Fla. Legislature Addressing Medical Liability, PIP Fraud, Credit

The Florida legislature is gearing up for several hearings this week that will deal with important insurance-related issues including medical liability, PIP insurance fraud reform, and the use of
credit-based insurance scoring.

“It’s encouraging to see that Florida lawmakers are rolling up their sleeves on these issues,” said James Taylor, southeastern regional manager for the National Association of Independent Insurers (NAII). “Between these three issues, everyone involved with insurance in Florida has their work cut out for them.”

This week the Senate Health, Aging and Long Term Care Committee will hear the medical malpractice reform package proposed by a task force of lawyers, medical care providers and insurers. Task force recommendations include a $250,000 cap on non-economic damages, definitions of bad faith by medical liability insurers, and other proposals.

The House will deliberate H.B. 1713, its medical liability package next week as well. The bill is based on recommendations drafted by a select committee and a package advanced by the House Health Care Committee.

And the House Insurance Committee and the Senate Banking and Insurance Committee will hear testimony on the proposed committee bill (H.B. 627) dealing with PIP auto insurance fraud that was approved by Rep. Don Brown’s Insurance Regulation Subcommittee. Key elements include a stronger verbal threshold and limitation of the attorney fee multiplier, although the bill excluded two key elements of importance to the insurance industry: a full medical fee schedule for PIP, and a mediation system and restrictions on payment of legal fees.

“Although we didn’t get everything we asked for, the PIP fraud reform bills are a good starting point,” Taylor noted. “We’re especially pleased to see the elimination of the attorney fee multiplier, which is a serious cost driver. We plan to keep working with the Senate on fine-tuning its fraud bill as well.”

Last week the Senate Banking and Insurance Committee approved an
amended version of a credit scoring bill (S.B. 204), which was unanimously approved and sent to the Commerce Committee.

“Although we are concerned with a few issues involving S.B. 204, it’s a big improvement on the original bill,” Taylor noted. At issue is a provision that would introduce an outright ban on the use of number of credit report hits. “S.B. 204 is based on the NCOIL credit scoring model, which regulates rather than prohibits insurers from using the number of credit report hits as a criteria,” Taylor said. “We’d prefer that the bill adhere to the model in this regard.”

NAII will continue to work with the Senate on developing a responsible bill to meet industry needs and still be responsive to consumer issues, Taylor added.