LEGISLATURE RENACTS PIP EFFECTIVE JANUARY 1, 2008 – GOVERNOR CRIST EXPECTED TO SIGN BILL

PIP Gap to exist between OCTOBER 1, 2007 and January 1, 2008

by FAIFA Lobbyist Timothy J. Meenan

A reformed Automobile no-fault insurance system is on its way to the Governor for his signature following House and Senate action today. Governor Crist is expected to sign the measure into law, re-enacting the mandatory PIP/no-fault law effective January 1, 2008. The bill is consistent with FAIFA’s position supporting a level of mandatory medical coverage, thus avoiding a cost shift to health insurance policies. FAIFA members were successful in getting their message out to the Legislature and Governor. However, the solution has the potential to create confusion for insurers, agents, and customers during the gap and reimplementation periods. Customers renewing in October and November are likely already receiving renewal or non-renewal notices which have removed PIP from their auto policies. We will have to work with our customers to explain the changes.

Companies will have until November 15 to submit notice and explanation to policyholders. The new PIP law includes a long-sought after medical fee schedule to help combat fraud that all stakeholders agree was rampant in the old no-fault system that expired this past Monday. The reforms are intended to combat fraud by expanding the time during which insurers can investigate reimbursement requests. The reformed legislation also provides a transition period to the new PIP, but it does not re-enact the old PIP for any period of time.

Senate Summary of the provisions in CS/HB 13C outlining the three-month transition to the revised PIP January 1, 2008.

• The effective date provisions are changed to require that the No-Fault law applies to everyone on January 1, 2008, to require insurers to add PIP coverage to policies on that date.
• Insurers must give policyholders notice by November 15, 2007, that the coverage is being added and specify the additional premium due for such coverage, if any.
• In order to enable the Office of Insurance Regulation and the insurers to implement this, the amendment requires insurers to use the same rates and forms that they had in effect under the old No-Fault law on September 30, 2007, unless the insurer makes a new rate and form filing as required under current law.
• Vehicle owners are not required to have PIP between October 1, 2007 and January 1, 2008. Of course, many persons will still have PIP coverage in their policies.
• The no-fault law tort restrictions do not apply between October 1, 2007 and January 1, 2008, with one exception: If the plaintiff and the defendant both have the old PIP coverage and are in an accident between October 1, 2007, and January 1, 2008, the no-fault tort limitations will apply.
• The requirements to maintain property damage (PD) liability continue to apply throughout the entire interim period.