Florida Residential Deregulation, PIP Litigation Bills Advance

Mar 18, 2011

The following article was published in National Underwriter, Property and Casualty magazine on March 18, 2011:

Florida Residential Deregulation, PIP Litigation Bills Advance

One of several insurance-related bills being mulled by Florida lawmakers would institute flex rating for some insurance lines.

Senate Bill 1330—this year’s attempt at deregulating the residential property insurance market—would allow some insurers to increase rates for personal and commercial residential property up to 15 percent statewide, or up to 30 percent on an individual policy basis, without approval from the Office of Insurance Regulation.

William Stander, assistant vice president and regional manager for the Property Casualty Insurers Association of America, said the bill contains certain conditions.

To take part, insurers cannot buy reinsurance from an optional TICL (Temporary Increase in Coverage Limits) layer of the Florida Hurricane Catastrophe Fund and, over time, insurers will be required to prove that their capital can meet their obligations for a 1-in-100-year probably maximum loss (PML).

Additionally, a flex-rating increase cannot be applied to policies removed from the state’s insurer of last resort, Citizens Property Insurance Corp. Policies that exclude hurricane or windstorm coverage cannot use the expedited rate-filing process.  

SB 1330 has passed the Senate Banking and Insurance Committee by a 6-3 majority and is now with the budget committee.

PIP Fraud Bill Gets Through House Committee

To combat automobile insurance abuse and fraud, HB 967 addresses the legal side of personal injury protection (PIP) in Florida.

Bills in the House and Senate to tackle alleged fraud by medical clinics and staged auto crash rings have been introduced during the session, but HB 967, which was passed by the House Insurance and Banking Subcommittee, looks at the litigation aspect of PIP fraud.

HB 967 allows insurers to use what is known as an examination under oath (EUO) to investigate fraud and conduct an independent medical examination (IME) to determine reasonable treatment of an insured. According to PCI, participants in fraud rings or those following the advice of an attorney involved in a fraud ring “often miss or never go to these appointments in order to keep the crime a secret.”

The measure caps attorneys’ fees to a percentage of benefits obtained. Right now insurers are obliged to pay attorneys’ and the policyholder’s attorneys’ fees if the insurer loses in court. PCI also recommends getting rid of contingency risk multipliers to calculate PIP attorneys’ fees. The practice in Florida basically doubles the amount of money a PIP attorney can make in litigation.

The bill now heads to the Civil Justice Subcommittee.

Find this article here: http://www.propertycasualty360.com/2011/03/18/fla-residential-deregulation-pip-litigation-bills