the officer investigating the crash along with the names of the insurance companies for the respective parties involved in a crash.

To further combat fraud, the bill states that the absence of the information required of crash reports regarding the existence of passengers in the vehicles involved in the crash constitutes a rebuttable presumption that no such passengers were involved in the reported crash.

With a Friday adjournment fast approaching, the Legislature has been unable to reach consensus on a property insurance bill. And with the 2006 hurricane season now less than a month away, lawmakers may find themselves back in Tallahassee next week in special session to deal with the issue if an agreement cannot be reached soon.

The Senate appears ready to soon take up the issue. A series of amendments has been filed to the plan put together in recent weeks by several Senate committees. There are major differences between the Senate plan and the bill from the House, which won approval Monday and was sent to the Senate.

Neither House Speaker Allan Bense nor Senate President Tom Lee are in attendance as the two chambers progress with other legislation. That gives rise to the suspicion that the two leaders are still working behind the scenes to hammer out an agreement on a property bill, as well as other key issues that must be addressed in the last days and hours.

One of the major obstacles that must be overcome is the amount of money that will be budgeted to help offset Citizens Property Insurance Corporation deficits from the 2005 hurricane season. The House has budgeted $920 million while the Senate has budgeted $750 million.

Source: Florida Insurance Council