New York: Department Directs Insurers to Account for Reduced Driving Due to Gas Prices

The New York Insurance Department has issued a circular letter directing auto insurers to account for reduced driving attributable to higher gas prices when they file for rate adjustments.

The circular letter, issued Aug. 6, states that insurers with pending rate filings must supplement their filings with a “written analysis of how the effects of the rising price of gas in New York are reflected in their rate level indications and rate requests.” Likewise, any new filings submitted subsequent to the date of the letter should include such an analysis.

According to the letter, consumers are responding to increased fuel costs by reducing their driving, “which should, in time, lead to a reduction in auto claims costs.”

“This letter is a great example of the improper regulatory second-guessing of business decisions that is inherent in a prior approval system,” noted Paul Tetrault, NAMIC’s Northeast state affairs manager. “Insurers operating in a highly competitive market don’t need to be told by a regulator to take one factor or another into account as they are constantly monitoring a wide range of factors and making decisions as they see fit.”

Questions regarding the directive should be sent by email to DrivingGasPrice@ins.state.ny.us or by telephone to Bruce Green, supervising actuary, at 212 480-5519.

Direct questions to NAMIC State Affairs Manager Paul Tetrault.

Posted: Tuesday, August 12, 2008 12:00:00 AM. Modified: Tuesday, August 12, 2008 10:08:22 AM.

(317) 875-5250 - Indianapolis | (202) 628-1558 - Washington, D.C.

Contact NAMIC | Press | Advertise | Sponsor

We are 1,400 property/casualty insurance companies serving more than 135 million auto, home and business policyholders, with more than $196 billion in premiums accounting for 50 percent of the automobile/homeowners market and 31 percent of the business insurance market. We are the largest and most diverse property/casualty trade association in the country, with regional and local mutual insurance companies on main streets across America joining many of the country’s largest national insurers who also call NAMIC their home. More than 200,000 people are employed by NAMIC members.