The Property Casualty Insurers Association of America (PCI) expressed its opposition to efforts in the Wyoming legislature to add burdensome and costly reporting requirements to insurers in an effort to keep uninsured motorists off the road.
“While the motive behind the bill (SF0020) is commendable, the fact is, the requirements of this bill will burden insurers and their policyholders with more costs, but will do little, if anything, to keep uninsured motorists from getting behind the wheel,” said Sam Sorich, PCI vice president and Western region manager.
SF0020 requires insurers to report cancellations, non-renewals and issuances of auto liability policies to the state Department of Transportation within 10 days. It also stiffens the existing penalties for driving without insurance. The bill passed the Senate Corporations Committee and is pending in the Senate Appropriations Committee.
“There are several reasons why people drive uninsured,” Sorich explained. “Along with career scofflaws, there are people who cannot afford insurance; those who mistakenly think they have insurance; and those who are unable to obtain insurance due to suspended licenses and continue to drive anyway.
“Time and time again, when compulsory laws have not succeeded in eliminating uninsured drivers from the road, legislators have tried to make it work by adding layers of enforcement that do little but drain funds from the state, and add layers of costs to insured drivers and consumers.
“Eventually legislators try to make the existing law work by enacting new laws – including data reporting requirements for insurers. The basic idea behind these data reporting programs is that insurers report their policy records to the state, and the state then matches those records from month to month to identify those drivers who have dropped their insurance; or the state matches those records with vehicle registration records in an effort to identify uninsured vehicles by process of elimination. In other words, the burden of proving that one has insurance falls on insurers and the various Departments of Motor Vehicles.
“Lawfully insured drivers, however, suffer the consequences, as they are too often incorrectly identified as ‘uninsured’ when records don’t perfectly match. Worst of all, insured drivers end up ‘paying’ in three ways. They pay for their own insurance protection ¾ which does include protection in the event of an accident caused by an uninsured driver ¾ and they also pay increased insurance costs and often higher registration and licensing fees, as the exorbitant costs of these mandatory insurance enforcement programs are ultimately passed down to them.”
John Lobert, PCI’s senior vice president of state legislative affairs cautioned that additional reporting requirements may force companies to closely scrutinize their business. “Automobile liability insurance reporting mandates may be a deterrent to companies entering or remaining in a market, as some insurers may have a difficult time justifying the cost of complying with reporting requirements, and may thus avoid writing in some markets. Fewer companies equal less competition and, again, the consumer may suffer.”
A total of 55 PCI member companies write nearly 36 percent of all the personal auto insurance in the state.
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