Glitch Bill, No-Fault Are Key Insurance Developments During This Week’s Legislative Session

Several key insurance issues developed further this week in the Florida Legislature:

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Following are detailed summaries on each of the above:

On Wednesday, March 28, 2007, the Florida House took up HB 7077 regarding hurricane preparedness and insurance, which is the glitch bill to HB 1A that passed during the 2007 Special Session in February.

This bill was read a second time, discussed and two amendments were adopted on the House Floor. The first amendment by Representative Ron Reagan clarifies that the 90 day notice of loss provision applies to residential property insurance claims and not commercial residential claims. The second amendment allows insurers that had a catastrophic reinsurance contract in place prior to January 25, 2007 to avoid rate filings in accordance with the Office of Insurance Regulation�s presumed factors.

On Thursday, March 29, 2007, the Florida House took up HB 7077 for final passage. After several democratic representatives expressed opposition to the bill, it was temporarily postponed on third reading. The bill is on the unfinished business section of the calendar where it will likely be taken up during the week of April 9th through the 13th.

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On Thursday, March 29, 2007 the House Insurance Committee discussed Florida�s personal injury protection (PIP) laws and other no-fault proposals. Chairman Don Brown opened the workshop and provided three options for the future of PIP. First, the legislature could do nothing and allow Florida�s PIP laws to expire via the sunset provision. Second, the legislature could extend the sunset for a period of time into the future with no changes to the substantive laws. Third, the legislature could pass a bill with reforms to the current no fault system.

After a brief presentation by staff regarding the history of no fault in Florida, a representative from the Department of Financial Services discussed their efforts combating insurance fraud and abuse in the PIP system. During their testimony, they indicated that fraud and abuse in the PIP system is costing the average Floridian family as much as 1,400 dollars�per year in increased premiums despite their efforts.

Next, two Representatives gave testimony on bills that they have filed regarding no-fault. Representative David Simmons presented his proposal, expressed in HB 265, which implements mandatory bodily injury coverage. It also creates policy limits of 25,000 dollars per person and 50,000 dollars per accident. Representative Simmons also stated that he does not believe the PIP fraud would carry over into a mandatory bodily injury claim. Representative Rick Kriseman next presented his proposal, expressed in HB 359, which would keep the current PIP laws and include mandatory bodily injury coverage.

Next, public testimony was taken from several interested parties including automobile insurers, trial attorneys, hospitals, clinics, chiropractors and others. As in the Senate Committee, the insurance representatives testified against the current PIP laws and provided alternatives to the current system.

Representative Simmons� bill has been referred to the Insurance Committee and the Jobs and Entrepreneurship Council, but has not been discussed. Representative Kriseman�s bill passed the Committee on Infrastructure and is now in the Economic Expansion and Infrastructure Council.

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On Tuesday, March 27, 2007 the Senate Banking and Insurance Committee discussed SB 1880 by the Banking and Insurance Committee and Senator Bill Posey relating to Florida�s motor vehicle no-fault insurance law. This bill reenacts the no-fault law through 2009 and allows insurers to limit amounts paid to providers to 200 percent of the Medicare Part A or B participating fee schedules. If the treatment services are not reimbursable under Medicare Part A or B, then insurers may limit payments to the maximum reimbursable amount under workers� compensation. If the treatment is not reimbursable under either Medicare or workers� compensation, then it is not reimbursable.

The bill also prohibits a provider from billing an insured any amount in excess of the fee schedule payment limit. Finally, the bill removes existing fee schedules for certain medical procedures (i.e., cephalic thermograms, peripheral thermograms, spinal ultrasounds, extremity ultrasounds, video fluoroscopy, and surface electromyography).

The bill was discussed and debated for nearly the entire two hour committee meeting with testimony from the insurance industry, hospital industry, chiropractic industry and others. Committee members were also heavily involved in the discussion. Insurance representatives expressed concerns with the bill and provided alternatives such as treating the no fault system similar to workers� compensation and providing for meaningful fraud reform.

Senator Posey stated that he would address fraud in another bill that was not taken up during the committee meeting.

Senator Al Lawson offered an amendment that would have provided the hospitals with an exemption. It was defeated 5-5.

The bill passed unanimously and now goes to the Senate President�s Office where it will likely be referred to other committees before it goes to the floor. Senator J.D. Alexander requested that the bill be referred to the General Government Appropriations, a committee that he chairs.

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