March 7, 2008

Free Market Believers Triumph in Georgia

A troublesome holdover from the 2007 session, Georgia SB 276 was amended by the House Judiciary (Non-Civil) Committee Monday to allow consumers the choice between stacked UM coverage and UM coverage with a set off, as well as adding rate modernization language. On Thursday the House passed the committee substitute and the Senate gave its concurrence. The bill now goes to the governor for his signature.

The auto rate modernization language, which was decried by Georgia Insurance Commissioner John Oxendine, provides that rate, rating plan, rating system, or underwriting rule for private passenger motor vehicle insurance other than the mandatory minimum limits policies shall be effective upon filing and shall be implemented without approval of the insurance commissioner.

“The General Assembly’s free market ‘true believers’ understand the value of a healthy, competitive environment for consumers,” said Emily Bagwell of the Georgia Association of Property Casualty Insurance Companies. But “a key [for passage] was that minimum limits coverage would continue to be regulated.” GAPCIC is NAMIC’s advocacy partner in Georgia.

SB 276 was introduced during the 2007 session with the intent to allow uninsured motorist limits to “stack” without offset in underinsured motorist claim situations. Bill supporters complained that consumers were not “getting what they pay for” and seemed not to care when insurance industry representatives and Commissioner Oxendine explained that such a change would lead to higher uninsured motorist coverage rates for all drivers.

In addition to the rate modernization provision, the amended bill now allows consumers to choose uninsured motorist coverage that does not “stack,” as in current law or to select “stackable” uninsured motorist coverage - meaning it will pay up to the policy limit if necessary whether the at-fault driver is uninsured or underinsured.

Liz Reynolds, NAMIC Southeast state affairs manager, congratulated the Georgia General Assembly on its efforts. “The Legislature has expanded consumer choice while continuing to provide regulatory protection for mandatory coverage and made it possible for companies to more quickly react to changing market conditions and actively compete for business, which also benefits consumers.”

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