Early returns show mixed results for PIP law as chiropractors sue

Oct 1, 2012

The following article was published in The Florida Current on October 1, 2012:

Early returns show mixed results for PIP law as chiropractors sue

By Gray Rohrer


A slew of measures in a new law aimed at reducing Florida’s no-fault, or personal injury protection (PIP) insurance, returned mixed results Monday, the final day for auto insurers to file for new rates in 2013.

The Office of Insurance Regulation received more than 100 filings, most of them within the past 10 days. The office has approved eight new rates – four with increases in PIP premium, three with decreases, and one new rate for United States Liability Insurance Co., which had no prior PIP rate.

The news is disappointing to drafters of HB 119, the law championed by Gov. Rick Scott and passed by lawmakers this year. The law contains provisions aimed at cutting out fraud and reducing the cost of claims: cutting out massage therapists and acupuncture practitioners from claims, capping non-emergency care at $2,500 and limiting chiropractic care to the same amount, and requiring policyholders seeking claims to submit to examinations under oath.

Part of the law calls for insurers to reduce the PIP portion of their auto insurance rates by 10 percent, or provide a detailed explanation for why they won’t. So far, at least four companies have done so, receiving approval from OIR for increased PIP rates. Agency Insurance Co. has received the largest rate increase so far, a hike of 26 percent for the PIP portion and a 61 percent overall increase in premium.

Two other companies, however, have received PIP rate decreases of more than 15 percent — United Fire and Casualty Co. and Hartford Insurance Co. of the Midwest.

Sen. Joe Negron, R-Stuart, the sponsor of the Senate version of HB 119, said he would hold companies accountable for meeting not only the immediate 10 percent rate reduction goal of the new law, but another 15 percent reduction next year.

“If that doesn’t happen I will not stand idly by while consumers are taken advantage of,” Negron said. “I have no interest in reducing costs for the insurance industry and then not passing those savings along to the consumer.”

Negron also said HB 119 wouldn’t have passed without the 10 percent rate reduction provision. The bill passed the Senate on the final day of the legislative session by a 21-19 vote after heavy lobbying from Scott and CFO Jeff Atwater.

But insurance industry groups have cautioned that savings from the new law likely won’t surface until next year. When a report was released in August projecting savings from 14 to 25 percent, the groups warned the savings wouldn’t be realized until next year when some of the law’s provisions take effect.

Complicating the picture further is a new lawsuit filed last month by chiropractic, acupuncture and massage therapy groups challenging the new law’s constitutionality. Insurers think the law may have to be upheld by the courts before serious rate reductions will be seen by consumers.

“I think the PIP lawsuit is unfortunately a great example of what we’re worried about, which is can this (law) get off the ground or are they going to hold it up in the courts,” said Michael Carlson, executive director of the Personal Insurance Federation of Florida.

For Negron, waiting for the courts isn’t enough. He wants the rate reductions sooner rather than later.

“No excuses. There is always going to be a reason not to reduce rates,” Negron said.

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