There has been a sudden crash in the PIP bills in Florida – this despite Jeff Atwater being on board. The bill had many supporters in Insurance Commissioner Kevin McCarty, consumer groups, The Coalition Against Insurance Fraud, state insurance organizations, and the Sunshine Alliance to Erase Fraud.
But on the 25th of April, this hard-fought battle came to a halt suddenly and all efforts to curb auto insurance fraud went in vain. With the 9-8 vote the House Health and Human Services Committee managed to defeat the merged HB 967 as well as HB 1411 legislation that was designed to curb the fraudulent claims in auto insurance which cost policyholders in Florida $1 billion a year collectively.
All of this has happened despite CFO Atwater testifying just a day before in front of the House Committee that the auto insurance rates would go up by another 30% if the state does not put not put any effort to curb the fraud.
The last scheduled committee hearing was adjourned on the 25th of April without acting on SB 1694 and SB 1930 which are versions of the PIP bills. On April 12, the Senate Banking and Insurance Committee had approved SB1930 with a 7-4 vote and SB1694 with a 6-5 vote.
Despite the fact that the bills had encountered some hurdles as they moved from one committee to another, the proponents of the bill were optimistic that the lawmakers would look into the data of the studies conducted with regard to the cost to insurers and consumers and would change their mind.
Following the actions on Monday, Florida Insurance Council Executive Vice President Sam Miller, stated that these developments were very disappointing. He was hopeful that these developments will help bring down auto insurance rates. Miller also mentioned about the fraud in the PIP clinicswhich were costing honest customers over $1 billion each year. There were people who were making millions on these frauds and were trying hard to defeat these bills, he stated.
A study conducted on the auto insurers by the Florida Office of Insurance Regulation has revealed that the PIP claims that were closed had risen to 40% between 2006 and 2010, while the payouts by the insurance companies had risen to 66%. The study also revealed that between 2008 and 2010 the number of medical procedures on an average (those associated with the PIP claims and billed by medical clinics) had risen to 173%.
