Legislative Update 3/30/2006

Today the Florida Legislature passed a controversial tort reform bill that eliminates the doctrine of Joint and Several liability. The bill passed the Florida Senate today by 27 – 13 vote, and had previously passed the House of Representatives. The bill will now be submitted to the Governor for approval.

In other news, the Senate Banking and Insurance Committee and the House Insurance Committee approved their respective bills relating to the Florida No-Fault law this week. Although the Senate bill and House bill have several different components, both the House and Senate bill contain an extension of the sunset provision and an attorney’s fees provision stating that contingency risk mulitpliers will not apply in lawsuits for personal injury protection insurance (PIP) benefits.

The House bill contains the following additional provisions:

(1) Amends the civil remedy statute to require submission of a 60-day notice letter as a condition precedent to bad faith actions;

(2) Subjects insurers to treble damages if the insurer denies claims or fails to provide an explanation of benefits as a general business practice; also allows attorneys to obtain a multiplier in these specific cases;

(3) Increases the reimbursement levels for emergency services by $10,000;

(4) Requires motorcyclists between the ages of 16 – 20 to acquire medical payment and property damage insurance;

(5) Contains various anti-fraud provisions.

The Senate bill contains the following additional provisions:

(1) Requires the Department of Health to create a list of diagnostic tests deemed “not medically necessary” for PIP benefits;

(2) Increases the number of days an insurer has to respond to a demand letter from 15 days to 21 days;

(3) Increase potential awards to persons reporting insurance fraud;

(4) Requires actions for PIP benefits to be brought in the jurisdiction where an insured resides, where the accident occurred or where the services were performed;

(5) Contains various anti-fraud provisions.

Additionally, both the House and Senate are poised to address property insurance legislation next week. We will continue to monitor these bills as they move through the legislative process and will provide updates accordingly.

Regards,

Katherine A. Scott