Contact:

Cliston Brown, (847) 553-3671, cliston.brown@pciaa.net Kristen Bridges, (850) 545-1917, kristen@bascomllc.com

FOR RELEASE ON RECEIPT

August 21, 2012

PCI Continues to Urge Caution & Patience Relating to the Effectiveness of Floridas New PIP Law
TALLAHASSEEDonovan Brown, state government relations counsel for the Property Casualty Insurers Association of America (PCI), has issued the following statement in response to the release by the Office of Insurance Regulation (OIR) of the Pinnacle Actuarial Resources, Inc., actuarial study on the state's Personal Injury Protection (PIP) system and its expectations for the effects of the new PIP law. PCI and its member companies have warned for some time of the current and long-term damages resulting from years of rampant fraud and abuse of the PIP system. While the 2012 PIP legislation delivered the potential to address the fraud and abuse in the PIP system, policymakers, regulators and Florida drivers need to understand that the new PIP law must have adequate time to be implemented and take effect so the new PIP law can achieve its potential. PCI has ongoing concerns with the studys conclusions and the fact that they are based on a law which does not fully take effect until next year. Although we commend Pinnacle for its diligent and thorough work, the study cannot anticipate changes to Floridas legal, social or economic environment which will directly influence the impact of the new PIP law. The study also cannot calculate the scope of detrimental challenges to the new PIP law that will be filed by plaintiffs attorneys or the manner and extent to which corrupt providers will attempt to game the system. In addition, we note that the study cannot foresee the overall impact the PIP law may have on the Bodily Injury and Uninsured Motorist portions of drivers auto policies. Therefore, in order for the new PIP law to achieve its potential, PCI encourages policymakers, regulators and Florida drivers to allow the law adequate time to take effect. PCI also urges policymakers to protect the law from any distortion that will negatively impact its ability to deter fraud and abuse in the PIP system. As with any comprehensive legislative package, there will be implementation processes and other issues that must be addressed in order for the PIP law to attempt to stabilize our auto insurance market. We are optimistic that regulators and policymakers will allow the law proper time to take effect and will make decisions resulting in a competitive marketplace that benefits consumers. PCI looks forward to working with all stakeholders in the PIP system as the process of implementing the new PIP laws goes forward.

PCI is composed of more than 1,000 member companies, representing the broadest cross-section of insurers of any national trade association. PCI members write over $180 billion in annual premium, 39.2 percent of the nations property casualty insurance. Member companies write 45.5 percent of the U.S. automobile insurance market, 32.0 percent of the homeowners market, 37.3 percent of the commercial property and liability market, and 40.6 percent of the private workers compensation market. ###