Presentation on Personal Injury Protection (PIP) Insurance

Transcription

1 Presentation on Personal Injury Protection ( Insurance Senate Banking & Insurance Committee April 2, 2013 Sandra Starnes Director, Property & Casualty Product Review

2 Part I: Implementation of HB 119 From

3 OIR Implementation Activities Informational Memoranda Updates to Office Forms Form Filings Actuarial Report 3

4 Actuarial Report Contractor: Pinnacle Actuarial Resources, Inc. Estimated savings: PIP losses: 16.3% % PIP premiums (statewide): 14.0% % Personal auto premiums: 2.8% - 4.9% An important caveat in the report: The savings shown assume that current rates are adequate. To the extent that current PIP rates are inadequate, it is likely that insurers will offset the savings from HB 119 against the otherwise indicated PIP rates. Note: PIP premiums represent approximately 20% of total personal auto premiums. 4

5 in PIP Premium From Rate Filings Personal Auto Rate Filings Prior to HB 119: For filings effective on or after 1/1/2011 More than 85% had approved increases in PIP. The majority were double-digit increases. Results of 135 approved filings reflecting HB 119: 52% resulted in decreases 72% resulted in decreases or no changes 5

6 in PIP Premium From Rate Filings (cont.) Filing summary for the Top 25 Personal Auto Insurers (represents 80% of the market): Amount of PIP Number of Market Share Filings Decrease of at least 10% 10 42% Decrease less than 10% 4 5% No change 4 8% Increase 7 25% The weighted average approved PIP change of the Top 25 insurers was -2.0%. If State Farm s filing is removed, the weighted average change was -4.8%. 6

7 Filings for Top 5* Personal Auto Insurers Company Indication Selected PIP Company Name Market Share* File Number Before HB 119 Percentage State Farm Mutual Auto Insurance 17.5% % 7.9% GEICO General Insurance 10.3% % -10.0% Progressive American Insurance 6.3% % -10.0% Progressive Select Insurance 5.3% % -10.0% GEICO Indemnity 4.8% % -10.0% * Based on 2012 Total Personal Auto premiums reported on FL state page of the annual statement. 7

8 Part II: Replacing PIP with Mandatory Bodily Injury (BI) Coverage Estimated Premium Impacts 8

9 Description of Coverages Personal Injury Protection ( Bodily Injury (BI) Property Damage (PD) Medical Payments (Med-Pay or MP) Uninsured Motorist (UM) Comprehensive (COMP) Collision (COLL) 9

10 2 rating examples used Methodology 5 large auto insurers were reviewed - 3 represent the non-standard market - 2 represent the standard or preferred market To reflect the elimination of PIP: - 50% of the PIP premium was moved to BI - 20% of the PIP premium was moved to MP, and - 10% of the PIP premium was moved to UM 10

11 Summary of Premium Impacts From: Minimum Required Limits ($10,000 PIP/$10,000 PD) To: PIP Eliminated and: 10/20/10 (BI/PD) Limits Non-standard insurers experienced decreases across all regions Standard/preferred insurers decreases in regions where PIP fraud was prevalent 25/50/10 (BI/PD) Limits Central Miami only region with decrease for all insurers If Full Coverage policies purchased (BI, PD, PIP, UM, MP, COMP & COLL), all insurers experienced decreases in premium if BI, PD, and UM limits remain constant. 11

12 Estimated Impact by Region - Central Miami Non-Standard Company A Married Couple Both Age 40 Policies with Minimum Required Limits PIP/PD BI/PD* 10/20/10 No-Fault Policies with Full Coverage (10/20/10/1) Tort * System $2, $1, % $3, $3, % Non-Standard Company B Non-Standard Company C Stand./Pref. Company D Stand./Pref. Company E $1, $1, % $4, $3, % $1, $1, % $3, $3, % $ $ % $1, $1, % $1, $1, % $2, $2, % Source: Premium shown is annual premium from Rate Collection System information for recent personal auto rate filing. Limits shown as A/B/C/D where the BI limit per person is $A, BI limit per occurrence is $B, PD limit is $C and MP limit (if applicable) is $D. 12 * Includes adjustment to reflect elimination of PIP.

13 Estimated Impact by Region - Tallahassee Non-Standard Company A Married Couple Both Age 40 Policies with Minimum Required Limits PIP/PD BI/PD* 10/20/10 No-Fault Policies with Full Coverage (10/20/10/1) Tort * System $ $ % $1, $ % Non-Standard Company B Non-Standard Company C Stand./Pref. Company D Stand./Pref. Company E $ $ % $2, $1, % $ $ % $1, $1, % $ $ % $ $ % $ $ % $ $ % Source: Premium shown is annual premium from Rate Collection System information for recent personal auto rate filing. Limits shown as A/B/C/D where the BI limit per person is $A, BI limit per occurrence is $B, PD limit is $C and MP limit (if applicable) is $D. 13 * Includes adjustment to reflect elimination of PIP.

