PIP Battle of Words
Check out the battle of e-mails between Senate Banking and Insurance Chairman Bill Posey and a group funded by the major auto insurers about the potential PIP deal.
From: Allison Jones [mailto:firstname.lastname@example.org]
Sent: Monday, September 24, 2007 6:19 PM
Subject: Don't extend Florida 's broken no-fault system
September 24, 2007
RE: Extending the No-Fault System in Florida
On Friday, September 21, it was reported that an “agreement” had been reached to extend the no-fault system in Florida . This late decision to extend the no-fault system in Florida will only serve to harm Florida ’s insurance customers by creating confusion and potentially increasing auto insurance costs.
This “agreement” provides little in the way of reforms to the no-fault system, and actually includes provisions which may increase the cost of no-fault auto insurance for drivers.
In order to continue the no-fault system, it is not simply a matter of an insurer continuing to operate the same after October 1 as they were before October 1. Extensive work has been performed to comply with the law and prepare for the no-fault sunset, and that work required significant investments in staff time and other resources. This proposed extension of the no-fault system will require insurers to perform additional work to revert to the no-fault system. The following are just a few examples of the activities insurers will need to perform to comply with the terms of this “agreement.”
In accordance with Florida ’s billing requirements, insurers have already sent out millions of renewal notices with the new tort pricing for policies which will renew on or after October 1. A great number of their insurance customers have already recognized the savings, made coverage changes on their policies, and paid their bills. Every one of these customers will have to be contacted and advised of the Legislature’s decision, billed for additional premiums to have PIP coverage added back on their policy, as well as consider the other coverage options they may want to change as a result of the Legislature’s last-minute decision to continue the no-fault requirement.
Insurers have spent significant time reprogramming their automation systems to create new rules for the tort system which will take effect on October 1. All these programming changes will need to be re-worked or backed out of the automation systems, and the no-fault rules restored. These changes will need to be tested for accuracy in a very short time. Moreover, additional rules and programming changes will need to be made to incorporate any changes to the no-fault system the Legislature makes on a prospective basis.
Policy endorsements previously approved by the Office of Insurance Regulation (OIR) will need to be withdrawn and old policy terms added back onto the policy until that time at which the new no-fault coverage will take effect, which will require even more filings or policy endorsements to be approved by OIR.
Customer communications will need to be created and sent out explaining these changes to all policyholders in an effort to educate them about this agreement.
The few changes identified above will require significant investments in time and resources by insurers to talk with their customers, re-program automated systems, and draft, print and mail communications to policyholders. These changes will add up to millions of dollars in extra expenses which will ultimately be passed on to customers in the form of higher auto insurance premiums.
Making this late decision to continue Florida ’s broken no-fault system will force your constituents to pay higher auto insurance premiums by taking away their savings and ability to choose the coverages that best suit their needs.
Florida drivers already pay the sixth highest auto insurance rates in the nation and the proposal set forth could drive those rates even higher and create extensive confusion, chaos and increased costs for insurance customers.
The good news is this doesn’t have to be the case. Short of legislative action, this system will sunset as planned October 1. The means savings for Florida drivers, the elimination of the “Fraud Industry Protection Act,” and a seamless transition to the fault-based system insurers have been planning for and educating consumers about for months.
Floridians for Lower Insurance Costs
Sent: Monday, September 24, 2007 7:26 PM
To: 'Allison Jones'
Subject: You must be kidding???? RE: Don't extend Florida 's broken no-fault system
Dear Ms. Jones,
I have read your inflammatory and derogatory remarks about lawmakers’ decisions to keep PIP, and your allegations that lawmakers are catering to “special interests.”
Fact is, you represent the biggest spending special interest of them all!
You insinuate that the rampant insurance fraud will somehow magically evaporate if PIP sunsets. Fact is that the crooks will not find honest day jobs, they will simply shift to BI, where fraud is much more difficult to detect, investigate and prosecute.
You were quoted in the SUN SENTINEL saying in part, “the proposal does not fix anything,” as though you are better qualified to make such an evaluation than the Statewide Grand Jury which asserted a fee schedule is necessary to combat fraud. Every type of health insurance has a fee schedule except PIP!
You were quoted in the NEWS PRESS saying in part, the proposal “ makes the problems worse and more expensive for drivers .” Fact is one company filed intentions to raise rates for BI over 90% and UM over 80% if PIP is allowed to sunset. Do you really consider increases in excess of over 90% good for consumers?
You were quoted in the PA LM BEACH POST saying in part, “ lawmakers need to focus on what what’s best for consumers .” Fact is, that is exactly what they are doing. It is unfortunate that the special interests you represent obviously are not concerned with best interest of consumers. Do you know why No-fault was enacted? Because the system with which your propose to replace No-fault had the courts jammed with phony lawsuits and consumers’ auto insurance premiums were skyrocketing, similar to the present day property insurance crisis. No-fault was enacted to reduce premiums, which it did for many years. Yes, in the past few years a few crooks have found a way to exploit the system, but the fee schedule and other provisions of the proposal will eliminate much of that.
You were quoted in the MIAMI HERALD in part saying, “ It (PIP) needs several changes that don’t appear to be part of the deal, such as limits on attorneys’ fees.” Most of the litigation should be eliminated with a fee schedule inasmuch as most law suits were over the amount of providers’ fees. If the legislature takes reforms to the extremes that you suggest, it certainly would not favor consumers. It would only guarantee insurance companies could get away with denying legitimate claims of people who in good faith pay them premiums. That is very not consumer friendly.
You may not have been at the Banking & insurance Committee when I offered to tear up the proposed bill if the industry would provide a written guarantee rates would be reduced for more than just one year. Unfortunately, the industry’s response was negative, saying “of course we can’t do that.”
Thank you again for taking the time to write.