Minnesota’s Commissioner Wilson Backs Move to File and Use

Minnesota’s position as the last remaining state in the Upper Midwest to regulate personal-lines insurance forms and rates on a prior approval basis may be in danger because an industry-backed bill to change to file-and-use has garnered the insurance regulator’s support.

House File 1699 and companion bill Senate File l462 would give auto and home insurers the right to use policy forms and rates once their receipt has been verified by state’s Commerce Department, which regulates insurance.

Commerce Commissioner Glenn Wilson spoke at the Minnesota Independent Insurance Agents’ convention in Bloomfield, Minn., last month and said the department is already working hard to approve forms and rates more quickly.

“We’re involved in trying to make our department as efficient as possible,” he told convention attendees. “When we came into office two years ago, our department was recognized as a laggard in electronic process and in reviewing and approving filings both for price and policy, with the whole thing taking up to a year.”

Now, Wilson said, the department has as its goal to approve a domestic insurer’s filing within 15 days and 60 days for an insurer based elsewhere. Twenty-eight percent of filings are now processed automatically via the System for Electronic Rate and Form Filing; the department’s goal is 60 percent. Wilson said the department has sent letters to insurers asking them to send their filings via SERFF.

Wilson’s initiatives aside, local observers say the odds are very good the regulatory changes will pass if they are put up for a vote in the Minnesota State Legislature, which Republicans hold by a slim margin.

“Regulatory modernization I would give it a 70 to 90 percent handicap it’ll pass,” said Al Parsons, president and CEO of the Insurance Federation of Minnesota. “It came out of both insurance committees with large numbers.”

Wilson, appointed in 2003 by Republican Gov. Tim Pawlenty, supports the bill.

“The consumer is in the same position either way,” Wilson told IJ. “We’ve got clear, regulatory responsibility. Then the question becomes how much time and money do we want to spend in terms of getting a policy approved. How much value is added by our reviewing it rather than saying to the insurance company, ‘Our laws are public. You make sure, as is the case in almost every other industry, that you’re in compliance with our law. We have the regulatory responsibility and the muscle to see that you do.’?

“I’m not sure,” he added, “that some of the companies like it because they force us to do their work. It removes the onus from them to us. We’re doing their work, and it’s costing the agency more money. I don’t see how the consumers necessarily benefit.”

The legislative session is scheduled to end May 23.