NCOIL Eyes Loss History Database Regulation

For the past several years, use of databases such as the Comprehensive Loss Underwriting Exchange in underwriting homeowners' policies has sparked concerns that it was unfairly preventing homeowners from obtaining coverage.

Rhode Island State Sen. Dave Bates, R-Barrington, introduced a model measure at NCOIL's meeting last November, but lawmakers asked that he develop a revised version with more consensus from insurers.

At the time he noted that with 32 states either having imposed regulatory measures or considering them in regard to loss history databases, it was time to attempt to gain some uniformity on the issue.

Mr. Bates now has a revised measure on the table that would prohibit carriers from taking an adverse action based solely on the claims/loss history of the previous property owner, unless the insurer completed a physical inspection of the property.

The measure also limits use of previous homeowner loss history data stemming from natural causes as well as water damage and claims more than five years old.

Industry representatives at the November NCOIL meeting asserted that such a measure was too restrictive.

A competing measure sponsored by the Independent Insurance Agents and Brokers of America and the American Insurance Association would eliminate Sen. Bates' exemption of natural causes and water damage and omits filing requirements for insurers. In addition, it reduces the exemption for considering those claims filed that did not result in any payment from three in three years to one in three years.

Another substitute bill, sponsored by Louisiana State Rep. Shirley Bowler, R-Harahan, and South Carolina State Rep. Dan Tripp, R-Greeneville, with the Property-Casualty Insurers Association of America and the National Association of Mutual Insurance Companies, omitted the filing requirements and claims-history report for providers, which describe the basis for their procedures and reduce the number of claims submitted that do not result in payment that can be weighted against an applicant from three in three years to one in three years.