Looking ahead is what we do with the start of a new year; it provides a sort of jump start to our expectation of new opportunities, milestones, and challenges. Whether we are considering personal resolutions related to our own physical fitness or awaiting spring 2012 graduations from preschool all the way to college commencements, anticipating and planning for this fresh new beginning is ingrained in our nature. This jumpstart (or springboard) approach to this annual event also extends to the property and casualty (P&C) insurance industry, especially affecting those involved in managing the risk of non compliance with state and federal statutes and regulations.
Having just dealt with all of the process and procedural changes required to meet the many new regulatory requirements that took effect the first of this year, insurance compliance professionals know there will be many legislative and regulatory developments to be identified and monitored for possible implementation. That influx of proposals has already started. While consumer protection should continue to be on the top of many states' lists this year, the industry can definitely expect other considerations to be addressed. A few such pending considerations are explored here with particular focus on underwriting and claims.
Commercial Lines' Underwriting Issues
Florida is taking a look at commercial lines underwriting issues in HB 941 this session. This bill proposes that effective July 1, 2012 an insurer issuing a commercial lines policy is permitted to, at the expiration of the policy term, transfer the policy to another authorized insurer under the same direct or indirect ownership, management, or control as the transferring insurer. Commercial lines insurers using this process would renew the policy and it would not be treated as a cancellation or a nonrenewal of the policy.
No-Fault Insurance
The subject of much debate recently in some states, no-fault insurance has attracted the most attention in Florida. HB 1007, prefiled on Dec. 12, 2011, proposes the repeal of that state's no-fault law, while creating the Mandatory Emergency Payments Coverage Law.
Indiana's SB 7, recently introduced, seeks to require that P&C insurers provide a premium discount, which would reflect the cost savings expected to be realized in insuring specific property with a metal roof. Projected affected policies would be those that:
- Cover first-party loss to property located inIndiana and
- Insure against loss or damage to real property which consists of not more than four residential units, one of which is the principal place of residence of the named insured and has a metal roof.
Good Faith Efforts
Indiana has a noteworthy bill introduced this session. SB 120 proposes to add a new chapter to its insurance code, titled “Motor Vehicle Insurance Claim Settlement.” This would require insurers to immediately begin to make good faith efforts to contact the policyholder and any other individual necessary to resolve the claim upon receiving a claim for damage that:
- Resulted from a motor vehicle accident that is alleged to be the fault of an insured under a motor vehicle insurance policy issued by the insurer; and
- Was incurred by a third party.
The proposal further states that if an insurer is unable to contact the policyholder or another individual as outlined in this bill, then the insurer is not permitted to require the third party to attempt to contact the policyholder or other individual. The insurer would be also required to settle the claim with the third party, basing fault on the information obtained from the police report if these conditions are met:
- 30 days have elapsed after the claim filing.
- The insurer has been unsuccessful in required contact.
- A police report concerning the accident has been filed.
- The third party does not object to settlement of the claim based on the information contained in the police report.
We can also expect some continuing interest in certificates of insurance, credit scoring in rating and underwriting and additional disclosures in the claims process. With all of the prefiled and introduced bills seen so far in 2012, it will definitely be another busy year for P&C insurance professionals.
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