Despite support from Florida?s top leaders for new laws to fight automobile insurance fraud, the proposals faced intense scrutiny at House and Senate insurance committee meetings today.
Several Senators demanded insurers and others provide better data and Democrats at the House insurance meeting had tough questions about a bill the committee is drafting.
Some insurance representatives couldn?t answer questions related to claims and lawsuits from Sen. Joe Negron, R-Stuart, who is drafting the Senate bill, because they said information about individual companies could violate anti-trust laws.
Sen. Mike Bennett, R-Bradenton, suggested putting people under oath, saying that?s what the state did during the second week of hearings on medical malpractice. He said that?s when the answers changed. ?It?s very embarrassing that the insurance industry would stand up there? and say there aren?t figures available, he said. ?They are number freaks.?
Sen. Chris Smith, D-Fort Lauderdale, asked the insurers, health care providers and attorneys on both sides of the fence on PIP legislation to create reports with detailed figures to back up their points. ?We get a lot of anecdotal testimony,? he said.
Insurers are working together to provide collective data to Negron by Dec. 1, said Michael Carlson, executive director of the Personal Insurance Federation of Florida, a trade group with members that include Allstate, State Farm and Progressive. "Senators and others who criticize the industry for lack of transparency are ill-informed about what we have been doing," he wrote in an email.
Chief Financial Officer Jeff Atwater urged lawmakers to approve legislation based on policyholders' "painful" stories about auto insurance rates, but he said they should demand concrete data from groups involved in the debate and require savings from the law to be passed to consumers. He said if the companies don't, they should have to testify at public hearings about why.
Rep. Mack Bernard, D-West Palm Beach, asked how much rates are expected to decrease if there's reform and was told that the information isn?t available.
?I feel very worried about that?when you tell me you can?t provide that,? said Rep. Janet Cruz, D-Tampa, who noted that supporters of PIP reform are quick to estimate how much it costs policyholders.
A Farmers Insurance representative described a set of policyholders filing claims and said only three percent asked for lost wages, an indication that claims payouts aren't going to them directly: "Policyholders are not claiming the [the money] due to them because providers are claiming the benefit."
Other questions raised by legislators include:
What?s the definition of a ?suspicious? claim? The legislation extends the time insurer have to pay claims if they are suspicious. Cruz said lawmakers should define it or else ?we?re going to see an industry that defines everything as suspicious.?
Rep. Jim Boyd, R-Bradenton, who is sponsoring a PIP bill and is helping with the committee?s bill, said he believes the data would show that insurers don?t investigate most claims. ?Most insurance companies want to pay claims fairly and quickly. To do anything else costs them money? and time. He added that consumers can get help from state regulators if an insurer is unfairly delaying, denying or lowballing a claim.
A hospital representative told the Senate panel that large insurers pay almost every claim it submits ? but only after they?re threatened with a possible lawsuit.
Would insurers? claims costs outpace premiums if you excluded overhead costs? Monte Stevens, a legislative director with the Office of Insurance Regulation, answered Rep. Richard Steinberg?s question: The costs equal premiums coming in if you exclude administrative expenses.
Would the legislation cap fees for insurers? attorneys in addition to those of policyholders?? No, Boyd said, prompting Steinberg, a Democrat from Miami Beach, to ask: ?Why would it be appropriate for us to limit the fees on one side and not on the other??
Boyd said most insurers have lawyers on staff that help with a variety of legal issues so the cost is ?embedded in their cost of doing business.?
Have any of the top ten auto insurance providers gone out of business the past ten years? Bernard asked.
Stevens said he?s not aware of any.
Updated Thursday.
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