October 1st was the deadline for Florida automobile insurers to submit a rate filing showing at least a 10 percent decrease in insurance rates. If they can’t meet this reduction, then they must explain why not. The premise behind the new PIP law change, according to Gov. Scott, was to reduce “fraud” in the system, decrease litigation, and thereby lower the rates for everyone. The first real test is whether the insurance companies actually do lower their rates, or, notwithstanding the new law, continue with the same or higher rates into the future. Some insurance companies such as Florida Farm Bureau Insurance Company, MGA Insurance Companies, and Agency Insurance Companies have already requested rate increases instead.
At a recent legal seminar the speakers all agreed that based on the poorly worded new legislation, there will be an increase, not a decrease, in litigation. There are already newly filed lawsuits contesting the constitutionality of the new statute by acupuncturists and massage businesses that were barred from getting insurance benefits by billing PIP insurance. Regulators have been urged to closely review each filing to make sure that all rate increases are fully justified, however, there is no clear standard for what a “justified rate increase” would be in the new law. On January 1, 2013 regulators will be called to reduce their rates by 25 percent, but similar filings for “justified rate increases” are likely to result.
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