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Matt Brady

Matt Brady
Public Affairs Director
Federal Affairs

Telephone: 202.580.6742
mbrady@namic.org

Lisa Floreancig

Lisa Floreancig
Public Affairs Director
State Affairs

Telephone: 317.876.4246
lfloreancig@namic.org

Rhode Island Budget Provision Mandating Purchase of Motor Vehicle Reports Would Increase Costs, NAMIC Says

In testimony to the House Finance Committee today, the National Association of Mutual Insurance Companies (NAMIC) voiced concern with a proposed budget provision that would require insurers to purchase motor vehicle reports on drivers from the state every three years.

Budget Article 24, Section 8 would amend the statute that governs insurers’ use of credit-based insurance scores in the rating and underwriting of personal auto insurance by adding a provision requiring insurers using such scores to “obtain a customer’s official driving abstract at least once every three (3) years.”

“This provision would essentially force insurers to purchase motor vehicle driver's license records from the Division of Motor Vehicles so that the state can collect additional revenue at the expense of insurers and their policyholders,” Paul Tetrault, NAMIC state affairs manager for the Northeast, asserted in testimony submitted to the Finance Committee. “Because it would unnecessarily impose significant costs on insurers that would ultimately be borne by Rhode Island drivers, NAMIC opposes this provision and urges that it be removed from the budget.”

Tetrault explained in the submitted statement that the amount charged by the Division of Motor Vehicles for motor vehicle records, $20.00, is high, so that insurers typically find it cost-effective to obtain driving record information from third-party sources rather than from the state. “In other words, due to the high cost of the reports, the state has essentially priced itself out of the market for such information,” he observed, noting that the apparent intent of the budget provision is to overcome this economic reality by forcing insurers to purchase the reports from the state. “In NAMIC’s view, it is simply inappropriate for the state to force insurers to purchase a product from the state.”

Contact: Lisa Floreancig
Director of Communications
NAMIC
lfloreancig@namic.org

Posted: Thursday, March 24, 2011 9:14:16 AM. Modified: Thursday, March 24, 2011 9:14:35 AM.

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