TALLAHASSEE, Fla. – The Florida Office of Insurance Regulation today released an actuarial report written by Pinnacle Actuarial Resources, Inc. (Pinnacle) that calculates indicated savings to be realized by insurers writing Personal Injury Protection (PIP) auto insurance in Florida. The indicated savings is based on a market analysis of HB 119 – Motor Vehicle Personal Injury Protection Insurance, passed during the 2012 legislative session. The majority of the provisions of HB 119 take effect January 1, 2013.
The Legislation appropriated $200,000 for the Office to select a contractor and perform this analysis. After receiving three bids, the Office announced that it selected Pinnacle for a contract of $150,000 on June 12, 2012.
Although readers may focus on the overall indicated savings mentioned on pages four and five of the executive summary, it is important to note five important caveats to this indicated savings:
Ø The savings is on the premium indications – not the actual premiums
Ø The indicated savings is only on the PIP portion of the premium, which is roughly 20% of the average auto insurance bill
Ø The indicated savings may actually mitigate premium increases, not reduce premiums
Ø The indicated savings will not be realized until January 1, 2013 – at the earliest
Ø Insurers do not have to accept the indicated savings calculated by Pinnacle
This report was due to the Governor and Legislature on September 15, 2012; however, the Office is releasing it early to allow companies time to consider these findings prior to making their PIP filings on October 1, 2012 as required by HB 119.