PIP Decision Creates Uncertainty in Final Weeks of Session
Leading into the 2013 legislative session, the most prevalent question relating to Personal Injury Protection (PIP) coverage was whether insurers’ rate filings were meeting the levels of savings lawmakers anticipated. However, that changed when Circuit Judge Terry Lewis found that last year’s PIP reforms improperly limit the remedies available to injured persons. Although the state has appealed the ruling, resulting in a stay of its effect, the future of PIP in Florida is again at the forefront of insurance discussions in Tallahassee.
Senator David Simmons of the Senate Banking & Insurance Committee recently commented that eliminating PIP in favor of bodily injury coverage requirements might be the preferred course. He points out that most policyholders already have adequate bodily injury limits, so going to a BI-based system instead of PIP might be more cost effective for consumers. He mentions that bodily injury claims involve proving both fault and damages, which will help reduce the problems that have arisen in the no-fault environment. Of course, opponents of that concept point out that the PIP system is intended to reduce the litigation that is found in systems based on bodily injury coverage. Countering that point, the no-fault system has become a rarity across the country.
Representative Bryan Nelson, on the other hand, recently advocated a wait-and-see approach in the current session. With just four weeks remaining in this year’s session and the legal process still pending, Nelson suggested that lawmakers should see how things shake out, study the issue, and address any needed changes in the 2014 session. Chief Financial Officer Jeff Atwater has taken a similar stand. “Certainly by this time next year we will have known whether the changes we have made are working,” Atwater said. “I feel like we did a really good job in getting cost drivers out and fraud out so honest people can get a fair and better price, and I’d like to see it played out.
CFO Atwater was a supporter of the 2012 PIP reforms, as was Governor Rick Scott. Governor Scott said after Judge Lewis’ ruling that the state is committed to the fight to retain the benefits of last year’s PIP reforms. One thing is certain– the recent ruling has accelerated that battle and caused PIP to be a more prominent issue in the current session than originally anticipated.