INDIANAPOLIS (Oct. 12, 2005)––The National Association of Mutual Insurance Companies (NAMIC) opposes a package of 14 bills unveiled Monday by Michigan Gov. Jennifer Granholm and legislators, which includes a required 20 percent cut in homeowners and automobile insurance rates and a proposal to ban the use of credit-based insurance scoring.
“Headline grabbing proposals unveiled one year before a major election is commonplace; however, what is not common is introduction of dangerous proposals that will increase insurance rates and ultimately harm Michigan’s already vulnerable economy,” stated NAMIC North Central Region State Affairs Manager Joe Thesing.
Introduction of Granholm’s proposals comes on the heels of the state’s appeal of a lower court ruling that Insurance Commissioner Linda Watters overstepped her authority when she filed new rules reducing base rates and barring insurers from providing discounts to policyholders with good credit scores.
“Insurance is one of Michigan’s only growth sectors; passage of these proposals would send a clear message to perspective businesses that economic growth and job creation are not a real priority of the current administration,” Thesing added.
“NAMIC strongly supports the right of insurers to use credit information in making underwriting and rating decisions. Credit-based insurance scoring is a strong predictor of insurance loss that benefits policyholders directly through better rates and more choices in the market place. Prohibiting Michigan insurers from utilizing this valuable tool would undercut pricing accuracy and would result in less competitive auto and homeowners insurance markets,” Thesing said.
“Placing more severe restrictions on insurers and banning credit-based insurance scoring for auto and homeowners policies will have two results: higher prices and less availability,” Thesing concluded.
The Governor’s package would also:
“These are outdated ideas contrary to every trend in the country. Government dabbling in price setting, arbitrary redundant regulation and unfounded punitive measures will only result in less competition, higher rates and a market that is not good for companies or consumers,” said Thesing. “NAMIC will work with our industry partners to defeat each measure.”
For further information, contact
Rick Nelson, APR
Posted: Wednesday, October 12, 2005 12:00:00 AM. Modified: Wednesday, October 12, 2005 1:54:25 PM.
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