INDIANAPOLIS (Feb. 21, 2008) – The National Association of Mutual Insurance Companies (NAMIC) today urged members of a Kansas Senate panel to pass rate modernization legislation. Senate Bill 560 would establish a flex rating system that allows property/casualty insurers to increase or decrease rates within a 12 percent flex band without regulatory approval.
SB 560 is based on a model law developed by the National Conference of Insurance Legislators. It allows regulators to review rate filings within the 12 percent flex band, but not reject an increase as excessive as long as the market remains competitive. Eight states currently have flex-rating laws in place.
“Enactment of Senate Bill 560 will benefit consumers by encouraging more insurers to enter the market, thus enhancing competition,” said NAMIC state affairs director Joe Thesing. “According to a recent report by the Insurance Information Institute, flex rating allows insurers to respond quickly to loss trends and other market conditions. Research suggests that in states with a flex-rating system rates decline.”
In testimony before the Senate Financial Institutions and Insurance Committee, Thesing commended the Legislature for enacting commercial lines reforms in 2006 and said passage of SB 560 would be the next logical step to ensure that Kansas insurance markets remain competitive. “Passage of this bill will send a strong message to Congress that states can improve and modernize the state system of insurance regulation,” he said.
Thesing told the committee that NAMIC strongly supports measures to reform the state insurance regulatory system as well as market conduct and financial solvency regulation that protect the interests of consumers and policyholders. “Our ultimate goal is to achieve a regulatory system that befits a mature industry operating in a highly competitive marketplace,” he said.
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Posted: Thursday, February 21, 2008 12:00:00 AM. Modified: Thursday, February 28, 2008 2:26:10 PM.
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