The National Association of Mutual Insurance Companies (NAMIC) provided testimony Jan. 31 to the Insurance and Real Estate Committee of the Connecticut Legislature supporting a bill that would extend the sunset date for flex-rating filings to July 1, 2015, but opposing a provision that would reduce the flex band from 6 percent to 3 percent.
“Because flex-rating statutes promote competition by providing insurers with confidence regarding their ability to adjust rates in the future, a flex-rating statute will be more effective in providing the benefits of competition if its provisions provide insurers with a sense of stability regarding its continuation,” testified John Murphy, NAMIC’s Northeast state affairs manager. “For this reason, NAMIC would urge the committee to consider extending the sunset much further or eliminating it altogether.”
Murphy also expressed opposition to the proposed reduction of the flex band from 6 percent to 3 percent. He noted that the flex-rating system has worked well in Connecticut but cutting the flex band in half will significantly undermine its purpose and value. “The self-evident goal of the flex-rating approach is to imbue the system with the flexibility to react readily to fluctuations in the market and to do so without unnecessary regulatory scrutiny,” he said. “The dramatic reduction proposed in this legislation will severely limit that flexibility and force a re-direction of regulatory resources and attention to filings that don’t warrant that level of review.”
NAMIC, the national trade association of mutual property/casualty insurers, supports the enactment of rate modernization statutes and regulatory changes that allow insurers operating in a competitive market to adjust rates in response to changing market conditions. Since the passage of Connecticut’s flex-rating statute in 2006, rate modernization laws have been enacted in Kansas, Georgia, and New York.
Contact: Lisa Floreancig
Public Affairs Director - State & Policy Affairs
Posted: Friday, February 01, 2013 1:53:33 PM. Modified: Thursday, September 19, 2013 10:22:13 AM.
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