Insurance Card Size A California Issue
NU Online News Service, Sept. 30, 12:07 p.m. EST?The American Insurance Association is opposing a proposed regulation that would end wallet-sized proof-of-insurance cards for consumers.
The California Department of Insurance lacks the statutory authority to mandate a single format for proof-of-insurance cards, said the Sacramento, Calif., office of the AIA, based in Washington, D.C. The organization formally expressed its opposition in a letter to the department on Sept. 23.
Under the proposed regulation, all insurance companies would be required to change the cards they currently provide to policyholders as proof of insurance. Insurers would be required to use a single form mandated by the department.
California law requires all drivers to provide proof-of-insurance coverage when they register their vehicles.
"This regulation goes beyond the Department's authority to regulate how insurers provide proof of insurance to their policyholders," said Bill Gausewitz, AIA assistant vice president, Western region.
He continued that the California Vehicle Code gives the department authority to approve the form each insurer provides to policyholders. "The code also specifies what information must be included on the card. However, the law does not give the department authority to mandate that all insurance companies use a single form."
The regulation will have an adverse effect on all insurers writing personal automobile insurance in California because the department will end up micromanaging insurers by stipulating layout and size of cards, "and even the weight of the paper," Mr. Gausewitz said. "The authority to approve a form does not give the department the authority to design a form or dictate format."
Mr. Gausewitz said that consumers would be the biggest losers under the regulations. Even if the department did have the authority to require a specific format for the card, it would still be a bad idea.
"Most insurers now give their policyholders a proof-of-insurance card that is either wallet size or three-by-five inches. The cards are usually small and easily carried. This proposal requires every driver to get a 3.5- by 8.5-inch card. Try putting that in your wallet," concluded Mr. Gausewitz.
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