Posted on 18 Jul 2011
The American Insurance Association (AIA) announced its positions on two model acts which are due to be considered for reauthorization at the National Conference of Insurance Legislators’ (NCOIL) Summer Meeting in Newport, Rhode Island on July 14-17.
AIA indicated its support for the Property-Casualty Flex-Rating Regulatory Improvement Model Act previously adopted in 2004. It establishes a 12 percent flex-band within which an insurer may file rate changes on an expedited basis during any 12 month period.
“AIA supports NCOIL’s flex-rating model act,” said Ray Farmer, AIA Southeast region vice president. “Enabling insurers to quickly respond to market trends promotes a healthy insurance marketplace.”
AIA, however, noted its opposition to NCOIL’s Model Act Regarding the Use of Insurance Claims History Information in Homeowners and Personal Lines Residential Property Insurance. The Model Act restricts rating and underwriting based solely on previous property owner experiences and sets various other insurer parameters on the use of claims data. It was previously adopted in 2005.
“AIA opposes reauthorization of NCOIL’s model act which restricts adverse actions based on a property owner’s claims history,” said Eric M. Goldberg, AIA Mid-Atlantic region vice president. “Claims history is an accurate predictor of the potential for future claims and therefore remains a legitimate underwriting tool for assessing risk.”