Fla. Regulators: State Farm is Top Auto Underwriter in State

The Florida Office of Insurance Regulation (FOIR) recently released a ‘fast facts’ report that highlighted the department’s regulatory activities as it passed a milestone earlier this month with reforms being implemented into the state’s personal injury protection (PIP) system.

Part of the report, released this week, listed the top 20 auto insurance underwriters in Florida. State Farm Mutual led the state’s auto insurance carriers with about $2.5 billion in written premiums for the 2011 calendar year.

GEICO General followed with nearly $1.3 billion, while two Progressive subsidiaries—American and Select—had the third- and fourth-highest amounts with $694 million and $630 million.

GEICO Indemnity rounded out the top five underwriters with $622 million.

FOIR Saw Most Rate Filings from P&C Insurers

There were 8,405 rate filings from P&C insurers processed by the FOIR, according to the report, outpacing the 6,281 filings from life & health coverage providers.

Regulators took a much longer time to process P&C rate filings than those from life & health insurers, averaging 65 days for P&C submissions compared to the 20 days it took for other kinds of carriers.

The report contained other notable investigatory figures for the 2011-12 fiscal year. Regulators conducted 4,655 “desk audits” that reviewed finances of P&C insurers, according to the report. Those audits far outnumbered figures for life & health and specialty lines of insurance coverage, which saw 2,648 and 1,440 of those audits, respectively.

P&C insurers also saw the most in-the-field examinations of their finances with 44 such audits, outnumbering the 36 exams for life & health and eight exams for specialty insurers.

Such investigations typically yield fines, fees and penalties levied against insurers found to be in violation of state insurance laws. According to the report, fiscal year 2011-12 saw almost $7.8 million in administrative fines and fees, with nearly $42 million in refunds recouped for consumers.

Of that $7.8 million, P&C lines of insurance were fined or charged fees for “product review” totaling $66,000 and “financial oversight” totaling $42,150.

Florida’s PIP Changes Went into Effect in January

Provisions of Florida’s controversial reform package went into effect on January 1, a milestone for the much-debated legislation overhauling how the state deals with PIP claims.

In Florida, HB 119 governs PIP coverage under the state’s no-fault system that compensates injured motorists for medical treatment, regardless of who caused the crash. Extensive debate between lawmakers culminated in a revamping of the law targeting illegitimate claims from staged accidents and inflated billing for treatment that many blamed for spikes in quotes for car insurance and overall coverage costs.

According to the Insurance Information Institute, the average no-fault claim in Florida jumped in just two years between 2008 and 2010, from $5,812 to $8,796. Lawmakers said reform was needed before ballooning no-fault costs overwhelmed the state’s entire car coverage system.

Provisions of the final reform package that went into effect on Jan. 1 included lowering PIP benefit limits from $10,000 to $2,500 unless the claim was needed to treat an “emergency medical condition.”

Another provision went into effect that instituted a 14-day deadline for claimants seeking treatment for PIP-eligible conditions.

Several months after HB 119 reforms were passed in May, regulators issued a report cautioning patience among consumers seeking savings, saying that “for many policies the savings will not be realized until July 1, 2013 or later.”

The FOIR received more than 100 rate filings from insurance carriers in October that showed that, while the size of rate increases had seemed to slow, premiums were largely unaffected by reform measures so far.

Injunction Denial Bars Delay of January Reforms

Last month, U.S. District Judge Richard A. Lazzara denied a court injunction brought against the FOIR by a group of healthcare providers including acupuncturists, chiropractors and massage therapists that hoped to stop implementation of HB 119 provisions that went into effect Jan. 1.

The plaintiffs, whose injunction was part of a lawsuit against the FOIR to reverse the reform package, had a hearing scheduled for Dec. 13, when they hoped to present their case at a hearing and claim that the changes to Florida’s PIP system violated “their rights to due process of the law” after those changes invalidated their services from being eligible for PIP compensation.

However, Lazzara released his ruling a day before that scheduled hearing, saying he denied the injunction request “without the necessity of a hearing because [the] plaintiffs have utterly failed to demonstrate that there is a substantial likelihood they will eventually prevail on the merits.”

The R Street Institute, the think tank offshoot of the Heartland Institute that supported the reforms, called the injunction denial a “short-term procedural victory”; both organizations claim libertarian leanings and support for “free markets.”

Meanwhile, healthcare groups are forming various coalitions to support the lawsuit, one of which includes the United Practitioners Organization that set up a fund to support litigation efforts.

Other parties throughout the state are making predictions about the efficacy of lawmakers’ reforms against illegitimate PIP claims as they wait for the full impact of those reforms on Florida’s car coverage system. In a piece posted for the Coalition Against Insurance Fraud, Fort Lauderdale-based lawyer Stephen Rosansky said that the reform package’s measures may not be as fool-proof against criminality as legislators hope they are, including added provisions that now require more detailed crash reports with information about the officer investigating the crash.

However, Rosansky said in his analysis, the lack of penalties against officers who document crashes poorly or for “officer nonfeasance” will still allow for “phantom vehicle” losses in which several claimants say they were in the vehicles involved in the crash.

“The claimants will argue that they were present (even if they were not), and that the officer failed to properly document the report,” said Rosansky.

Rosansky also said that such a loophole will allow inflated injury claim losses to continue to be propagated by “providers, attorneys, runners and staged-crash participants,” according to his “top five predictions” of the impact of HB 119 reforms.

About Charles Nguyen
Charles Nguyen is an enterprising journalist who reported for Patch.com and the Desert Dispatch and was the editor in chief of the Guardian (the twice-weekly newspaper at the University of California, San Diego) before coming to Online Auto Insurance News.

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