Catching up with region’s insurance politics
In the Northeastern and Atlantic states, elected politicians are in the thick of deciding on legislation that could affect insurers, insurance agents and their insureds.
New Jersey lawmakers are considering restoring coverage under the New Jersey Surplus Lines Insurance Guaranty Fund for claims involving liquor law liability. The fund currently pays the claims of bankrupt surplus lines insurers for only medical malpractice liability and property insurance for owner-occupied dwellings of less than four dwelling units. The Professional Insurance Agents of New Jersey told legislators that liquor law liability claims tend to involve substantial damage amounts and “it would benefit consumers to have access to these funds in the event that their insurer is unable to pay their claims.”
Flexing ethics
The Connecticut Insurance and Real Estate Committee is weighing whether to move the state from prior approval of insurance rates to a “flex rating” system. The flex rating proposal would permit insurers to raise or lower rates by 12 percent without first obtaining regulatory approval. According to the Property Casualty Insurers Association of America, consumers stand to gain if flex rating is adopted. PCI said that on average, auto premiums are 10 percent lower in states with flex rating or open competition than in states with prior approval of rates.
The State Elections Enforcement Commission in Connecticut fined 16 members of Gov. M. Jodi Rell’s administration for illegally giving subordinates invitations to a Rell campaign fundraiser. The officials, including Insurance Commissioner Susan Cogswell, have each agreed to pay a $500 penalty for violating an ethics law that bans them from soliciting political contributions.
New York Gov. George Pataki has proposed stricter safety and insurance requirements for commercial passenger boats in response to last fall’s capsizing of the Ethan Allen tour boat on Lake George, an accident that killed 20 tourists. Pataki would mandate that operators of commercial boats involved in accidents undergo drug and alcohol tests. Pataki also wants a minimum level of marine insurance for all public vessels operating on state waters.
New York state senators, spurred by a woman whose son died at Playland amusement park in Rye, are considering a rating system for amusement park rides, along the lines of movies labeled G, PG and R. The guide could be in place by this summer if the bill passes.
Fire-safe smokes
Lawmakers in Annapolis are considering mandating that cigarettes sold in Maryland meet tough new fire safety requirements. The American Insurance Association says that cigarettes meeting this new code could save lives and significantly reduce property losses. All cigarettes in Maryland would have to demonstrate a reduced propensity to burn when left unattended. AIA told lawmakers that in 2004 there were 473 smoking-related fires in Maryland, resulting in 25 percent of all fire deaths in the state, and estimated property losses of $4.5 million. New York, Vermont and California have already adopted fire-safe cigarette requirements.
With the House and Senate at a stalemate over transportation funding, the Virginia General Assembly adjourned its regular 60-day session on March 11 without finishing work on a budget. That prompted Gov. Timothy M. Kaine to order a special session to begin on March 27. Setting the budget has become contingent upon settling differences over transportation funding. The Senate favors a package that requires $1.2 billion in new taxes, while the House has opposed raising taxes. Kaine, whose own proposal that included a hike in insurance premium taxes was rejected, has urged lawmakers to keep working until they come to an agreement.
Health assessments
Massachusetts Gov. Mitt Romney was undecided on whether he’ll support a health care reform bill until he can determine if it would require a tax increase. Romney said he supports the provision requiring everyone in the state to obtain health insurance, much the way all car owners must have auto insurance. But Romney said he needs more information about the bill’s section that would require businesses that don’t offer insurance to their workers to pay a so-called health care assessment. Romney is opposed to new taxes, but has signed off on an array of fee increases. “An assessment can be a tax or it can could be something that’s different from that. It depends on how it’s applied,” said Romney.