The following statement may be attributed to Liz Reynolds, Southeast state affairs manager for the National Association of Mutual Insurance Companies (NAMIC), on Gov. Sonny Perdue’s signing of the Insolvency Pool Bill.
“HB 1364 is an attempt to address a tragic situation, but it does so in violation of core principles of insurance. Requiring retroactive payment of claims by the Georgia Insurers Insolvency Pool for captive workers’ compensation insurers at ‘buy in’ amounts bearing no relationship to the true cost of the risk is like requiring an insurance company to pay a claim on a vehicle that was wrecked the day before coverage was purchased.
“Ultimately, employers who have paid actuarially priced premiums and chosen to provide workers’ compensation coverage to employees through financially sound insurers will bear the costs incurred by employers who made poor choices regarding risk cost transfer.
“HB 1364 will have far-reaching implications. Now that the bill is law, Georgia may become known as a state where the insurance industry and its customers cannot count on an appropriate and stable environment in which to do business. Georgia is already the only state allowing captive insurers to participate in a guaranty fund. Requiring payment of past claims that were never covered by the insolvency pool will lead to even greater insurance infamy for the state.”
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Posted: Wednesday, June 09, 2010 10:25:36 AM.
317.875.5250 - Indianapolis | 202.628.1558 - Washington, D.C.