NU Online News Service, June 14, 11:54 a.m. EDT
Connecticut lawmakers have extended the state's flex-rating law for two years.
"Personal-lines insurance markets remain very competitive in Connecticut due in part to the flex-rating law," says Kristina Baldwin, assistant vice president of state government affairs for the Property Casualty Insurers Association of America, in a statement. "This system allows insurers to respond to competitive market conditions and determine appropriate rate-level changes."
The measure will allow insurers to continue to immediately use periodic rate changes on a file-and-use basis, without waiting for regulatory approvals, so long as the rate falls within a 6 percent "flex band"—an increase or decrease by no more than 6 percent
A provision in the bill, HB 6364, that would have prohibited an insurer from filing a rate increase of more than 6 percent after it discontinued accepting applications of personal-risk insurance was removed, says the National Association of Mutual Insurance Companies (NAMIC) in a statement. NAMIC and the Insurance Association of Connecticut opposed the provision.
"Legislators recognized that this provision would affect the market negatively," adds Paul Tetrault, Northeast region state affairs manager for NAMIC.
The flex-rating law in Connecticut was implemented in 2006 and extended in 2009 with a sunset date this year.
PCI says the state legislature also rejected HB 5283, which would have limited an insurer's ability to talk to policyholders about auto body and glass repair options.
According to Highline Data, the top writer of personal-lines insurance in Connecticut in 2010 was Allstate, with an 11.4 percent market share. Allstate was followed by Liberty Mutual Insurance Group (10.8 percent), Berkshire Hathaway Insurance Group (8.9 percent, Travelers Group (8.9 percent) and Progressive Group (5.8 percent).
Highline Data is a part of Summit Business Media, which also own National Underwriter.
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