14 Part III: PIP & the Patient Protection and Affordable Care Act (PPACA) 14

15 Interplay Between PIP and PPACA PIP provides additional benefits beyond the medical services and care, such as lost wages and death benefits (estimated to be approximately 9% of PIP payments). In addition, even under PPACA: Some will refuse to purchase health insurance. Some will purchase high deductible plans. For those over age 65, Medicare Part A only covers hospital costs. Part B (Medical Services) and Part D (Prescription Drugs) are still optional. 15

16 Contact: Sandra Starnes Director, Property & Casualty Product Review Phone: (850)

17 Addendum to Presentation on Personal Injury Protection ( Insurance Senate Banking & Insurance Committee Workshop April 2, 2013 By Sandra Starnes, Director, Property & Casualty Product Review, Office of Insurance Regulation Excel Spreadsheet: Tab 1 Notes (explanation of limits, adjustments, rating examples, and Pinnacle Study on PIP Sunset Impact from 2007) Tab 2 Platinum A (Family) Rating Examples Companies used include Allstate Fire & Casualty, Direct General, GEICO General, Progressive American, State Farm 7 regions & cities (Central Ft. Lauderdale, Central Jacksonville, Pensacola, Central Tampa, Tallahassee, Central Miami, Central Orlando) Results: o BI, PD, PIP, UM, MP, COMP, COLL Total, Decreased limits & keep PIP, After elimination of PIP o Impacts on Minimum Required Limits* o Impacts on Full Coverage* Tab 3 Gold E (Young Female) Rating Examples Companies used include Allstate Fire & Casualty, Direct General, GEICO General, Progressive American, State Farm 7 regions & cities (Central Ft. Lauderdale, Central Jacksonville, Pensacola, Central Tampa, Tallahassee, Central Miami, Central Orlando) Results: o BI, PD, PIP, UM, MP, COMP, COLL Total, Decreased limits & keep PIP, After elimination of PIP o Impacts on Minimum Required Limits* o Impacts on Full Coverage* *Document exceeds visible screen size scroll to the far right to view this additional information.

18 Addendum to Presentation on Personal Injury Protection ( Insurance Comments: This analysis uses the Platinum A and Gold E rating examples submitted by some of the top PPA insurers in their recent rate filings. These two examples were chosen to look at the impact on a family (Platinum A) and a young female (Gold E). The descriptions of the rating examples are at the top of each sheet. Below is a summary of the limits(in thousands) provided in these examples: Platinum A Gold E BI 10/20 25/50 PD PIP UM 10/20 25/50 MP 1 5 For Platinum A, the premium was calculated for what it would have been if the limits had been increased to 25/50 for BI and UM and 5 for Med Pay (MP). The next step was calculating the premium after PIP is eliminated for BI and UM limits of 10/20 and 25/50 and MP limits of 1 and 5. For Gold E, the premium was calculated for what it would have been with PD limits of 10. The next step was calculating the premium after PIP is eliminated for BI and UM limits of 25/50 and MP limits of 5. (It was assumed that if the limits were higher, the insured would not reduce to lower limits because of changes in the law.) The following adjustments were made to reflect the elimination of PIP: 50% of PIP premium were added to BI premiums. 10% of PIP premiums were added to UM premiums. 20% of PIP premiums were added to MP premiums. These numbers are approximations. Support can be found in a Pinnacle study performed when PIP was sunsetting in From Pinnacle Study on PIP Sunset Impact Page 5 PIP Losses % BI 666,345, % UM 119,942, % MPC - NAF 24,033, % MPC - AF 272,087, % Total MPC 21.8% Liability 1,082,408, % Health Care 222,873, % Not Covered 55,718, % Total 1,361,000, % Platinum A shows the most possibilities. It includes looking at what the premium would have been under a minimum coverage policy (PIP/PD) to potential minimum requirements of BI/PD (10/20/10 and 25/50/10), and then BI/PD/MP limits of 25/50/10/5. The next section of the comparison looks at the impact for those consumers that purchase a full coverage policy (BI, PIP, PD, UM, MP, COMP and COLL) and what the impacts would be with elimination of PIP and going to limits of 10/20/10/1, 25/50/10/1 and 25/50/10/5. For Gold E, the example was already at the 25/50/50/5 level, which met the minimum requirements, so the main focus was on what the impact would have been for the minimum coverage policies using the 25/50 BI limits. Prepared by: Sandra Starnes 4/1/2013 3:00 PM

