Insurers Trade Group PCI Cites 2011 Wins, 2012 Goals

By Denise Johnson | February 2, 2012

The Property Casualty Insurers Association of America (PCI) has developed into a lean, mean fighting machine, according to the organization’s president, David Sampson.

It’s been eight years since the merger between two trade insurance groups -the Alliance of American Insurers and the National Association of Independent Insurers – spurred the formation of one larger group, now known as PCI.

PCI has reduced its head count by 30 percent since the merger in 2004. This reduction in staff led the move into a smaller office in Chicago. The reduction in staff and space allowed the organization to free up $400,000 a year to use towards advocating for the competitive private insurance market.

PCI hires consultants on a case by case basis as industry issues arise, which helps it avoid being weighed down with dedicated personnel, Sampson said. This approach also allows it to “confront unexpected challenges on specific issues as they arise.”

During an industry update at the annual PCI executive conference recently in Scottsdale, Ariz., Sampson talked about the issues facing the industry in 2012 and how last year panned out.

In 2011, Sampson said the organization made significant progress at the state and federal levels. He outlined the top four victories:

  • Underwriting freedoms were protected as not a single state enacted legislation restricting underwriting. “Adverse legislation was stalled or defeated in 10 states,” Sampson said.
  • The organization took part in negotiations to protect the rights of U.S. ceded insurers.
  • The industry succeeded in extending the National Flood Protection (NFIP) to May 31, 2012 after a series of shorter extensions occurred.
  • The organization continued work to insure that property/casualty insurers are not affected by “bank-centric rules” during the Dodd-Frank implementation.

During the executive level session, Sampson described the top issues PCI plans to focus on in 2012.

At the state level, the insurance trade organization plans to oppose bad faith legislation and deal with California auto body shop regulations that could inhibit insurers from directing policyholders to specific auto body shops.

PCI anticipates the major auto body repair and glass issues for 2012 will involve aftermarket parts, labor rates, steering and estimating systems. PCI will oppose legislative efforts that would restrict insurers’ ability to make recommendations or suggestions to consumers on individual repair facilities or that would impede insurers’ ability to manage the claim repair process and control costs on behalf of consumers.

At the federal level, the organization will work with the government to address the current instability of the NFIP.

“PCI will aggressively advocate for greater certainty and stability for the NFIP, including a long-term reauthorization and balanced reforms,” said Ben McKay, PCI’s senior vice president of federal government relations, in an earlier press release on the subject.

PCI will continue to remain engaged in the Dodd-Frank implementation process.

“Our goal is to preserve the many legislative victories achieved in the Dodd-Frank Act as it appropriately distinguishes insurance as very different from other sectors of the financial services industry and recognizes the strong consumer protections provided by the state regulatory system,” McKay said.

PCI will also continue to advance legislation to streamline the Medicare Secondary Payer section 111 reporting requirements.

At the international level, PCI plans to help shape thinking of the National Association of Insurance Commissioners (NAIC) with respect to international regulatory initiatives.

“International issues are increasingly setting the agenda for the National Association of Insurance Commissioners and could increase regulatory burdens for all companies, regardless of size or location,” McKay said.

Sampson expects this year to be pivotal to insurance industry issues, given that it is a presidential election year.

PCI is composed of more than 1,000 member companies. PCI members write over $180 billion in annual premium, 38.3 percent of the nation’s property casualty insurance. Member companies write 44.3 percent of the U.S. automobile insurance market, 31.6 percent of the homeowners market, 36.3 percent of the commercial property and liability market, and 42.6 percent of the private workers compensation market.

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