read Read

e-mail E-mailprint Print

NAMIC 2005 Survey of New State Insurance Laws Summary and Analysis

This edition of the NAMIC Annual Survey of New State Insurance Laws covers more than 625 property/casualty laws approved by 48 state legislatures in 2005. While all state legislatures met during 2005, the following states are included in this year's survey with the number of new property/casualty laws noted in parenthesis for each.

Alaska (5), Arizona (6), Arkansas (11), California (6), Colorado (10), Connecticut (20), Delaware (12), Florida (28), Georgia (20), Hawaii (8), Idaho (16), Illinois (11), Indiana (10), Iowa (6), Kansas (9), Kentucky (15), Louisiana (36), Maine (17), Maryland (12), Massachusetts (3), Michigan (2), Minnesota (15), Mississippi (10), Missouri (6), Montana (11), Nebraska (1), Nevada (10), New Hampshire (11), New Jersey (1), New Mexico (6), New York (11), North Carolina (24), North Dakota (25), Ohio (4), Oklahoma (4), Oregon (17), Pennsylvania (1), Rhode Island (21), South Carolina (23), South Dakota (16), Tennessee (45), Texas (17), Utah (11), Vermont (1), Virginia (58), Washington (9), West Virginia (19), Wyoming (6).

States with no new laws directly affecting the property/casualty industry in 2005 were Alabama and Wisconsin.

The "top 10 states" list this year with the most new laws directly impacting the property/casualty industry was led by Virginia with 58 new laws. Tennessee followed with 45, and Louisiana had 36 new laws. Florida (28), North Dakota (25), North Carolina (24), South Carolina (23), Rhode Island (21), Connecticut (20) and Georgia (20) round out the "top 10" list of states. At the other end of the spectrum were states like Nebraska, New Jersey, Pennsylvania and Vermont, which each had one law passed directly affecting the property/casualty industry. Wisconsin's legislature passed AB 766, the purpose of which was to restore caps on non-economic damages in medical malpractice cases; however, this legislation was vetoed by Gov. Jim Doyle.

There were few surprises in the issue trends emerging from this 2005 survey of new state laws. As expected, automobile insurance represents the most common issue trend, with more than 190 automobile insurance-related laws recorded. Thirty-eight states enacted motor vehicle related laws. They are: Arizona, Arkansas, California, Colorado, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Montana, Nevada, New Hampshire, New York, North Carolina, North Dakota, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington and West Virginia.

This survey identifies measures addressing, among others, motor vehicle traffic safety, proof of coverage / financial responsibility, UM/UIM, salvage title, and cancellation and nonrenewal requirements. New laws expanding requirements for the use of child restraint systems for small children, and DUI thresholds, were among the most frequently recorded laws.

Workers' compensation was again the second most common issue trend to surface among the many new state laws identified in this report. Thirty-two different states enacted workers' compensation legislation in 2005. Several specific subcategories stand out as the most common themes. They are: Benefits, Claims and Authorized Treatments; Disputes and Settlements; Workers' Compensation Funds; Omnibus State Law Changes; Contractor Requirements; Fees / Taxes / Services; State Oversight; and Miscellaneous New Provisions.

Tort reform was the third most common issue trend identified in this 2005 report. Closely mirroring prior years' NAMIC report findings, new provisions within this category include medical malpractice, asbestos litigation reform, expert witnesses, and class action suits. More comprehensive tort reform legislation was enacted in Missouri and South Carolina. A total of 60 laws, in 32 states, were enacted in 2005.

Identity theft, catastrophe related issues, and military personnel related legislation were among the newer, significant themes to emerge from this year's survey. Legislatures in at least 20 states, including Colorado, Connecticut, Delaware, Florida, Georgia, Louisiana, Maine, Minnesota, Montana, Nevada, New Mexico, North Carolina, North Dakota, Ohio, Pennsylvania, Rhode Island, Tennessee, Texas, Virginia and Washington, passed laws relating to identify theft. Restricting the use of a consumer's social security number, prohibiting "skimming", which occurs when a scanner or other device is used to take encoded information from the magnetic strip on the back of a credit or other payment card and placed another card with the intent to defraud, and notification to individuals when the security of their personal financial data has been breached, were recurring themes.

In light of the year's natural disasters, including Hurricanes Katrina, Rita and Wilma, legislatures in Florida and Louisiana enacted laws related to catastrophe insurance, including enacting tougher statewide building ordinances. The Louisiana legislature met in special session in late 2005 to address issues, and passed laws, specific to Hurricanes Katrina and Rita. In addition, North Carolina created a disaster relief fund for victims of the 2004 hurricane season.

Legislation prohibiting insurers from reducing or canceling coverage (except for nonpayment), refusing to issue, or renew a policy, or surcharging a newly issued or renewed policy due to an individual's failure to maintain coverage during a period in which the individual was deployed or called to active military duty was passed in Colorado. Other military personnel related laws were enacted in Florida, Indiana, Kansas, Louisiana, Maryland, Mississippi and Virginia.

New categories were created for corporate governance, farm mutual laws and producer compensation issues. Producer compensation legislation, requiring certain insurance producers to disclose their compensation arrangements to consumers prior to the delivery of a new insurance contract, was passed in Connecticut, Rhode Island, South Dakota and Texas.

New laws pertaining to captives, catastrophe related legislation, CLUE, E-Commerce / Electronic, FAIR plans, financial regulation, fire insurance, fraud, guaranty funds, insurance scoring, licensure, military personnel, mold, premium tax, producer compensation, rate regulation, reinsurance, self audit, state building codes, state regulator, structured settlements, surplus lines, telephone sales, terrorism coverage, unfair practice, uniform commercial code, omnibus, and miscellaneous insurance provisions were the other more general categories identified in 2005.

Inside This Summary

The following provides a brief summary and analysis of each of the notable key issue trends that emerge from NAMIC's 2005 listing of new laws.

Search for an Issue Overview

Motor Vehicle Insurance

Workers' Compensation

Tort Reform

Identify Theft

Catastrophe Related Legislation

Military Personnel Insurance Related Legislation

Additional Emerging New Law Issue Trends