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The adoption of a resolution on aftermarket parts and the renewal of a model law on credit scoring strike a practical balance between consumer protection, competition and sound underwriting principles, according to the Property Casualty Insurers Association of America (PCI). The developments took place last week during the annual meeting of the National Conference of Insurance Legislators (NCOIL) in San Diego.
“We are extremely pleased at the significant results of this week’s NCOIL meeting,” said Robert Zeman, senior vice president, insurance regulatory affairs for PCI. “There were a lot of challenging and debatable issues on the agenda, and we were able to roll up our sleeves and develop workable solutions in a fair and balanced way.”
While the agenda for the meeting was significantly revised to provide for the discussion of the industry’s response to and the ramifications of the recent hurricanes on the insurance industry, meeting participants were still able to address key issues. A summary of the action on key issues is outlined below.
Aftermarket Crash Parts
A major action that took place last week was the adoption of a resolution on aftermarket crash parts. The resolution is designed to create a market incentive for the use of aftermarket parts in collision repair that are certified by an independent third party by creating a presumption that, if certified, the parts are of like kind and quality compared to car company parts.
“The resolution adopted by the Property and Casualty Insurance Committee maintains competition and will help keep repair costs down for consumers,” said Zeman. “It strikes the perfect balance between competition and consumer protection. We are pleased that PCI was instrumental in helping to defeat proposed amendments that would have required insurers to guarantee individual parts, thereby potentially diminishing competition in the marketplace.”
Credit Scoring Model
In a development heralded as a success by insurers and consumers alike, the Credit Scoring Model Act, up for reauthorization every two years per NCOIL’s bylaws, was renewed by the Property and Casualty Insurance Committee.
“We are extremely pleased with the renewal of the Credit Scoring Model Act,” said Zeman. “The model protects consumers while preserving the benefits and use of sound underwriting principles. It also gives clear direction to state legislatures who may consider this issue in 2006. Twenty-five states have already adopted the model, considered NCOIL’s most successful endeavor, which has resulted in a positive, depoliticizing of the issue.”
“NCOIL plays a key role in shaping how the insurance industry is regulated,” added Zeman. “We are pleased that such significant progress was made on the critical issues affecting our industry and look forward to our continued collaboration with NCOIL leaders and related groups.”