Proof of Concept

When we read in these pages of legislative and regulatory issues – in particular, the recent successes for agents with Reg 60, Reg 79 and now the C of I clarifications – it reminds me of the value agents get from their associations: NYSAIFA, IIABNY, PIANY and the others.

That was underlined just the other day
with a press release from PIANY, stating
that its Buffalo delegates met with 18 Western
New York lawmakers in preparation for the new legislative year as part of PIANY’s District office visit program. PIANY President Anthony A. Kubera, CIC, of Russell Bond & Co.; past President Henry Kaye, CIC; Director Fred Holender, CLU, CPCU, ChFC, MSFS, of Lawley Service; and Director Eric T. Clauss of E.T. Clauss and Co., met with the local lawmakers to share the association’s top legislative issues with local lawmakers in each of their home offices. On their agenda: addressing further the fraudulent use of certificates of insurance by requiring them to be filed and approved prior to use; reform to New York’s unique “Scaffold Law,” to establish a comparative negligence standard for claims under Labor Law 240 and 241; standardizing the events that would trigger coastal homeowners insurance hurricane deductibles; and removal of the New York State Insurance Fund’s exempt status from licensing and other insurance requirements. Given the strength of the Trial Bar, some of these are unlikely, BUT….times are changing a little in Albany with the Silver stranglehold eased and with a sense of accountability rising. I am sure that after years of hearing that only “three men in a room” mattered, local reps are interested in playing a meaningful role in the processes. These grass roots visits – common to all of the associations – may have more meaning this year. …. In case you missed it, the Consumer Federation of America (CFA) is not fond of insurers, agents or any professional associated with the business, it seems. Property Casualty Insurers Association of America (PCI) responded to a press release issued by the PCI. Guess what it said. David Snyder, PCI vice president writes: “We agree with consumer advocates that auto insurance consumers should shop around to find the right coverage to meet their needs. The auto insurance market is a highly competitive marketplace with many choices and options that can benefit consumers. However, we disagree with the regulatory recommendations made by CFA as they would harm, not help consumers. The CFA’s approach could cause unfair subsidies and break the critical link between risk and pricing that has prevented the kind of instability that you saw when banks offered loans without relationship to risk, thereby helping cause the financial crisis that harmed consumers and our economy. All rating factors used by insurers are subject to intense regulation and competition. Insurers are not allowed by regulators in all 50 states to use rating factors that do not reflect the risk of loss. Consumers that finance their vehicles are required by their lenders financing the car to carry comprehensive and collision coverage and this requirement will increase overall premiums.” PCI is composed of more than 1,000 member companies who write more than $210 billion in annual premium, 39 percent of the nation’s property casualty insurance. Member companies write 47 per- cent of the U.S. automobile insurance market, 33 percent of the homeowners market, 36 percent of the commercial property and liability market, and 39 percent of the private workers compensation market. … So what did the CFA say? “Large Auto Insurers Charge High Prices, to a Typical Lower-Income Safe Driver with Car Financing, for Minimal Coverage….” In its latest survey of auto insurer website quotes, the Consumer Federation of America (CFA) found that annual auto insurance premiums are especially high for the estimated 8 million low- and moderate-income drivers who finance their car purchases. These drivers must purchase the comprehensive and collision coverage required by auto lenders in addition to the liability coverage required by states. In the 15 cities CFA surveyed, annual premium quotes were almost always more than $900 and were usually more than $1,500. ….“High auto insurance premiums represent a huge barrier to car ownership, and economic opportunity, for millions of lower-income Americans,” said Stephen Brobeck, CFA’s Executive Director. “Researchers agree that they and other Americans, even those in large cities, gain access to better jobs and other opportunities through access to a car,” he added. “State governments, which require drivers to purchase auto insurance, have a special responsibility to ensure that this insurance is affordable in an auto-dependent society,” said J. Robert Hunter, CFA’s Director of Insurance and former Texas Insurance Commissioner. “These governments should create low-income programs that pay for themselves, such as California’s, and also end well-documented price discrimination against lower-income drivers,” he added. … Does anyone have a calculator handy?