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Rate Modernization, Protecting Underwriting Tools, Tort Reform Top 2005 NAMIC National State Agenda

INDIANAPOLIS (Jan. 14, 2005)––Rate modernization, protection of underwriting tools and tort reform top the 2005 national state legislative agenda of the National Association of Mutual Insurance Companies (NAMIC).

“NAMIC state advocacy is national in scope,” said Roger H. Schmelzer, senior vice president-state and regulatory affairs department. “NAMIC’s regional state affairs managers will execute strategies with NAMIC's state insurance trade association partners to advance this priority agenda in targeted states.”

Schmelzer said NAMIC’s number one public policy priority is to foster more competitive insurance markets by “modernizing the state system of insurance regulation through the adoption of laws liberalizing rate approval standards. We are encouraged to see a growing number of states consider legislation to move away from a prior approval standard for rates.”

While acknowledging the need for focused laws governing disclosure of broker compensation agreements, NAMIC will tell policymakers that regulating broker compensation must not hinder this needed reform of state insurance laws, added Schmelzer.

“Protecting underwriting tools is how NAMIC describes any attempts by lawmakers to limit an insurer’s ability to use credit-based insurance scores for rating and underwriting purposes or to impose any restrictions on the use of loss history such as the Comprehensive Loss Underwriting Experience (C.L.U.E.) database,” said Schmelzer. “The recent Texas Department of Insurance study is another in a long line of findings that proves the relationship between credit-based insurance scores and frequency of claims. Consumers benefit when insurers price policies according to risk.”

“NAMIC will work in the state legislatures to reduce the excesses of our current tort system,” Schmelzer said. “These excesses usually occur when courts stop resolving disputes and morph into venues for the pursuit of money or become arenas in which to circumvent the regulatory or legislative process.”

NAMIC will advocate that policymakers strengthen insurers’ self-evaluative privilege protection when considering NCOIL’s Market Conduct Surveillance Model Act.

NAMIC will actively advocate passage of the Asbestos Claims Priorities Model Act. Under the Act, asymptomatic plaintiffs who meet filing rules that require specific medical proof from appropriate medical personnel may have their claims placed on an inactive docket. The case may be removed from that docket and set for trial only if the plaintiffs can prove that they have an illness that is related to asbestos exposure. The statute of limitations is tolled–does not run–while cases are on inactive docket status, protecting the rights of exposed asymptomatic individuals. The Act also prohibits “venue shopping” by requiring that claims must be filed in the jurisdiction where the primary harm of exposure occurred.

As the only national trade association that advocates on behalf of the nation’s farm mutual insurers, NAMIC will also seek to modernize statutes governing farm or county mutuals.

NAMIC supports repeal or amendment of the Standard Fire Policy requirement to allow for the exclusion of loss or damage due to fire ensuing from terrorist events. The Terrorism Risk Insurance Act of 2002 provides the intended reinsurance backstop for commercial lines of insurance, but makes no provision for personal lines carriers.

“NAMIC is anticipating an active year for property/casualty insurers,” Schmelzer said.

Posted: Friday, January 14, 2005 12:00:00 AM. Modified: Monday, January 17, 2005 10:13:35 AM.

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