State regulators began combing through scores of applications Monday as the deadline came for insurers to submit proposed 2013 rates that reflect changes to the state's no-fault car insurance system made earlier this year.
Meanwhile, critics of the proposed plan have already begun their legal pushback. A group of chiropractors, massage therapists and their patients has asked a Leon County circuit judge to invalidate the law or at least stop it from going into effect.
It's the first of many lawsuits expected before or shortly after changes take effect Jan. 1 that backers say are needed to cut skyrocketing costs of personal injury protection insurance, commonly known as PIP.
Following up on changes put in place earlier this year, insurance companies had until Oct. 1 to deliver rate proposals for 2013 that reflect changes made with the passage of HB 119, a set of reforms sought by the insurance industry.
While most of the provisions don't kick in for another three months, some of the changes have already taken place. As part of the plan, PIP insurers are required to show that rates reduced by at least 10 percent or justify why those reductions did not occur.
Applications approved by OIR so far show a wide range of rate requests ranging from a 26 percent increase approved for Agency Insurance company to a nearly 15.4 percent decrease for Hartford Insurance of the Midwest.
The filings indicate that most consumers will not see their auto insurance premiums go down, but Florida Insurance Commissioner Kevin McCarty applauded the legislation nonetheless as a step toward reining in rates that have skyrocketed over the past several years.
"Although it initially appears the savings will result in a mitigation of rate increases rather than actual rate reductions for most companies it does represent a major shift in the trajectory of PIP insurance rates in Florida, McCarty said in a statement.
While regulators glean over applications, the courts will also become engaged.
Filed Sept. 21, the lawsuit contends the new law unconstitutionally restricts the ability of chiropractors, massage therapists and acupuncturists from plying their trade. It specifically targets a provision that reduces benefits from $7,500 to $2,500 if the treatment is not considered emergency care.
The case has been assigned to Circuit Judge Kevin Carroll in Tallahassee. No hearing dates had yet been scheduled as of Monday afternoon. While the case proceeds, the lawsuit asked Carroll to prevent the state from instituting the changes Jan. 1.
"The new act imposes sweeping changes and significant restriction on both health care providers and consumers and imposes a legislative framework limiting both the consumers' options for medical treatment," the lawsuit charges.
Michael Carlson, executive director of the Personal Insurance Federation of Florida said the lawsuit clouds an already murky situation. Insurers have sent in proposals based on a set of assumptions but no real claims experience. To further change the game by not allowing the cost-saving provisions to take effect would likely widen the gap between claims and premiums paid, he said.
"We need some time to see how the new law will affect claims," Carlson told the News Service Monday. "Give us six months and we should have a pretty good idea."