19 Addendum to Presentation on Personal Injury Protection ( Insurance Platinum A Rating Example DESCRIPTION: Age/Sex/Marital Status - Married Male Age 40, Married Female Age 40, No Additional Operators; Policy Term - One Year; Policy Tenure - New Business; Prior Insurance - Proof Available for Preceding Three Years; Coverages Purchased - BI, PD, PIP, MP, UM, COMP, COLL; Limits Purchased - 10/20,10,10,1,10/20 Non-Stacked, All limits in thousands of dollars, Unchanged for prior 3 years; Deductibles - $100 COMP, $250 COLL, $0 PIP; Number of Cars - One; Experience of Operators - No violations or accident involvement in past 3 years; Use and Mileage - Pleasure Use, 8,000 miles per year; Insurance Credit Score - 80th Percentile; Make and Model of Car - Toyota Camry LE; Age of Car - Latest model year (2007 as of October 1, 2006, etc.); Safety Devices - Drivers Side Airbag. Allstate Fire & Casualty Increased Limits and keep PIP After Elimination of PIP 10/ / /50 25/ /20 10/ /50 25/50 5 Region Description BI PD PIP UM MP COMP COLL Total: BI UM MP BI UM MP BI UM MP Broward (1) Central Fort Lauderdale $ $ $ $ $47.52 $ $ $2, $ $ $ $ $ $ $ $ $ Duval (2) Central Jacksonville $ $ $ $60.82 $27.08 $94.55 $ $1, $ $ $77.18 $ $ $ $ $ $ Escambia (1) Pensacola $ $ $ $52.60 $25.08 $89.98 $ $1, $ $ $71.48 $ $ $ $ $ $ Hillsborough (1) Central Tampa $ $ $1, $ $42.84 $94.36 $ $2, $ $ $ $1, $ $ $1, $ $ Leon (1) Tallahassee $ $ $ $52.60 $19.44 $98.12 $ $1, $ $ $55.40 $ $80.66 $75.57 $ $ $ Miami-Dade (2) Central Miami $ $ $2, $ $53.17 $ $ $3, $ $ $ $1, $ $ $1, $ $ Orange (2) Central Orlando $ $ $ $69.32 $32.86 $92.74 $ $1, $ $ $93.65 $ $ $ $ $ $ Direct General Note: Highest MP offered is $2,000 Increased Limits and keep PIP After Elimination of PIP 10/ / /50 25/ /20 10/ /50 25/50 2 Region Description BI PD PIP UM MP COMP COLL Total: BI UM MP BI UM MP BI UM MP Broward (1) Central Fort Lauderdale $ $ $1, $ $ $ $ $3, $ $ $ $1, $ $ $1, $ $ Duval (2) Central Jacksonville $ $ $ $ $48.71 $ $ $2, $ $ $74.04 $ $ $ $ $ $ Escambia (1) Pensacola $ $ $ $ $55.60 $ $ $2, $ $ $84.51 $ $ $ $ $ $ Hillsborough (1) Central Tampa $ $ $1, $ $ $ $ $3, $ $ $ $1, $ $ $1, $ $ Leon (1) Tallahassee $ $ $ $ $35.00 $ $ $2, $ $ $53.20 $ $ $ $ $ $ Miami-Dade (2) Central Miami $ $ $1, $ $ $ $1, $4, $ $ $ $1, $ $ $1, $ $ Orange (2) Central Orlando $ $ $ $ $76.00 $ $ $2, $ $ $ $ $ $ $ $ $ GEICO General Increased Limits and keep PIP After Elimination of PIP 10/ / /50 25/ /20 10/ /50 25/50 5 Region Description BI PD PIP UM MP COMP COLL Total: BI UM MP BI UM MP BI UM MP Broward (1) Central Fort Lauderdale $ $ $ $96.25 $23.98 $ $ $1, $ $ $ $ $ $ $ $ $ Duval (2) Central Jacksonville $ $ $ $55.67 $15.83 $ $ $ $ $97.42 $68.07 $ $77.26 $59.02 $ $ $ Escambia (1) Pensacola $ $ $ $44.00 $15.50 $ $ $ $ $77.00 $66.65 $ $61.48 $50.46 $ $94.48 $ Hillsborough (1) Central Tampa $ $ $ $83.33 $21.67 $ $ $1, $ $ $93.18 $ $ $98.38 $ $ $ Leon (1) Tallahassee $91.45 $89.65 $ $42.50 $10.60 $ $ $ $ $74.38 $45.58 $ $57.07 $39.73 $ $88.95 $74.71 Miami-Dade (2) Central Miami $ $ $ $82.00 $26.20 $ $ $1, $ $ $ $ $ $ $ $ $ Orange (2) Central Orlando $ $ $ $66.33 $18.43 $ $ $1, $ $ $79.25 $ $95.06 $75.89 $ $ $ Page 2 of 9

