Feb. 24--Even Tallahassee's champions of free enterprise are giving up on Florida's insurance companies.
Last year, the Florida Legislature passed and Gov. Rick Scott signed a bill designed to lower the cost of car insurance. House Bill 119 dramatically changed the no-fault system that has been in place for 40 years. The focus was Personal Injury Protection (PIP,) the mandatory $10,000 coverage for expenses in minor accidents.
To cut down on overbilling, the legislation eliminated PIP claims for acupuncture and massage therapy. Non-emergency expenses were limited to $2,500. To cut down on scams, the legislation tightened oversight of clinics -- bogus ones had become PIP mills -- and required all victims to seek claims within 14 days of an accident.
In return, consumers were supposed to pay less for PIP and thus less for their policy. The target was a 10 percent reduction by last October, then a 25 percent reduction by January 2014 from pre-HB 119 levels. The original bill by Sen. Joe Negron, R-Stuart, made those reductions mandatory. We supported that bill. Insurance companies got the requirement eliminated, and Gov. Rick Scott at first said he wouldn't sign a bill that had even goals. The free market, he said, would drive down prices.
October, though, came and went without significant reductions in the companies' new rate filings. Some companies even raised prices. The excuse was that those who profited from the old PIP system would find ways to milk the new PIP system. We heard the same excuses in 2007, when the Legislature did a favor for insurance companies that was designed to reduce rates. The industry found excuses to keep raising rates.
Sen. Negron already had expressed his displeasure over the lack of PIP reductions. Last week, Senate President Don Gaetz, R-Niceville, joined in. "Frankly, I'm disappointed in the PIP insurance companies," Sen. Gaetz said. "They promised savings. I want to know where the rate savings are. ... I don't think the insurance companies have come through like they said they would come through." He got an amen from House Speaker Will Weatherford, R-Wesley Chapel.
The Florida Chamber honored Sen. Gaetz as one of its 2012 Distinguished Advocates. Yet he and others are fed up. The obvious response should be to make the cuts mandatory. Unfortunately, there is no bill to do so, and the session starts March 5. What makes the Legislature believe that free enterprise will kick in by Jan. 1?
for The Post Editorial Board
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