Key Insurance Issues Remain Unresolved as Session Progresses
As the Florida legislature enters the final few weeks of the 2017 regular session, several important insurance issues remain unresolved. One of the most prominent insurance issues in need of a legislative solution is the “assignment of benefits” issue. Insurance Commissioner David Altmaier, Citizens Property Insurance Corporation chief executive officer Barry Gilway, and a number of insurance company representatives have demonstrated that losses have increased, and will continue to increase, due to the number of claims with assignments of benefits they are handling. In particular, by taking an assignment of policyholders’ rights, commercial third parties are suing insurers in increasing numbers. The increased costs to insurers ultimately will be passed on to policyholders, which the Florida Office of Insurance Regulation estimates will result in rate increases averaging ten percent for the foreseeable future.
While the problems with assignments of benefits have been well outlined, a solution is proving to be elusive. Regulators and insurers are skeptical that any legislative proposal can be successful if it doesn’t address the one-way attorneys’ fee issue. However, the legislature thus far has shown itself to be reluctant to take up meaningful reform proposals.
The legislature also is working on workers’ compensation proposals as the session heads toward its close. Recent judicial decisions found workers’ compensation benefits or cost limitations to be too restrictive. Eliminating those cost saving provisions created immediate upward pressure on rates, resulting in rate increases averaging 15%. To negate these rate increases, the legislature must come up with cost saving measures that don’t result in an unconstitutional impairment of benefits as the courts found in recent cases.
Finally, the fate of Florida’s no-fault auto insurance law (PIP) has received significant attention in recent weeks. The legislature is weighing proposals that would replace PIP with mandatory limits for traditional auto insurance, with one of the primary differences of opinion relating to whether the mandated auto insurance should include mandatory medical payments (med pay) coverage. Some opponents of the proposed reforms argue that eliminating PIP will simply shift costs from the auto insurance market to the health insurance and healthcare sectors.