For those who enjoy their politics wild and unpredictable, 2010 will be a great year. Concerns regarding national issues such as the economy, health care reform and the war in Afghanistan will loom large. But as former Speaker of the House Tip O'Neill once said, "All politics is local."
The 2010 election cycle is shaping up to be one of the most interesting in a long time. There will be 37 gubernatorial races and a host of state legislative elections in 2010. These elections will not only impact party control of legislatures, but shape what happens during redistricting after the census.
A close examination of the gubernatorial races finds 15 governors term limited and at least five others who have decided to pursue other offices or chosen not to run. Because traditionally the party that controls the White House tends to lose governorships in the midterm elections, the 20 open races will add to the excitement on election night.
The upcoming elections also will affect state legislative agendas. Improving state economies, taxes and issues that have budgetary impact will continue to dominate discussions in the state houses. But with an eye toward the elections, political issue management will become tricky as some controversial issues may not receive much of a hearing while others become fodder for campaign advertising.
Looking forward, there certainly will be some surprises--there always are-- but the insurance industry can expect to see many familiar issues debated in state houses across the country.
Coastal insurance issues also will continue to be important in 2010. This past year, PCI and others in the industry have worked with state and federal lawmakers to protect coastal homeowners by establishing sound property insurance policy measures. Legislators in key states such as Florida, North Carolina and Texas championed reform that will improve insurance markets for all consumers by addressing underfunded, state-run coastal residual markets.
PCI supports long-term solutions that promote competitive private insurance marketplaces, strong loss prevention strategies and financially sound methods of funding catastrophe losses without unfairly burdening insurance policyholders and taxpayers in areas less prone to large-scale natural disasters. Looking ahead to next year, PCI will work with Florida lawmakers to continue work from 2009 and pursue additional reforms to the property insurance system to reduce the risk on the state and all taxpayers. Lawmakers, consumers, insurers and businesses must address the fundamental problems in the Florida market to bring more choice and competition to consumers with a healthy and competitive insurance system.
A broad range of trial lawyer issues are likely to carry over onto next year's agenda. To cite one example, onerous "bad faith" legislation has been filed in 18 states, and remains pending in 5 states as of October 2009. So far this year, only Minnesota has passed bad faith legislation. As the result of legislative compromise, the so-called "one way loser pays" bill allows for 10 percent pre-judgment interest from the submission of the claim, but does not allow for attorneys fees. Meanwhile, legislation in 12 states-- Colorado, Connecticut, Florida, Georgia, Indiana, Iowa, Maine, Montana, Nevada, New Mexico, Oregon and Rhode Island --either has been defeated or withdrawn from consideration.
The most recent action on this issue comes out of Michigan, where in July, the House passed a package of bills that could increase the number of frivolous lawsuits, impose excessive restrictions on claims handling and drive up insurance costs. According to a PCI analysis, an estimated $554.2 million in insurance premium increases could be passed on to Michigan's insured drivers and homeowners as a result of this legislation.
Laws governing insurers' handling of claims already exist, and Michigan's insurance regulator already has the power to check into claims handling and issue cease and desist orders, impose fines and revoke certificates of authority. As the bills move to the Senate, PCI is working with the industry to oppose the bills and educate lawmakers about the true costs of the legislation.
Auto body repair is another issue that was the subject of legislation in 2009, and we anticipate it will be debated in state legislative sessions. This year anti-steering legislation was considered in Connecticut, Massachusetts, Missouri, New York, Oregon, Wyoming and Wisconsin. PCI has been focused on protecting consumers from increased costs and supporting their right to an informed choice in selecting repair facilities. As a result, lawmakers have not advanced significant legislation on this issue that would harm consumers. However, with active auto body repair associations-- and in the case of Connecticut, where the attorney general has become involved with this issue--2010 is likely to be another contentious year.
Restrictions on credit-based insurance scores and underwriting tools are once again expected to be widely considered by legislatures across the country. PCI is a steadfast supporter of underwriting and rating insurance based on an individual's risk of loss. When insurers are able to properly underwrite risks, consumers benefit with lower rates and more choices. Because insurance scoring is an objective and accurate method for assessing the likelihood of insurance loss, PCI strongly opposes legislation that would prohibit the use of this tool.
Rising medical costs will continue to be one of the most significant issues for workers' compensation insurers in 2010. However, higher costs do not translate into higher patient satisfaction or better return-to-work rates. To help control rising costs, PCI will continue to advocate for cost containment measures that will address the problems in a given state, such as medical fee schedules, pharmaceutical fee schedules, utilization review or treatment guidelines.
PCI will continue to pursue proposals that are fair and carry out the primary goal of workers' compensation--which is to provide the injured workers immediate, quality treatment and the best care available, so they can return to work as soon as they are able and continue to be productive members of society.
The coming year is likely to present many challenges and opportunities for our industry. While the property-casualty industry remains healthy and competitive, the financial crises and health care reform could have negative repercussions in the state houses.
There are interest groups that will attempt to use all insurers as a political punching bag. As a result, it is important for us not just to deflect attacks, but also to look for opportunities to advance our agenda and tell the story of how our industry helps protect peoples' property and dreams and rebuilds lives
and communities.
