NAMIC CONCERNED ABOUT OREGON’S SINGLE CONSTRUCTION LIABILITY INSURER

Oregon’s Construction Claims Task Force (CCTF) has designated a single private insurer to provide liability insurance coverage for the entire construction industry. That decision is worrisome, according to the National Association of Mutual Insurance Companies (NAMIC).

“A competitive commercial liability insurance marketplace composed of a significant number of insurance providers affords the construction industry a wide variety of insurance products and rates to consider when addressing its business needs,” said NAMIC West Region State Affairs Manager Christian Rataj. “In contrast, insurance markets that are monopolistic tend to have fewer insurance products for the consumer to select from, which could adversely affect the affordability and availability of commercial liability coverage for small business contractors.”

According to NAMIC, HB 2078 authorizes the Director of the Department of Business and Consumer Services to retain a qualified expert to study options regarding actuarially sound insurance reforms, alternatives and pricing, including loss control discounts or the designation of a single private insurer to provide required construction contractor insurance.

The expert may review other options consistent with the overall broad goals of the legislation including self-insurance, assigned risk pools, contractor pools and associations, a claim fund for consumers to access for correcting construction defects, a loan fund for contractors to borrow monies necessary to repair construction defects, and the use of voluntary or mandatory warranties.

“NAMIC will file written comments with the Task Force expressing concern about the monopolistic, anti-competition impact of establishing a single private insurer to provide insurance coverage to the construction industry, and the adverse impact this proposal could have for the insurance consumer,” Rataj said.