Cecil Pearce, a vice president with the Washington-based American Insurance Association, said the governor and industry agreed that the no-fault law was not worth saving.

“AIA and others in the industry have for several years urged legislators to pass substantive reforms aimed at removing the ongoing, growing fraud and abuse from the no-fault's personal injury protection (PIP) system,” he said.

Otherwise, the true beneficiaries of no-fault continue to be trial lawyers and shady medical providers, and not consumers, he added.

Mr. Pearce said that key reforms necessary to fix the system, such as attorney fee reform and a medical fee schedule, were not achievable this session. “That view turned out to be correct. Instead, the legislature decided to delay the law's effective repeal date to January 1, 2009,” he said.

AIA believes a veto override is unlikely despite strong support for the bill in the legislature

David Reddick, National Association of Mutual Insurance Companies senior state affairs manager, said that, “In vetoing Senate Bill 2114, Gov. Bush has shown us that a courageous leader isn't afraid to back away from making a tough decision.”

Reddick said the next challenge for insurers will be getting policyholders ready to move to a tort-based system of auto insurance. Under the current law, renewal notices describing how the new system will work will begin being sent out this October.

“Educating a generation and a half of drivers who have lived under the current no-fault system will be a challenge, but one that our members will be looking forward to,” Reddick said.

Florida lawmakers have amended the law more than 50 times since no-fault was first instituted in 1971.

Three years ago, the legislature passed and the governor signed a bill repealing the no-fault law, effective October 2007. With his veto of SB 2114, the repeal date remains October 1, 2007.

Article updated with additional information 6:55 p.m.