Insurance Trade Groups Oppose Minnesota Auto Insurance Bill
Property/casualty insurance trade groups, the American Insurance Association (AIA) and the National Association of Mutual Insurance Companies (NAMIC), have placed testimony to the Minnesota Legislature in opposition to a proposed auto insurance regulation bill the groups consider being misguided. According to NAMIC, two of the bills most troubling provisions are one that contains a rollback provision that the association says would lead to insurer insolvencies and another that would limit rating factors. Read our blog to find out why these insurance trade groups oppose Minnesota auto insurance bill and use our website to get car insurance quotes online free.
The AIA said that while the recently introduced bill, SF 2770, follows several years of debate on auto insurance reform in the state, it does not include the solutions worked out during those conversations. Steve Schneider, Midwest region vice president for AIA, said SF 2770 would hurt the insurance industry’s financial ability to serve its customers, as it would require retroactive redistribution of funds paid by customers to ensure their personal financial protection in the event of an automobile accident.
“We consider this proposal very troubling because it represents a complete reworking of state law without considering the solvency of our industry. … Insurers are businesses. To pay claims, they must stay in business. To stay in business, they must satisfy customers and meet the stringent financial solvency requirements enforced by the Department of Commerce,” Schneider said in a statement released by the AIA.
In written testimony to Minnesota Senate Commerce Committee Chair James P. Metzen, Mark Johnston, NAMIC’s director of State Affairs – Midwest Region, said the association opposes the bill.
“Among its provisions, two stand out as being misguided,” he wrote.
- “The rate rollback provisions in the bill suffer from constitution infirmities as shown by the holdings of courts in other states. They also could result in insurer insolvencies to the long term detriment of Minnesota consumers.
- “The provisions in the bill that limit rating factors will result in cross-subsidization that harms rural Minnesotans and many others.”
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