An article by Kathleen Haughney in the August 3, 2012 edition of the Sun-Sentinel states that the state's insurance regulators said in an email today that they aren't expecting auto insurers to meet a 10 percent reduction in no fault insurance costs by October as laid out in a massive auto insurance reform measure.
The Office of Insurance Regulation sent an email to reporters Friday afternoon clarifying points about a study being done by Pinnacle Actuarial Resources on the state's new law affecting personal injury protection insurance. The study lays out what savings can realistically be expected. The law says that insurers must reduce rates by 10 percent this October or provide a detailed explanation as to why they cannot do so.
OIR, which also released the draft report, reminded reporters that the 10 percent reduction is not required, and then wrote that they in fact, expect many companies to file explanations, and not necessarily reduce rates.
Here's a paragraph from the OIR email: The law requires insurance companies to make filings by October to either reduce rates by 10 percent or give the office a detailed explanation of why the premium is not being reduced by that amount. The Office expects detailed explanations to be filed by many insurers that show their prospective "savings" differs from the 10 percent, or differs from the findings in the finalized Pinnacle report.
The draft report notes that rates could be reduced by 12 percent to 20 percent starting in 2013. However, the draft report noted that these reductions could be offset by other insurance increases.
Donovan Brown, a lobbyist for Property Casualty Insurers of America, released a statement following the report's release saying that the law needed to fully take effect before they could truly figure out if it reductions are possible.
"From the very beginning, PCI and its member companies have warned of the current and long-term damages resulting from the rampant fraud and abuse in the PIP system," he said. "While the 2012 PIP legislation delivered the potential to begin fixing the runaway costs within the system, it is imperative that policymakers, regulators and Florida drivers understand that it must have adequate time to take effect. As with any comprehensive legislative package, there will be implementation processes and other issues that must be addressed."
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