Florida Insurance Consumer Advocate’s Personal Injury Protection (PIP) Work Group Convenes First Meeting

Sep 15, 2011


Today, September 15, 2011, Florida Insurance Consumer Advocate (“ICA”) Robin Westcott held the first of a series of roundtable-style meetings on Personal Injury Protection insurance (“PIP”) coverage. 

A recent data call conducted by the Florida Office of Insurance Regulation revealed “unsustainable” loss trends in PIP, a fact emphasized by Florida Insurance Commissioner Kevin McCarty during a meeting of the Florida Cabinet last month. 

The ICA has compiled a variety of interested parties (“Workgroup”) to discuss the benefits and detriments of No-Fault systems, review relevant data regarding trends in PIP claims, and discuss various reform options or alternative insurance products.  Workgroup members included representatives of insurance companies, hospitals, chiropractors, PIP plaintiff lawyers, the Florida Medical Association, osteopathic physicians, fraud investigators and others.

The meeting began with presentations regarding insurance fraud investigations and a review of the PIP data call conducted by the OIR.  Both presentations revealed data that indicates significant abuse and/or fraud in the current PIP structure.  Interestingly, a representative from the OIR stated that, for every dollar insurance companies are taking in PIP premium, they appear to be paying out $1.40 in claims.  This is an “unsustainable” system that is resulting in considerable need for rate increases and a hardening of the marketplace, according to the OIR.  Additionally, roughly 50 percent of fraud referrals made to the Florida Division of Insurance Fraud were PIP-related, whereas PIP premium only represents approximately two percent of all insurance premium in Florida. 

After the initial presentation, the Workgroup members had a lengthy discussion on a variety of problems in the current PIP system.  The most confrontational discussions related to PIP litigation and attorneys’ fees awarded in PIP litigation.  Many insurers pointed to the volume of litigation which, in many circumstances, could be considered to be over “de minimis” monetary amounts, as well as the volume of litigation relating to seemingly clear statutory intent that is poorly worded.  

Insurance representatives stated that, in some cases, the exposure to exorbitant attorneys’ fee awards cause companies to pay or settle claims, which are questionable.  PIP plaintiff attorneys contended that they only get paid when an insurance company should have paid a claim and failed to do so.  The plaintiffs’ attorneys also stated that insurance companies should not be allowed to factor attorney fee awards paid to plaintiff’s attorneys into the rate making process.

Additionally, the Workgroup discussed a variety of issues surrounding medical treatment rendered, utilization protocols and other managed care options. 

At the conclusion of the meeting, the ICA stated that future meetings will focus more on hard data surrounding all of these issues. 

The Workgroup’s next meeting is scheduled for September 26, 2011, in Tallahassee, Florida.


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