The Property Casualty Insurers Association of America’s (PCI) released its state legislative agenda for 2010 today, and in its crosshairs are reforms to New York’s no-fault auto insurance system, the advancement of 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, SVP, 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.”

PCI asserts that 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, the association 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 says it 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. And in North Carolina, PCI plans to 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 that PCI asserts it 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.

Additionally, 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. 

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,” he said. “That’s a message we will deliver to public policymakers at every opportunity.”

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