The New York Department of Financial Services (DFS) today issueda bulletin to auto insurers doing business in New York urging themto adopt "usage-based insurance" (UBI) programs.

Under these voluntary programs, consumers can install telematicsdevices in their cars that—with the consumers' consent—catalog dataon driving habits and provide discounts to those found to be morecareful drivers.

The announcement by DFS Superintendent Benjamin Lawsky followedhis approval of a program at Esurance aimed at helping parentsprevent their teenagers from texting and driving.

Lawsky said under Esurance's voluntary program, policyholdersmay install an in-car device that, in conjunction with an Esuranceapp installed on their teen driver's phone, can limit the use oftexts, emails, applications and phone calls while driving (with theexception of 911). The device can also catalog driving behavior,including speeding, hard braking, fast acceleration and otheractivities, Lawsky said.

Lawsky also said he has also approved telematics programsoffered by a half-dozen other insurers including Allstate, Allianz,the Hartford, Progressive, State Farm and Utica National.

"Programs from additional insurers are currently underconsideration," Lawsky said.

In a statement, Lawsky made clear that the New York DFS "iscommitted to the protection of consumer privacy." Therefore, hesaid, DFS has approved UBI programs only where they are offered toconsumers on a voluntary basis. "Telematics programs can be awin-win for insurers and drivers. They can save policyholders moneyand save lives by making our roads safer," Lawsky said. "Weencourage all New York auto insurers to submit plans to ourdepartment making use of this innovative technology."

Lawsky said, "UBI programs give less cautious drivers theincentive to drive more carefully, which can help reduce autoaccidents." He said that as more customers gain better drivinghabits, an insurer can experience lower overall costs, which couldlead to lower auto-insurance premiums statewide.