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Senate approves auto insurance reforms

The legislation, which would abolish no-fault insurance in 2007, cracks down on fraud.

By Associated Press
Published May 22, 2003

TALLAHASSEE - The Senate unanimously passed a compromise bill Wednesday to reform the no-fault auto insurance system by fighting fraud and reducing lawsuits.

The bill (SB 32A), which passed 38-0, now goes to the House, which is expected to approve it Tuesday.

The no-fault system was adopted in 1971 as a way of reducing litigation by requiring drivers to insure themselves against injuries regardless of fault, but fraud has been rampant in recent years and costs have soared.

Senate President Jim King, R-Jacksonville, reminded senators that he had called for them to fix the system or flush it and he felt that the legislation would give it as good a chance to succeed as possible.

The legislation calls for it to be automatically abolished in 2007 unless the Legislature votes in 2006 to keep it.

That provision got the support of the insurance industry, which failed to get the curbs on medical and legal fees that it initially sought.

Trial lawyers and the medical community also endorsed the compromise, which contains a number of provisions cracking down on fraud.

A select Senate committee that studied the no-fault system found that despite reforms in 1998 and 2001, fraud continues to be a problem and adds as much as $240 to the average family's annual auto insurance premium.

With premiums increasing, the Department of Highway Safety and Motor Vehicles estimated that 22 percent of the state's drivers are not purchasing the mandatory insurance.

The bill increases penalties for soliciting accident victims, staging fake motor vehicle accidents and disclosing confidential accident reports, provides tougher regulation of health care clinics and requires medical providers to send a demand letter to the insurance company before filing suit for nonpayment of a claim.

Senate leaders persuaded senators to withdraw most proposed amendments for fear of upsetting the agreement with the House.

"This is a carefully balanced package," Sen. JD Alexander, R-Lake Wales, told the Senate.

No-fault auto insurance reform highlights:

Creates new crimes for soliciting accident victims, intentionally causing accidents, disclosing confidential accident reports and presenting fraudulent vehicle insurance cards.

Transfers health care clinic regulation from the Department of Health to the Agency for Health Care Administration. Requires clinics to be licensed, allows AHCA to inspect them.

Requires magnetic resonance imaging clinics to be accredited by national organizations within a year of licensing.

Requires insurance companies to pay a bounty to people reporting improper medical billings.

Authorizes the Health Department to make a list of diagnostic tests that are not medically necessary and therefore not compensable.

Requires medical providers to send a demand letter to the insurance company before filing suit over nonpayment of a claim.

Provides that no-fault will be repealed in 2007 unless the Legislature re-enacts it in 2006.

- Source: Senate staff analysis

[Last modified May 22, 2003, 01:30:54]

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