20 Addendum to Presentation on Personal Injury Protection ( Insurance Platinum A Rating Example Progressive American Increased Limits and keep PIP After Elimination of PIP 10/ / /50 25/ /20 10/ /50 25/50 5 Region Description BI PD PIP UM MP COMP COLL Total: BI UM MP BI UM MP BI UM MP Broward (1) Central Fort Lauderdale $ $ $ $ $ $ $ $3, $ $ $ $ $ $ $1, $ $ Duval (2) Central Jacksonville $ $ $ $ $73.00 $ $ $2, $ $ $ $ $ $ $ $ $ Escambia (1) Pensacola $ $ $ $ $60.00 $ $ $1, $ $ $ $ $ $ $ $ $ Hillsborough (1) Central Tampa $ $ $1, $ $ $ $ $3, $ $ $ $1, $ $ $1, $ $ Leon (1) Tallahassee $ $ $ $ $45.00 $94.00 $ $1, $ $ $79.20 $ $ $ $ $ $ Miami-Dade (2) Central Miami $ $ $1, $ $ $ $ $3, $ $ $ $1, $ $ $1, $ $ Orange (2) Central Orlando $ $ $ $ $ $ $ $2, $ $ $ $ $ $ $ $ $ State Farm Increased Limits and keep PIP After Elimination of PIP 10/ /20 1,000 25/50 25/ /20 10/ /50 25/50 5 Region Description BI PD PIP UM MP COMP COLL Total: BI UM MP BI UM MP BI UM MP Broward (1) Central Fort Lauderdale $ $ $ $96.31 $29.76 $ $ $1, $ $ $58.81 $ $ $ $ $ $ Duval (2) Central Jacksonville $ $ $ $64.60 $19.22 $ $ $1, $ $95.00 $36.38 $ $92.18 $74.38 $ $ $91.55 Escambia (1) Pensacola $ $88.41 $ $68.18 $18.16 $ $ $1, $ $ $34.13 $ $92.08 $65.97 $ $ $81.94 Hillsborough (1) Central Tampa $ $ $ $85.34 $31.24 $ $ $1, $ $ $61.96 $ $ $ $ $ $ Leon (1) Tallahassee $ $81.80 $ $53.72 $11.68 $ $ $ $ $79.00 $20.34 $ $70.12 $44.48 $ $95.40 $53.14 Miami-Dade (2) Central Miami $ $ $1, $87.56 $28.48 $ $ $2, $ $ $56.09 $ $ $ $ $ $ Orange (2) Central Orlando $ $ $ $60.95 $25.10 $ $ $1, $ $89.63 $48.89 $ $ $ $ $ $ Page 3 of 9

