AIA: LOSS HISTORY BILL GOES TOO FAR

The American Insurance Association said that North Dakota’s Senate Bill 2186 goes too far in regulating the use of loss history reports for homeowners insurance and plans to ask Republican Gov. John Hoeven to veto the legislation. According to the lobbying group, SB 2186 goes beyond any other current or proposed loss history regulation or law in the country.

If enacted, it would conceal property losses and property damage that otherwise ought to be reported from insurers and limit the history of claims that may be investigated to determine if fraud may be involved.

Loss history information databases such as the Comprehensive Loss Underwriting Exchange contain information about claims filed on properties in the U.S. These databases enable insurance companies to access prior claim information in the underwriting and rating process. More than 90 percent of insurers writing homeowners coverage provide claims data to such databases.

AIA said there also is a strong correlation between a particular property’s claims history and the probability of additional losses at that location. Properties with a history of claims are likely to have more claims filed in the future. SB 2186 was passed by the Legislature on April 1.