WASHINGTON--The National Conference of Insurance Legislators has rejected an effort to get states to adopt laws prohibiting municipalities from charging fees when police or fire departments respond to an accident or prepare a report on one.

They acted based on testimony from Regina Moore, president of Cost Recovery Corp., a Dayton, Ohio, company which has developed a fee-based system to provide such information, and from law enforcement officials from communities in Ocala, Fla. and Longwood, Ohio.

All three argued that such fees are necessary because cash-strapped communities would otherwise have to curtail necessary police and fire services if they could not charge those fees, especially to those involved in accidents that live outside the community.

The model law was proposed by North Dakota State Rep. George Keiser, R-Bismarck. In presenting the proposal, he said that following testimony on the issue, he would recommend the model be permanently deferred because a model could not be crafted that would mesh with existing state laws.

Based on the suggestion from Rep. Keiser and the testimony of the witnesses, the NCOIL panel voted unanimously to drop the idea entirely, or as it phrased it, "permanently defer consideration" of the proposed model.

NCOIL acted despite the pleas of the insurance industry that charging such fees constitutes double taxation.

Joseph Thesing, director of state affairs for the National Association of Mutual Insurance Companies, told the panel that the industry recognizes that municipalities are struggling to balance budgets in order to continue providing vital services and that accident response fees can appear an attractive alternative to raising taxes.

But, Mr. Thesing told the panel, municipalities imposing these fees are supported by tax dollars intended to provide the very services for which the municipalities are charging fees.

"These services are not typically covered by insurance, but if more municipalities undertake these billing practices, more insurers will be paying more claims and, ultimately, those claims will result in higher rates," Mr. Thesing warned.

"Vendors are convincing municipalities that the insurance industry is sitting on a piggy bank--this committee well knows that insurance companies responsibly manage reserves in order to pay covered claims, which is why insurance exists," Mr. Thesing said.

He also noted that 24 municipalities have recently chosen to either vote down or rescind such ordinances.

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NCOIL Won't Pass Ban On Emergency Service Fees

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