NAII Says R.I. Legislation Would Worsen Auto Market

The Rhode Island House Corporations Committee recently heard several auto insurance-related bills that insurers oppose because they reportedly do little or nothing to improve the state’s insurance market.

“If passed, these bills would actually worsen Rhode Island’s auto insurance market,” Gerald Zimmerman, senior counsel for the National Association of Independent Insurers (NAII), said. ” Rhode Island drivers are already paying too much for coverage. These restrictive bills would increase administrative and other expenses for insurers and drive up premiums even more. We are urging lawmakers to weigh the impact of these bills and reject them.”

The bills at issue are:

· H.B. 5120, which amends the state’s Unfair Competition and Practices Act to authorize auto body repair shops to file a complaint with the Department of Business Regulation regarding an insurer’s “interference” with the insured’s or claimant’s free choice of repair facility;

· H.B. 5123, which requires insurers to respond to a request to settle a claim or action involving an uninsured or underinsured motorist within 30 days of the request, and specifies that consent to settle will be deemed granted if an insurer does not respond within 30 days;

· H.B. 5124, which requires auto liability insurers to make all medical payments directly to the insured, or the insured’s legal representative, unless the insured has assigned the right of payment directly to a health care provider;

· H.B. 5155, which enacts the Comprehensive Motor Vehicle Insurance Reparations Act, allowing applicants to choose between traditional liability or personal protection policy auto coverage, and requiring a 20 percent reduction in insurance premiums; and

· H.B. 6066, which would restrict the use of generic crash parts in auto repair.

“According to the most recent NAIC statistics, Rhode Island auto premiums averaged $972.01 in 2000, the fifth highest in the nation,” Zimmerman said. “These irresponsible bills will do nothing but throw gasoline on a burning fire.”