21 Addendum to Presentation on Personal Injury Protection ( Insurance Platinum A Rating Example Allstate Fire & Casualty Impacts on Minimum Required Limits Impacts on Full Coverage /10 10/20/10 /10 25/50/10 /10 25/50/10/5 10/20/10/1 10/20/10/1 10/20/10/1 25/50/10/5 25/50/10/5 25/50/10/5 Description PIP/PD BI/PD PIP/PD BI/PD PIP/PD BI/PD/MP Full Cov (Incl Full Cov (No Full Cov Full Cov (No Full Cov Full Cov (No (Incl (Incl Central Fort Lauderdale $1, $ % $1, $1, % $1, $1, % $2, $1, % $2, $2, % $2, $2, % Central Jacksonville $ $ % $ $ % $ $ % $1, $1, % $1, $1, % $1, $1, % Pensacola $ $ % $ $ % $ $ % $1, $1, % $1, $1, % $1, $1, % Central Tampa $1, $1, % $1, $1, % $1, $2, % $2, $2, % $2, $3, % $3, $3, % Tallahassee $ $ % $ $ % $ $ % $1, $ % $1, $1, % $1, $1, % Central Miami $2, $1, % $2, $2, % $2, $2, % $3, $3, % $3, $3, % $4, $3, % Central Orlando $ $ % $ $ % $ $1, % $1, $1, % $1, $1, % $1, $1, % Direct General Impacts on Minimum Required Limits Impacts on Full Coverage /10 10/20/10 /10 25/50/10 /10 25/50/10/2 10/20/10/1 10/20/10/1 10/20/10/1 25/50/10/2 25/50/10/5 25/50/10/2 Description PIP/PD BI/PD PIP/PD BI/PD PIP/PD BI/PD/MP Full Cov (Incl Full Cov (No Full Cov Full Cov (No Full Cov Full Cov (No (Incl (Incl Central Fort Lauderdale $1, $1, % $1, $1, % $1, $2, % $3, $3, % $3, $3, % $4, $3, % Central Jacksonville $ $ % $ $ % $ $1, % $2, $2, % $2, $2, % $2, $2, % Pensacola $ $ % $ $ % $ $1, % $2, $2, % $2, $2, % $2, $2, % Central Tampa $1, $1, % $1, $1, % $1, $2, % $3, $3, % $3, $4, % $4, $4, % Tallahassee $ $ % $ $ % $ $ % $2, $1, % $2, $2, % $2, $2, % Central Miami $1, $1, % $1, $1, % $1, $2, % $4, $3, % $4, $4, % $4, $4, % Central Orlando $ $ % $ $1, % $ $1, % $2, $2, % $2, $2, % $2, $2, % GEICO General Impacts on Minimum Required Limits Impacts on Full Coverage /10 10/20/10 /10 25/50/10 /10 25/50/10/5 10/20/10/1 10/20/10/1 10/20/10/1 25/50/10/5 25/50/10/5 25/50/10/5 Description PIP/PD BI/PD PIP/PD BI/PD PIP/PD BI/PD/MP Full Cov (Incl Full Cov (No Full Cov Full Cov (No Full Cov Full Cov (No (Incl (Incl Central Fort Lauderdale $ $ % $ $ % $ $ % $1, $1, % $1, $1, % $1, $1, % Central Jacksonville $ $ % $ $ % $ $ % $ $ % $ $1, % $1, $1, % Pensacola $ $ % $ $ % $ $ % $ $ % $ $1, % $1, $1, % Central Tampa $ $ % $ $ % $ $ % $1, $1, % $1, $1, % $1, $1, % Tallahassee $ $ % $ $ % $ $ % $ $ % $ $ % $ $ % Central Miami $ $ % $ $ % $ $ % $1, $1, % $1, $1, % $1, $1, % Central Orlando $ $ % $ $ % $ $ % $1, $ % $1, $1, % $1, $1, % Page 4 of 9

22 Addendum to Presentation on Personal Injury Protection ( Insurance Platinum A Rating Example Progressive American Impacts on Minimum Required Limits Impacts on Full Coverage /10 10/20/10 /10 25/50/10 /10 25/50/10/5 10/20/10/1 10/20/10/1 10/20/10/1 25/50/10/5 25/50/10/5 25/50/10/5 Description PIP/PD BI/PD PIP/PD BI/PD PIP/PD BI/PD/MP Full Cov (Incl Full Cov (No Full Cov Full Cov (No Full Cov Full Cov (No (Incl (Incl Central Fort Lauderdale $1, $1, % $1, $1, % $1, $1, % $3, $2, % $3, $3, % $3, $3, % Central Jacksonville $ $ % $ $ % $ $1, % $2, $2, % $2, $2, % $2, $2, % Pensacola $ $ % $ $ % $ $ % $1, $1, % $1, $2, % $2, $2, % Central Tampa $1, $1, % $1, $1, % $1, $2, % $3, $3, % $3, $3, % $3, $3, % Tallahassee $ $ % $ $ % $ $ % $1, $1, % $1, $1, % $1, $1, % Central Miami $1, $1, % $1, $1, % $1, $2, % $3, $3, % $3, $4, % $4, $4, % Central Orlando $ $ % $ $1, % $ $1, % $2, $2, % $2, $2, % $2, $2, % State Farm Impacts on Minimum Required Limits Impacts on Full Coverage /10 10/20/10 /10 25/50/10 /10 25/50/10/5 10/20/10/1 10/20/10/1 10/20/10/1 25/50/10/5 25/50/10/5 25/50/10/5 Description PIP/PD BI/PD PIP/PD BI/PD PIP/PD BI/PD/MP Full Cov (Incl Full Cov (No Full Cov Full Cov (No Full Cov Full Cov (No (Incl (Incl Central Fort Lauderdale $ $ % $ $ % $ $ % $1, $1, % $1, $1, % $1, $1, % Central Jacksonville $ $ % $ $ % $ $ % $1, $1, % $1, $1, % $1, $1, % Pensacola $ $ % $ $ % $ $ % $1, $ % $1, $1, % $1, $1, % Central Tampa $1, $ % $1, $1, % $1, $1, % $1, $1, % $1, $1, % $2, $1, % Tallahassee $ $ % $ $ % $ $ % $ $ % $ $ % $ $ % Central Miami $1, $1, % $1, $1, % $1, $1, % $2, $2, % $2, $2, % $2, $2, % Central Orlando $ $ % $ $ % $ $ % $1, $1, % $1, $1, % $1, $1, % Page 5 of 9

