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PCI: 2011 May Present Legislative Opportunities for Positive Reforms that Promote Competitive Markets

Posted on 04 Jan 2011

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Auto body repairs, building codes, credit-based insurance scoring, no-fault auto insurance, tort reform and workers compensation reform top the list of 2011 state advocacy objectives for the Property Casualty Insurers Association of America (PCI).

“The sweeping change in the political landscape following the 2010 midterm elections present PCI with opportunities to advance a pro-consumer agenda that supports healthy, competitive insurance markets across the nation,” said Paul Blume, senior vice president of state government relations for PCI. “We believe there are some opportunities to take positive steps on a wide range of issues. However, we also recognize that the legislative environment could be challenging in some states and we are prepared to fight against proposals that could be detrimental to consumers and the insurance marketplace.”

Going into the 2011 legislative sessions there will be many new legislators and governors as well as elected and appointed state insurance commissioners.  PCI is making it a top priority to meet with these lawmakers and state regulators to discuss the important role insurers play as job providers and how free market principles strengthen the insurance marketplace and benefits consumers.

Auto body repair issues such as anti-steering, labor rates and aftermarket parts are once again expected to be hot issues in 2011. To help control costs and promote customer service, PCI will oppose legislative efforts that would restrict insurers’ ability to make recommendations or suggestions to consumers on individual repair facilities or that would impede insurers’ ability to manage the claim repair process and control costs on behalf of consumers.

PCI will also be advancing building code reform in states such as Alabama, Mississippi and Texas.  “Enhanced building codes and mitigation measures are useful inland as well as in coastal areas,” said Blume. “We would like to see these states consider legislation that would incentivize retrofitting and promote loss reduction. By strengthening homes and businesses against the types of windstorms and flooding the inland areas face and the potential hazards on the coast -- all residents of a state are more safe and secure.”

Texas lawmakers will be facing several important decisions in 2011 concerning the sunset of the Department of Insurance and Division of Workers Compensation.  PCI’s legislative agenda in Texas will include supporting the recommendations of the sunset commissions and fighting amendments and proposals that add regulatory requirements such as prior approval on personal lines rates or new workers compensation processes or benefits.

As in the past several years, PCI anticipates that there will be efforts to curb the use of credit-based insurance scoring and other underwriting tools pushed in all corners of the country.  Last year 26 states introduced legislation to ban or further restrict the use of insurance scoring. “Over the years we have found that educating lawmakers and regulators is one of our strongest tools in the effort to defeat bills that prohibit the use of insurance scoring,” said Blume. “We will continue to work with lawmakers and regulators to help them better understand the benefits of insurance scoring and the negative effects that a ban would have on consumers.”

Cutting fraud and enacting positive no-fault auto insurance reforms will also be a top priority for PCI in 2011. Once again, New Jersey and New York will take center stage with no-fault personal injury protection reform but rampant fraud and other persistent problems will keep the issue alive and active in Florida, Michigan and Minnesota.

Lawsuit reform is important to consumers, businesses and the insurance industry and will be a priority issues in 2011. “We understand the significance of lawsuit reform in fostering an environment that promotes job growth and economic development,” said Blume.  “PCI intends to work with the business community by providing liability expertise and other tort-related knowledge to assist in achieving meaningful reforms.”

PCI is also prepared to work with the business community to address a wide variety of workers compensation issues ranging from very specific improvements to defending against measures that would increase costs to considering reforms that would encourage competitive marketplaces.

The National Association of Insurance Commissioners (NAIC) and state regulators are expected to seek enactment of the NAIC Model Holding Company Act (MHCA) in as many states as possible. PCI is supportive of the changes to the MHCA and is working with the NAIC and state regulators to have it adopted uniformly by the states.