BestWeek: Fate of Florida's No-Fault Law Hangs in the Balance in 2006.

OLDWICK, N.J. -- If the state Legislature doesn't extend it this year, Florida's no-fault automobile insurance system will sunset in 2007. Insurers are divided on the issue.

Some want it repealed, just as Colorado did in 2003. Others want it to stay, albeit with several serious reforms, according to an exclusive article in the Jan. 9 BestWeek.

"All of the industry is in agreement that the system isn't working," said William Stander, regional manager for the Property Casualty Insurers Association of America. "The disagreement is a question of 'can we fix it?' We think we can."

Stander said there is a "laundry list" of reforms needed to continue Florida's no-fault system, which allows policyholders to recover financial losses from their own insurance company, regardless of fault, and restricts the right to sue for noneconomic damages. PCI supports a medical fee schedule; practice parameters; repealing the attorney contingency fee multiplier; and bad-faith lawsuit reform.

But two other insurance trade groups--the American Insurance Association and the National Association of Mutual Insurance Companies--want the no-fault system to sunset.

"We don't believe the no-fault law is good for Florida, and we don't think it can be improved to where it is good for Florida," said Julie Pulliam, a spokeswoman for the AIA.

Also in the Jan. 9 BestWeek:

--Why experts question the contention that consumer-driven health plans may compound the problem of Americans' rising medical debt;

--Why regulatory modernization seems a long shot as long as the industry fails to reach consensus

Also featured is Best's Insurance Composite Index, which finished the week of Jan. 5, 2006, at 1,174.35, up 18.50% compared with a year ago. The composite index reflects the performance of 138 insurance stocks. The week's top performers were National Interstate Corp.; NYMagic Inc.; United America Indemnity Group Inc.; Argonaut Group Inc. and SCPIE Holdings.

BestWeek is published by A.M. Best Co. for insurance professionals, including home office executives, agents and brokers.

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