INDIANAPOLIS (March 3, 2008) – Legislation advocated by The National Association of Mutual Insurance Companies (NAMIC) was passed by the Kansas Senate, taking a significant step toward insurance rate modernization. The legislation, SB 560, was unanimously approved and now heads to the House.
“Chairwoman Ruth Teichman and the members of the Senate Financial Institutions and Insurance Committee showed tremendous leadership in crafting an excellent bill in committee and ensuring full Senate approval,” said Joe Thesing, NAMIC’s director of state affairs, who led off industry testimony before the Senate committee.
The bill is based on the National Conference of Insurance Legislators’ Flex-Rating Model Act and would create a flex-rating system allowing property/casualty insurers to increase rates up to 12 percent without regulatory approval. An amendment, originally raised in committee by Democratic Sen. Jim Barone, was approved by the Senate that removes the floor for rate decreases. At the urging of NAMIC and other industry advocates, amendments offered in committee by the insurance department were ultimately not included in the Senate-passed version of the bill except for one technical change. The House committee is expected to take up the bill on March 11.
Senate Bill 560 is the bi-product of a unanimous recommendation made last year by the Kansas Insurance Department Fee Modernization and Rating Laws Task Force. The task force was established to study personal lines regulatory modernization and other topics. NAMIC was a member of the task force and made the motion to adopt the NCOIL Flex-Rating model. Local industry advocates played an integral role ensuring the bill was introduced.
“We believe the primary barrier to fundamental reform of the property/casualty industry is price regulation of insurance rates. This belief is the cornerstone of NAMIC’s agenda for change in the states.
“Enactment of Senate Bill 560 will benefit consumers by encouraging more insurers to enter the market, thus enhancing competition. Furthermore, passage of this bill will send a strong message to Congress that states can improve and modernize the state system of insurance regulation,” Thesing concluded in his testimony.
The model was overwhelmingly adopted by NCOIL in 2003 and is viewed as an interim step toward rate regulation based on an open competition system. Currently, eight states have flex-rating laws.
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Posted: Monday, March 03, 2008 12:00:00 AM. Modified: Monday, March 03, 2008 3:55:12 PM.
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