Nebraska Will Get File-And-Use Law

Under the bill's file-and-use provision, rates would go into effect 30 days after they were submitted, during which time they would be subject to review by the insurance commissioner.

Nebraska's unicameral Senate unanimously approved the measure, titled LB 119, by a vote of 40-0, March 3. It will become effective in early September.

Nebraska in 2003 enacted a commercial lines modernization measure. The following year a personal lines modernization bill was introduced but failed to gain passage before the legislature adjourned.

Joe Thesing, central regionstate affairs manager for Indianapolis-based National Association of Mutual Insurance Companies (NAMIC), said, "Passage of LB 119 will be of great benefit to Nebraska's insurance markets and will send a strong message to Congress that states can improve and modernize the state system of insurance
regulation. States have successfully regulated the business of insurance for more than 150 years."

He added, "Although not perfect, the state system is adaptable, innovative and can be tailored to meet the needs of local markets?certainly more so than an unproven new system of federal regulation. Nonetheless, improvements along the lines of LB 119 are needed."

"Changing Nebraska's rate and rate filing standards will ensure that insurance companies are able to deliver insurance products to market quickly and efficiently, helping stimulate competition and directly benefiting consumers through greater availability and competitive prices for insurance products," said Mr. Thesing.

He said that Nebraska Insurance Commissioner Tim Wagner, who pushed for the omnibus measure, had been approving rate filings in a timely manner and that he and his staff were an example of why states should remain the sole regulators of the insurance industry.

But Mr. Thesing noted that "not every regulator is as fair as Commissioner Wagner. Enactment of LB 119 will ensure prompt availability of affordable insurance products regardless of who serves as insurance commissioner."

According to NAMIC, over the past two years, nine states have adopted some form of regulatory modernization, including New Hampshire, New Jersey, Louisiana, Massachusetts, Oklahoma, Rhode Island, South Carolina and South Dakota.Currently, for personal lines, 18 states observe prior approval, 23 states observe file-and-use, and nine states observe use-and-file systems of rate regulation.