23 Addendum to Presentation on Personal Injury Protection ( Insurance Gold E Rating Example DESCRIPTION: Age/Sex/Marital Status - Single Female Age 25; Policy Term - One Year; Policy Tenure - New Business; Prior Insurance - Proof Available for Preceding Year; Coverages Purchased - BI, PD, PIP, MP, UM, COMP, COLL; Limits Purchased - 25/50,50,10,5,25/50 Non-Stacked, All limits in thousands of dollars, Unchanged for prior 3 years; Deductibles - $250 COMP, $500 COLL, $0 PIP; Number of Cars - One; Experience of Operators - One minor violation and one not-atfault accident in prior 3 years, licensed at age 16; Use and Mileage - Camry driven to work 12 road miles each way, 12,000 miles per year; Insurance Credit Score - 50th Percentile; Make and Model of Car - Toyota Camry LE; Age of Car - Latest model year (2007 as of October 1, 2006, etc.) and five model years old; Safety Devices - Drivers Side Airbag. Allstate Fire & Casualty Decreased Limits and keep PIP After Elimination of PIP 25/ / /50 25/50 5 Region Description BI PD PIP UM MP COMP COLL Total: PD BI UM MP Broward (1) Central Fort Lauderdale $ $ $1, $ $ $ $ $3, $ $1, $ $ Duval (2) Central Jacksonville $ $ $ $ $87.41 $ $ $2, $ $ $ $ Escambia (1) Pensacola $ $ $ $ $80.92 $ $ $2, $ $ $ $ Hillsborough (1) Central Tampa $ $ $2, $ $ $ $ $5, $ $2, $ $ Leon (1) Tallahassee $ $ $ $ $62.76 $ $ $1, $ $ $ $ Miami-Dade (2) Central Miami $ $ $3, $ $ $ $1, $6, $ $2, $ $ Orange (2) Central Orlando $ $ $ $ $ $ $ $2, $ $1, $ $ Direct General Decreased Limits and keep PIP After Elimination of PIP 25/ / /50 25/50 2 Region Description BI PD PIP UM MP COMP COLL Total: PD BI UM MP Broward (1) Central Fort Lauderdale $ $ $1, $ $ $ $ $4, $ $1, $ $ Duval (2) Central Jacksonville $ $ $ $ $93.86 $ $ $2, $ $ $ $ Escambia (1) Pensacola $ $ $ $ $ $ $ $3, $ $ $ $ Hillsborough (1) Central Tampa $1, $ $1, $ $ $ $ $5, $ $1, $ $ Leon (1) Tallahassee $ $ $ $ $68.00 $ $ $2, $ $ $ $ Miami-Dade (2) Central Miami $ $ $1, $ $ $ $1, $5, $ $1, $ $ Orange (2) Central Orlando $ $ $ $ $ $ $ $3, $ $ $ $ GEICO General Decreased Limits and keep PIP After Elimination of PIP 25/ / /50 25/50 5 Region Description BI PD PIP UM MP COMP COLL Total: PD BI UM MP Broward (1) Central Fort Lauderdale $ $ $ $ $ $ $ $1, $ $ $ $ Duval (2) Central Jacksonville $ $ $ $97.43 $95.63 $ $ $1, $ $ $ $ Escambia (1) Pensacola $ $ $ $77.00 $94.10 $ $ $1, $ $ $99.68 $ Hillsborough (1) Central Tampa $ $ $ $ $ $ $ $1, $ $ $ $ Leon (1) Tallahassee $ $ $ $74.40 $63.50 $ $ $1, $ $ $93.17 $ Miami-Dade (2) Central Miami $ $ $ $ $ $ $ $2, $ $ $ $ Orange (2) Central Orlando $ $ $ $ $ $ $ $1, $ $ $ $ Page 6 of 9

