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Senate panel backs auto insurance bill

The measure seeks to limit the rising cost of coverage.

By MICHAEL SANDLER
Published April 4, 2003

TALLAHASSEE - Pledging to fix, not abandon, the state's personal injury protection insurance market, a Florida Senate committee ushered along major reform Thursday that included key measures recommended by the insurance industry.

The Banking and Insurance Committee unanimously passed the Motor Vehicle Insurance Affordability Act (SB 1202), which seeks to curtail the state's rising cost of auto insurance by adding new penalties for fraud, regulating health care clinics and limiting money collected by lawyers and health care providers.

That differed sharply from the approach by the House, which is considering legislation favored by doctors and lawyers.

"I'm trying to get most of the lawyers out of PIP," said Sen. JD Alexander, R-Lake Wales, referring to personal injury protection. He drafted the Senate plan.

"We think there is a more efficient way to do that, and not have to go through a whole bunch of litigation," he said.

Senate President Jim King has vowed to "fix or flush" Florida's no-fault system, and Alexander said the adopted reform is the only serious way to fix it.

Originally adopted decades ago to simplify claims, PIP has recently experienced rising costs, as well as problems with fraud and abuse.

Insurance companies complain that some health care providers and lawyers pay people to stage accidents so they can collect exorbitant fees from claims.

The Senate bill would limit medical fees for treatment under PIP to 200 percent of the Medicare fee. Advocates for doctors say that is too low and will result in fewer doctors seeing patients hurt in auto accidents.

The Senate bill also adopted a mediation program that attorneys complain more closely resembles arbitration.

Current law requires insurance companies that lose lawsuits to pay their opponents' legal fees. Under the proposed new law, if an insurance company agrees to mediation, it is not liable for those legal fees, even if opponents do not agree and sue.

Insurance companies have complained that they often pay hundreds of thousands of dollars to lawyers for claims that might total a few hundred dollars.

Lawyers say that without the current provision, people would have limited access to courts. Attorneys would have little incentive to take those cases and allow insurance companies to deny more claims.

After much deliberation last week, the House voted down the fee schedule and the mediation. It adopted a voluntary mediation program that would be agreed upon by both parties.

House Insurance Committee Chairwoman Kim Berfield, R-Clearwater, said she hopes the two chambers can reach middle ground, but offered no ideas for compromise.

[Last modified April 4, 2003, 02:33:12]


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