The Connecticut General Assembly ended its 2009 regular session by extending pro-consumer insurance legislation and not acting on a proposal that would have imposed unnecessary rating restrictions, according to the National Association of Mutual Insurance Companies (NAMIC).
“The session closed this week with positive developments on two critical issues affecting property/casualty insurers and their customers: the approval of legislation to extend the state’s flex-rating law for personal lines and the failure of a bill to encode in statute restrictions on insurers’ use of credit information,” said Paul Tetrault, NAMIC’s Northeast state affairs manager.
HB 6280, An Act Extending the Sunset Date for Personal Risk Insurance Rate Filings, extends the personal lines flex-rating law to July 1, 2011. NAMIC testified in favor of the bill before the Insurance and Real Estate Committee, stressing the successful track record of rate modernization laws.
“Enactment of this bill will allow consumers to continue to benefit from the positive effects of competition that the flex-rating system allows,” noted Tetrault. “The only downside is that legislators did not remove the sunset provision altogether. Since flex-rating statutes promote competition by providing insurers with confidence regarding their ability to adjust rates in the future, they can be more effective in providing the benefits of competition if its provisions provide insurers with a sense of stability regarding its continuation.”
A proposal affetcting insurers’ use of credit-based insurance scoring died with the end of the session. HB-6444, An Act Concerning Automobile Insurance and the Use of Credit History for Personal Risk Insurance, was originally designed to prohibit insurers from using credit information in rating and underwriting auto insurance. After NAMIC and others testified in opposition, the proposal was substantially amended.
“Considering its origin as an outright ban on insurers’ use of credit-based insurance scoring, the version of the bill being considered at the end of the session was not as problematic as it once was,” Tetrault observed. “Nevertheless, its failure is still a welcome development since it would have imposed a set of unnecessary rating restrictions.”
Another notable bill that died earlier in the legislative session with the passing of a committee deadline was SB-763, An Act Concerning the Connecticut Unfair Insurance Practices Act. NAMIC had opposed this “bad faith” bill, saying it would have increased litigation and hindered insurers’ ability to process claims appropriately.
“It was a very challenging session in many respects, so it is encouraging to mark its conclusion with the passage of a helpful bill and the failure of a problematic one,” commented Tetrault.
NAMIC worked closely with the Insurance Association of Connecticut and other industry allies on these bills and other legislative priorities.
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Posted: Friday, June 05, 2009 12:00:00 AM. Modified: Monday, June 08, 2009 9:19:42 AM.
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