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Property/Casualty Insurance Industry Encouraged as Michigan Legislature Adjourns

INDIANAPOLIS (Dec. 21, 2009) – The Michigan Legislature adjourned Saturday without taking any further action on a property/casualty insurance bill package passed by the state’s House of Representatives last week. The Senate did not take up the legislation.

The package would have, among other things, stripped insurers of underwriting tools, including credit-based insurance scoring, used to more accurately assess risk and set actuarially sound rates, which would have led to higher rates and possibly higher unemployment in Michigan.

“We are extraordinarily pleased that the Michigan Senate did not take up these bills before adjournment. This will give us time to educate legislators on the importance of underwriting tools in not only assessing risk but keeping rates low,” said Erin Collins, Mid-Atlantic state affairs manager for the National Association of Mutual Insurance Company (NAMIC), the largest national trade association representing property/casualty insurers.

While Democrats hold a majority in the House and the abbreviated package passed along party lines, House Republicans, according to the Detroit News, objected to the bills, stating that the bills would result in auto insurance companies leaving the state. According to Collins, 55,000 Michigan jobs are in the insurance industry. “In a state that consistently struggles with economic issues and unemployment, attacking one of the few healthy industries the state has left seemed foolish,” she said.

In states such as New Jersey and Massachusetts, rate filing restrictions drove insurers from the market and kept rates high. However, recently, those states have opened their markets to competition and have seen increased choice for consumers, more businesses moving into the state, and decreased rates.

“In the next session, Michigan legislators should be pursuing policies that are found in New Jersey, Massachusetts, and most-recently Ohio,” Collins said.

Last week, Ohio Gov. Ted Strickland unveiled the Ohio Department of Development’s Strategic Plan for the Insurance Industry. The plan focuses on development and growth, and pledges to help create and retain jobs for Ohioans in the insurance industry.

“Michigan legislators need to look to its neighbor to the southeast,” Collins said. “Ohio understands the important role the insurance industry plays in the economic strength of the state. It’s time Michigan gains some understanding, too.”

For further information, contact
Lisa Floreancig
Director of Communications
State & Policy Affairs
(317) 876-4246

Posted: Monday, December 21, 2009 12:00:00 AM. Modified: Monday, January 04, 2010 1:26:36 PM.

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