24 Addendum to Presentation on Personal Injury Protection ( Insurance Gold E Rating Example Progressive American Decreased Limits and keep PIP After Elimination of PIP 25/ / /50 25/50 5 Region Description BI PD PIP UM MP COMP COLL Total: PD BI UM MP Broward (1) Central Fort Lauderdale $1, $ $1, $ $ $ $1, $6, $ $1, $ $ Duval (2) Central Jacksonville $ $ $ $ $ $ $1, $4, $ $1, $ $ Escambia (1) Pensacola $ $ $ $ $ $ $1, $3, $ $ $ $ Hillsborough (1) Central Tampa $1, $ $2, $ $ $ $1, $6, $ $2, $ $1, Leon (1) Tallahassee $ $ $ $ $ $ $1, $3, $ $ $ $ Miami-Dade (2) Central Miami $1, $ $2, $ $ $ $1, $7, $ $2, $ $1, Orange (2) Central Orlando $ $ $1, $ $ $ $ $4, $ $1, $ $ State Farm Decreased Limits and keep PIP After Elimination of PIP 25/ / /50 25/50 5 Region Description BI PD PIP UM MP COMP COLL Total: PD BI UM MP Broward (1) Central Fort Lauderdale $ $ $ $ $85.98 $ $ $2, $ $1, $ $ Duval (2) Central Jacksonville $ $ $ $95.00 $52.42 $ $ $1, $ $ $ $ Escambia (1) Pensacola $ $ $ $ $49.10 $ $ $1, $ $ $ $ Hillsborough (1) Central Tampa $ $ $1, $ $90.70 $ $ $3, $ $1, $ $ Leon (1) Tallahassee $ $ $ $79.00 $28.40 $ $ $1, $ $ $ $79.15 Miami-Dade (2) Central Miami $ $ $1, $ $81.93 $ $ $3, $ $1, $ $ Orange (2) Central Orlando $ $ $ $89.63 $71.19 $ $ $2, $ $ $ $ Page 7 of 9

25 Addendum to Presentation on Personal Injury Protection ( Insurance Gold E Rating Example Allstate Fire & Casualty Impacts on Minimum Required Limits Impacts on Full Coverage /10 25/50/10 /10 25/50/10/5 25/50/10/5 25/50/10/5 Description PIP/PD BI/PD PIP/PD BI/PD/MP Full Cov (Incl Full Cov (No Central Fort Lauderdale $1, $1, % $1, $2, % $3, $3, % Central Jacksonville $ $1, % $ $1, % $2, $2, % Pensacola $1, $1, % $1, $1, % $2, $2, % Central Tampa $2, $2, % $2, $3, % $5, $4, % Tallahassee $ $ % $ $ % $1, $1, % Central Miami $4, $2, % $4, $3, % $6, $5, % Central Orlando $1, $1, % $1, $1, % $2, $2, % Direct General Impacts on Minimum Required Limits Impacts on Full Coverage /10 25/50/10 /10 25/50/10/2 25/50/10/2 25/50/10/2 Description PIP/PD BI/PD PIP/PD BI/PD/MP Full Cov (Incl Full Cov (No Central Fort Lauderdale $1, $1, % $1, $2, % $4, $4, % Central Jacksonville $ $1, % $ $1, % $2, $2, % Pensacola $ $1, % $ $1, % $3, $2, % Central Tampa $1, $2, % $1, $2, % $5, $4, % Tallahassee $ $ % $ $1, % $2, $2, % Central Miami $2, $1, % $2, $2, % $5, $4, % Central Orlando $1, $1, % $1, $1, % $3, $3, % GEICO General Impacts on Minimum Required Limits Impacts on Full Coverage /10 25/50/10 /10 25/50/10/5 25/50/10/5 25/50/10/5 Description PIP/PD BI/PD PIP/PD BI/PD/MP Full Cov (Incl Full Cov (No Central Fort Lauderdale $ $ % $ $1, % $1, $1, % Central Jacksonville $ $ % $ $ % $1, $1, % Pensacola $ $ % $ $ % $1, $1, % Central Tampa $ $ % $ $1, % $1, $1, % Tallahassee $ $ % $ $ % $1, $1, % Central Miami $ $ % $ $1, % $2, $2, % Central Orlando $ $ % $ $ % $1, $1, % Page 8 of 9

26 Addendum to Presentation on Personal Injury Protection ( Insurance Gold E Rating Example Progressive American Impacts on Minimum Required Limits Impacts on Full Coverage /10 25/50/10 /10 25/50/10/5 25/50/10/5 25/50/10/5 Description PIP/PD BI/PD PIP/PD BI/PD/MP Full Cov (Incl Full Cov (No Central Fort Lauderdale $2, $2, % $2, $3, % $6, $5, % Central Jacksonville $1, $1, % $1, $2, % $4, $4, % Pensacola $1, $1, % $1, $1, % $3, $3, % Central Tampa $2, $3, % $2, $4, % $6, $6, % Tallahassee $1, $1, % $1, $1, % $3, $3, % Central Miami $3, $3, % $3, $4, % $7, $7, % Central Orlando $1, $2, % $1, $2, % $4, $4, % State Farm Impacts on Minimum Required Limits Impacts on Full Coverage /10 25/50/10 /10 25/50/10/5 25/50/10/5 25/50/10/5 Description PIP/PD BI/PD PIP/PD BI/PD/MP Full Cov (Incl Full Cov (No Central Fort Lauderdale $1, $1, % $1, $1, % $2, $2, % Central Jacksonville $ $ % $ $1, % $1, $1, % Pensacola $ $ % $ $ % $1, $1, % Central Tampa $1, $1, % $1, $2, % $3, $3, % Tallahassee $ $ % $ $ % $1, $1, % Central Miami $2, $1, % $2, $2, % $3, $3, % Central Orlando $ $1, % $ $1, % $2, $2, % Page 9 of 9

