NAMIC's top agenda remains the adoption of modernization laws that will create rate-approval standards less restrictive than prior approval. 

Last year in North Carolina, an auto insurance study committee accepted a report calling for improvements in the rate-making process. The legislature will consider the committee's recommendations this year. The Tennessee legislature enacted commercial lines rate modernization in the prior session, and NAMIC and other industry advocates continue to be engaged in strategic talks about flex rating with Pennsylvania regulators. NAMIC also is serving on a flex-rating study committee in Nevada. Most importantly, there were no successful attempts last year to return any state's property-casualty insurance rate-setting procedure to prior approval. 

Underwriting freedom is the essence of our business, but many  naysayers don't see it that way. It wasn't that long ago when 35 states introduced bills to ban credit-based insurance scoring (CBIS). We were welcomed to a new legislative mindset last year as only a handful of states debated such bills to ban or severely limit the practice. 

Although Kentucky, Rhode Island, Tennessee and West Virginia introduced CBIS-ban bills, none of them moved. But by far the most astonishing change came in Michigan, where there was a monumental shift in the legislative environment—the General Assembly adopted and the governor signed insurance scoring legislation based on the NCOIL model. The day that piece of legislation was signed ended a decade-long battle on this topic in the state. 

Once again, trial attorneys will be working the halls of state governments, pursuing anti-civil-justice-reform initiatives. But as we saw last year, not much transpired to benefit this segment of the law industry—to the chagrin of lawyers.

We made positive headway on a relatively new issue known as third-party litigation funding. Also known as litigation financing or lawsuit lending, the term refers to the practice of providing money to a party to pursue a potential or filed lawsuit in return for a share of any damages award or settlement. NAMIC played a key role in shaping the debate by publishing the issue analysis paper "Third-Party Litigation Funding: Tipping the Scales of Justice for All," which has softened the stance of litigation-funding proponents on legislation meant to curb the practice. Although no prohibition bills passed, eight states defeated litigation-finance-industry-sponsored legislation that would legitimize the practice. Expect more debate in 2013. 

Related: Read the another article by Neil Alldredge "The Value of Unsolicited Advice".

A few small but important tort reform proposals were adopted last year: Michigan passed legislation allowing expert testimony to be delivered via video link, while Virginia adopted legislation that more narrowly defines "defective drywall." Also note that few serious efforts to move anti-civil-justice-reform legislation exist. 

The U.S. experienced more than its share of major storms in 2012, prompting some states to focus on natural disaster and coastal challenges. In Connecticut and Rhode Island, insurance departments or the legislatures answered the punch of Hurricane/Tropical Storm Irene that hit in the summer of 2011 by revising guidelines for acceptable application of hurricane deductibles (Connecticut) and proposing a weather-related claims bill that among other things would limit application of a hurricane deductible to once in a calendar year (Rhode Island). 

So far the destruction that befell the East Coast from Superstorm Sandy has reached more than $25 billion in insured losses. The downgrading of Sandy from a hurricane to a superstorm resulted in states prohibiting property insurers from applying the hurricane deductible. This deductible is an important risk-management tool and disallows hurricane deductibles to negatively impact policyholders by causing insurers to re-evaluate their coastal exposures.

Related: Read the article "Clean Out the Regulatory Attic" by Neil Alldredge.

Yet the property-casualty insurance industry did experience some wins in this arena. The industry's strongest showings were in Florida, which passed legislation to lower assessments prescribed by Citizens, the insurer of last resort, and in Alabama, which passed legislation allowing policyholders to create tax-free catastrophe savings accounts and give premium tax credits to companies for coastal writing. 

About the only "trend" we saw in state legislatures was legislation focusing on those fraudulent contractors (we call them "storm scammers") who sweep in after a devastating storm to take advantage of homeowners when they are at their most vulnerable. Thanks in part to the industry coming together, 14 states passed legislation to protect consumers from fly-by-night contractors. This trend will continue in 2013. 

All in all, it was a pretty good year for our industry in statehouses across the country. We hope we can say the same thing about 2013, but the majority of those sitting in Senate and House chambers will have two or fewer years of experience. And that means one thing—educating state legislators on the business of our industry.