NAIC Delays Action On Use Of Property Loss Data
Salt Lake City
The National Association of Insurance Commissioners will hold off developing regulations over insurer use of property claim loss-history databases to better coordinate NAIC efforts with state lawmakers exploring the same issue.
Critics complain that simple policyholder inquiries can result in adverse underwriting decisions, and that insureds hesitate to make claims for fear of damaging their records.
Oregon Administrator Joel Ario told the Market Regulation D Committee that consumer complaints on the issue have soared in recent years. As a result, his department is developing a homeowners bill of rights that "will be our marquee piece of legislation this year," he noted.
For the past year, the National Conference of Insurance Legislators has been developing a model law to regulate use of property loss history, and could finalize one at its summer meeting in July.
By the time of the next NAIC meeting in June, committee members said they hope to have a better sense of the issues that would be incorporated in any model regulation. They would then have the option of working with NCOIL on a joint basis, or going their own way if they were not happy with the state lawmakers' work product.
American Insurance Association Vice President Dave Snyder said no action should be taken until a cost-benefit analysis is undertaken. "I think it would be wise if you would take a closer look at these complaints and see if any new regulation would be the answer to them," he said.
Don Cleasby, assistant general counsel of the Property-Casualty Insurers Association of America, said that with so many states looking at the issue, some uniformity would be welcome, but he urged regulators to work with NCOIL first.
NAIC-funded consumer representative Birny Birnbaum, executive director for the Austin-based Center for Economic Justice, said it would be a mistake to let NCOIL take the lead, as it did with the development of a model credit scoring law. He derided NCOILs proposed model as one developed to placate an industry in which consumer interests were not taken into account.
Reproduced from National Underwriter Edition, March 17, 2005. Copyright 2005 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.
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