The National Association of Independent Insurers contends that legislation that would allow insurance companies operating in Rhode Island to adjust rates up or down in a 7 percent range would provide flexibility for insurers and convenience for regulators and would represent “the first step in regulatory modernization for the state’s insurance market.”
“The current system which requires companies to get insurance department approval for every minuscule rate adjustment drains valuable resources at both ends,” said Gerald L. Zimmerman, counsel for the Illinois-based NAII. “By allowing flexible rating, the proposal will allow insurers to service their customers and the department to concentrate on solvency and rate filings.”
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The Senate Corporations Committee heard testimony on the bill last week. It would permit insurance companies to adjust rates up or down, with a 7 percent ceiling for any insured without prior department approval.
“This bill is especially important now, with so many state insurance departments focused on streamlining and standardizing operations,” said Zimmerman.
In other NAII news, the organization is busy making its case against the plaintiff’s trial bar — which has introduced bills on insurer bad faith, lead paint liability, and unfair claims practices.
“The wording in all of this legislation clearly reflects the influence of an aggressive plaintiff’s trial bar,” said Zimmerman. “We’re actively opposing these bills because of the detrimental effect they would have on the Rhode Island insurance market.”
The Senate Judiciary Committee last week heard testimony on a bill that would make it an act of bad faith for an insurer to offer claims settlement based on computer generated software.
“At a minimum, this bill would allow the trial bar to use this act as leverage in settling claims if an insurance company uses computers in settling claims,” Zimmerman said. “It is a bad bill, a bad idea, and we oppose it strenuously.”
Elsewhere on the docket, the legislature is considering the following bills:
- SB 273, the companion bill to SB 275, which would make it an act of bad faith for insurers to use computer software to develop a claims settlement figure;
- SB 586, which would require an underinsured motorist insurer to respond to policyholders within 30 days of receiving a written request to settle with the liability insurer for the policy limits, and if the underinsured motorist insurer does not respond, the request is deemed to be granted.
- HB 5501, which would eliminate some exclusions to the existing lead-paint liability law; and
- SB 725, which would prohibit the use of credit history in underwriting auto liability insurance.
“All these bills are designed to expand the liability of the insurance industry, and provide another deep-pockets source for plaintiffs’ attorneys,” Zimmerman said. “They provide no real benefit to consumers, and if passed, would threaten the stability of the Rhode Island insurance market.”
The NAII, based in suburban Chicago, is the nation’s leading full-service property-casualty trade association, representing more than 690 member companies writing $98 billion of premium annually. NAII members write more than 33 percent of the nation’s property-casualty insurance and more than 28 percent of the Rhode Island insurance market.
