Posted on 06 Jan 2010
Top issues on the Property Casualty Insurers Association of America's (PCI) state legislative agenda for 2010 include reforming New York's no-fault auto insurance system, advancing market-based solutions in coastal markets, defeating a series of misguided auto insurance and bad faith bills in Michigan and protecting the use of risk-based underwriting tools.
"With budget and economic issues expected to dominate the agenda for state legislatures in 2010, PCI will push for important insurance reforms that benefit consumers by controlling costs, promoting competition and creating healthy, stable marketplaces,” said Paul Blume, senior vice president, state government relations for PCI. “Our agenda will help consumers in this tough economy. By addressing state specific issues such as no-fault fraud in New York, regional issues involving coastal insurance and multi-state issues such as credit-based insurance scoring, PCI is working to improve insurance markets for consumers across the country.”
New York’s no-fault automobile insurance system is once again spiraling toward crisis with medical provider fraud and lawsuit abuse driving up costs for consumers. To address this problem, PCI is urging lawmakers to enact comprehensive reforms that will complement regulatory reforms being proposed by the insurance department.
“Fraud and lawsuit abuse by medical providers force New Yorkers to pay significantly higher insurance rates,” said Blume. “Our reform agenda as of today includes instituting medical protocols/utilization reviews, requiring arbitration for resolving no-fault disputes, streamlining the process for adjudicating no-fault claims by permitting parties with no-fault disputes of less than $5,000 to submit proof based on a sworn affidavit from doctors. We also support the implementation of fair burden-of-proof conditions that require plaintiffs to have an objective and qualified witness to substantiate all items on their medical bills.”
On coastal insurance issues, PCI will continue to advance market-based regulatory and legislative solutions, strong building codes and mitigation efforts. In Florida, PCI will support the recently introduced Consumer Choice Act, which calls for a market-based system giving consumers increased choices for their insurance needs. In North Carolina, PCI will defend against rollbacks of the 2009 reforms to the North Carolina Beach Plan.
There are several important issues in Michigan that are carrying over to 2010. PCI will continue to protect consumers by opposing a series of bills that could have disastrous consequences on the state’s citizens and economy. The legislative package would change the rating law to a prior approval system, impose excessive restrictions on claims handling through a bad faith law, and prohibit the use of insurance scoring, education and occupation in the rating process.
“PCI along with auto and homeowner insurers doing business in Michigan have formed a coalition, Protecting Michigan’s Future, to defend Michigan consumers from misguided legislation that threatens to increase insurance costs and harm the state’s economy,” said Blume.
Once again the use of credit-based insurance scoring is expected to be widely debated. PCI is a steadfast supporter of underwriting and rating insurance based on an individual’s risk of loss. When insurers are able to properly underwrite risks, consumers benefit with lower rates and more choices. Because insurance scoring is an objective and accurate method for assessing the likelihood of insurance loss, PCI strongly opposes legislation that would prohibit the use of this powerful tool.
Rising medical costs will continue to be one of the most significant issues for workers compensation insurers in 2010. However, higher costs do not translate into higher patient satisfaction or better return to work rates. To help control these rising costs, PCI will continue to advocate for cost containment measures that will address the problems in a given state, such as medical fee schedules, pharmaceutical fee schedules, utilization review or treatment guidelines. In addition, federal health care reform will have impacts on workers compensation. You cannot fundamentally alter the national health care system and not affect workers compensation and other property and casualty coverages. For example, if the final legislation includes price controls on provider reimbursements, we will see cost-shifting by providers to property and casualty insurers “to recoup lost revenue.” PCI will continue to pursue proposals that are fair and carry out the primary goal of workers’ compensation – which is – to provide the injured workers immediate, quality treatment and the best care available, so they can return to work as soon as they are able and continue to be productive members of society.
Finally, Blume indicated that PCI remains dedicated to promoting and protecting competitive private insurance markets in the statehouses and before the NAIC. “Regulatory frameworks that support free and fair competition benefit consumers, help to promote stable insurance markets and spur innovation,” said Blume. “That’s a message we will deliver to public policymakers at every opportunity.”