Insurance Trade Org. War? NAII Disses PADIC

The creation of Sacramento, Calif.-based PADIC by a group of small to medium size California insurance companies came in the wake of merger activity by NAII and the Alliance of American Insurers.

The two are working to form one organization to be called Property Casualty Insurers Association of America (PCI) to be based in Des Plaines, Ill. Results of a final merger vote by membership of the two groups is expected shortly.

PADIC said it was forming its association because it felt such an association could speak more effectively to California state regulators and legislators about their needs.

Mr. Sorich said, in an e-mail statement to National Underwriter, "Property-casualty insurers need to speak with a more unified voice before legislators and regulators in order to effectively influence public policy.

"The support among members of both NAII and the Alliance of American Insurers for the merger of those two organizations is strong evidence of insurers' understanding that the consolidation of resources–not further fragmentation–is in their best interests. Consolidation does not mean that the interests of small insurers are ignored.

"ACIC is committed to the principle that public policy positions are developed through a process that takes into account the needs of all member companies, large and small, domestic and nondomestic, multiline and niche."

According to Mr. Sorich, there are a number of qualified state and national trade groups "already effectively representing insurers' interests in California. While ACIC and NAII work cooperatively with these groups, we hope the formation of a new trade organization will not further dilute the effectiveness of the industry's public policy efforts."

The Alliance declined to comment, other than to say that they were aware of the NAII's comments and felt that it was a sufficient statement on the issue.

In response, Pete Gorman, executive director of PADIC said in a statement, "The formation of a new state trade association for domestic insurers should
not be seen by anyone as ?diluting the industry's public policy efforts.'
PADIC shares those objectives that seek to balance industry health with public
needs."

Mr. Gorman said PADIC often hears from regulators, public interest groups and trial lawyers that the insurance industry "is a faceless monolith that does not care about its policyholders. As domestic insurers, PADIC members are able to put a personal face on our business by reminding legislators, regulators and the consumer that their businesses make important economic and social contributions to their counties and to the state. They also serve as a vital market stabilizer."

In Mr. Gorman's view, "California has lost many of its domestic insurers in recent decades because these messages apparently were not heard by public policymakers."