State policymakers were very busy in 2012, with somesurprising legislative actions. Lawmakers introduced numerousproperty-casualty-related bills, which mostly benefited theindustry and consumers. 

Election Day 2012 was the first time since redistricting thatcitizens in 44 states voted for more than 6,000 seats. Democratsregained some of the seats they lost after the blowout 2010elections, but the landscape didn't change dramatically. At least180 seats and eight chambers went back into the "D" column, butRepublicans captured four previously Democratic chambers. Andaccording to the National Council of State Legislators (NCOIL),"The 2012 state legislature partisan composition shows that thenation may have the lowest number of divided state legislatures inmore than 30 years … 26 legislatures will be led by Republicans; 19legislatures will be controlled by the Democrats; and four aresplit." Nebraska has a nonpartisan, unicameral legislature.

Statehouses will be even busier this year as legislators worklonger sessions. The property-casualty insurance industry mostlikely will see some of the more contentious issues being debatedthis year.

Related: Read the article "NAMIC Gives CuomoThumbs-up on N.Y. Workers' Comp Reform Plan" by Mark E.Ruquet.

NAMIC's top agenda remains the adoption of modernization lawsthat will create rate-approval standards less restrictive thanprior approval. 

Last year in North Carolina, an auto insurance study committeeaccepted a report calling for improvements in the rate-makingprocess. The legislature will consider the committee'srecommendations this year. The Tennessee legislature enactedcommercial lines rate modernization in the prior session, and NAMICand other industry advocates continue to be engaged in strategictalks about flex rating with Pennsylvania regulators. NAMIC also isserving on a flex-rating study committee in Nevada. Mostimportantly, there were no successful attempts last year to returnany state's property-casualty insurance rate-setting procedure toprior approval. 

Underwriting freedom is the essence of our business, butmany  naysayers don't see it that way. It wasn't that longago when 35 states introduced bills to ban credit-based insurancescoring (CBIS). We were welcomed to a new legislative mindset lastyear as only a handful of states debated such bills to ban orseverely limit the practice. 

Although Kentucky, Rhode Island, Tennessee and West Virginiaintroduced CBIS-ban bills, none of them moved. But by far the mostastonishing change came in Michigan, where there was a monumentalshift in the legislative environment—the General Assembly adoptedand the governor signed insurance scoring legislation based on theNCOIL model. The day that piece of legislation was signed ended adecade-long battle on this topic in the state. 

Once again, trial attorneys will be working the halls of stategovernments, pursuing anti-civil-justice-reform initiatives. But aswe saw last year, not much transpired to benefit this segment ofthe law industry—to the chagrin of lawyers.

We made positive headway on a relatively newissue known as third-party litigation funding. Also known aslitigation financing or lawsuit lending, the term refers to thepractice of providing money to a party to pursue a potential orfiled lawsuit in return for a share of any damages award orsettlement. NAMIC played a key role in shaping the debate bypublishing the issue analysis paper "Third-Party LitigationFunding: Tipping the Scales of Justice for All," which has softenedthe stance of litigation-funding proponents on legislation meant tocurb the practice. Although no prohibition bills passed, eightstates defeated litigation-finance-industry-sponsored legislationthat would legitimize the practice. Expect more debate in2013. 

Related: Read the another article by Neil Alldredge"The Value of Unsolicited Advice".

A few small but important tort reform proposals were adoptedlast year: Michigan passed legislation allowing expert testimony tobe delivered via video link, while Virginia adopted legislationthat more narrowly defines "defective drywall." Also note that fewserious efforts to move anti-civil-justice-reform legislationexist. 

The U.S. experienced more than its share of major storms in2012, prompting some states to focus on natural disaster andcoastal challenges. In Connecticut and Rhode Island, insurancedepartments or the legislatures answered the punch ofHurricane/Tropical Storm Irene that hit in the summer of 2011 byrevising guidelines for acceptable application of hurricanedeductibles (Connecticut) and proposing a weather-related claimsbill that among other things would limit application of a hurricanedeductible to once in a calendar year (Rhode Island). 

So far the destruction that befell the East Coast fromSuperstorm Sandy has reached more than $25 billion in insuredlosses. The downgrading of Sandy from a hurricane to a superstormresulted in states prohibiting property insurers from applying thehurricane deductible. This deductible is an importantrisk-management tool and disallows hurricane deductibles tonegatively impact policyholders by causing insurers to re-evaluatetheir coastal exposures.

Related: Read the article "Clean Out the RegulatoryAttic" by Neil Alldredge.

Yet the property-casualty insurance industry did experience somewins in this arena. The industry's strongest showings were inFlorida, which passed legislation to lower assessments prescribedby Citizens, the insurer of last resort, and in Alabama, whichpassed legislation allowing policyholders to create tax-freecatastrophe savings accounts and give premium tax credits tocompanies for coastal writing. 

About the only "trend" we saw in state legislatures waslegislation focusing on those fraudulent contractors (we call them"storm scammers") who sweep in after a devastating storm to takeadvantage of homeowners when they are at their most vulnerable.Thanks in part to the industry coming together, 14 states passedlegislation to protect consumers from fly-by-night contractors.This trend will continue in 2013. 

All in all, it was a pretty good year for our industry instatehouses across the country. We hope we can say the same thingabout 2013, but the majority of those sitting in Senate and Housechambers will have two or fewer years of experience. And that meansone thing—educating state legislators on the business of ourindustry.