Alabama Republican Gov. Bob Riley has vetoed a bill that would have increased the minimum amount of auto insurance coverage that motorists must purchase.
William Stander, assistant vice president and regional manager for the Property Casualty Insurers Association of America (PCI), said the group had urged the governor not to sign the bill because such a policy change would require insurers to reprogram computers, file rates and forms, and notify policyholders.
Liz Reynolds, National Association of Mutual Insurance Companies southeastern state affairs manager, was also among the trade groups objecting to the measure
In a letter to Gov. Riley last week, Ms. Reynolds objected to the fact that the measure would take effect too quickly.
"Signing SB 202 into law without an appropriate time period for implementation will create confusion and chaos for our members and the policyholders they serve," she wrote
Mr. Stander added that "If the state is going to require higher insurance limits, there needs to be a delayed effective date in order to provide sufficient time for insurers to process the changes and avoid some of the confusion for policyholders that is likely to occur."
Senate Bill 202 would have increased the minimum required financial responsibility limits for vehicle owners to $25,000 bodily injury liability for any one person, $50,000 bodily injury liability for two or more persons, and $25,000 for property damage. The current limits in Alabama are $20,000, $40,000 and $10,000, respectively.
The Legislature passed the bill in the final days of the session and did not have time to consider a delayed implementation date. "As a result, this legislation passed with an immediate effective date which caused significant concern for insurers," Mr. Stander said.
He said the governor did not issue a written veto but withheld his signature on the last meeting day of the Legislature–the procedure known as a pocket veto.
According to Mr. Stander, the governor is expected to support such a bill once it has the proper implementation period.
He said that PCI not only opposes raising the limits but all compulsory auto insurance.
"It only adds more gold to the pot at the end of the trial bar's rainbow," he said.
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