27 PIP and PPACA Comparisons and Considerations PIP (HB 119, 2012) PPACA Comments Mandated Coverage Requires motorists to carry at least $10,000 of no-fault insurance; in accordance with 2012 legislation, PIP benefits include up to $10,000 to treat an emergency medical condition, and pay for 80% of reasonable medical expenses for the following services: Initial services in a hospital or a facility owned by a hospital and emergency transport and treatment. Upon referral, follow up services and care consistent with the initial diagnosis. PIP benefits are limited to $2,500 of reasonable medical expenses when the injured person does not have an emergency medical condition. Requires individuals to maintain coverage for federally-defined essential health benefits including: Ambulatory patient services Emergency services Hospitalization Maternity and newborn care Mental health and substance abuse Prescription drugs Rehabilitative and habilitative services and devices Laboratory services Preventive and wellness services Pediatric care including oral and vision care All of the services covered by PIP are also covered services under PPACA. Although compliance with the PPACA mandate is difficult to predict at this time, several estimates have been offered: o The Office of Economic and Demographic Research estimates that 2.1 million people will become newly insured over a four-year period. o At the end of that ramp up 1.8 million Floridians or 9.9% of the population are expected to remain uninsured. Providers Eligible for Payment Payment Rates Physicians, including medical doctors, osteopathic physicians, chiropractic physicians; Hospitals and facilities owned by a hospital; Ambulatory surgery center; Licensed physical therapists based upon a physician referral; Licensed health clinics meeting specific criteria; Services consistent with the underlying medical diagnosis. In accordance with a schedule of maximum charges. Some services permitted reimbursement at 80% of 200% of Medicare. Network providers including all licensed practitioners and facilities. Out-of-network providers under conditions specified by the policy. Negotiated between insurer and provider. PIP limitations on providers who can be reimbursed are responses to fraudulent activities, but may also limit access for medically necessary services. Network management is a costly administrative activity for a $10,000 policy. Charge schedules under PIP are likely to be higher than payments under many health insurance plans. Higher payments encourage overutilization.

28 Other Payment Requirements PIP (HB 119, 2012) PPACA Comments Timely payment requirements; Penalties for failure to pay timely. Prompt payment requirements under state law. Fraud Prevention Clinic registration; Possible loss of practitioners licenses for conviction of fraud. Insurers use a variety of techniques to prevent fraud including provider credentialing, prior authorization, utilization review, etc. Clinic registration requirements do not provide the basis for financial analysis and are largely ineffective at preventing fraud.

29 EDR Summary Statistics Adjusted Baseline with Adjusted Baseline Adjusted Baseline with Woodworking Woodworking and Medicaid Expansion Number Percent Number Percent Number Percent Total Population 18,849,600 18,849,600 18,849,600 Population Uninsured 4,040, % 4,040, % 4,040, % Newly Insured 2,169,986 2,246,380 2,549,380 General Population 2,169,986 2,169,986 1,819,750 Woodworking 76,394 76,394 Medicaid Expansion 653,236 Remain Uninsured 1,870, % 1,794, % 1,491, % In total, Medicaid Expansion would include 854,154 participants, which includes CHIP Transfer and Crowd Out. Difference in Newly Insured Adjusted Baseline with Woodworking Adjusted Baseline with Woodworking and Medicaid Expansion To Adjusted Baseline 76, ,394 To Adjusted Baseline with Woodworking 0 303,000 Numbers are only tied to the base population for 2011 and the ultimate levels will be higher due to population growth. Similarly, statistics are also drawn from the base population and the percentages would not be achieved until the conclusion of all ramp-up and phase-in periods. Source: March 4, 2013 presentation to the Select Committees on Patient Protection and Affordable Care Act, Economic Analysis of PPACA and Medicaid Expansion, updated based on the March 7, 2013 Social Services Estimating Conference, Estimates Related to Federal Affordable Care Act: Title XIX (Medicaid) & Title XXI (CHIP) Programs.