NAMIC Concerned about Oregon’s Single Construction Liability Insurer

The National Association of Mutual Insurance Companies (NAMIC) has announced it is concerned about Oregon’s Construction Claims Task Force (CCTF) decision to designate a “single private insurer” to provide liability insurance coverage for the construction industry.

“A competitive commercial liability insurance marketplace composed of a significant number of insurance providers affords the construction industry a wide variety of insurance products and rates to consider when addressing its business needs,” said NAMIC West Region State Affairs Manager Christian Rataj. “In contrast, insurance markets that are monopolistic tend to have fewer insurance products for the consumer to select from, which could adversely affect the affordability and availability of commercial liability coverage for small business contractors.”

According to NAMIC, HB 2078 authorizes the Director of the Department of Business and Consumer Services to retain a qualified expert to study options regarding actuarially sound insurance reforms, alternatives and pricing, including loss control discounts or the designation of a single private insurer to provide required construction contractor insurance.

The expert may review other options consistent with the overall broad goals of the legislation including self-insurance, assigned risk pools, contractor pools and associations, a claim fund for consumers to access for correcting construction defects, a loan fund for contractors to borrow monies necessary to repair construction defects, and the use of voluntary or mandatory warranties.

“NAMIC will file written comments with the Task Force expressing concern about the monopolistic, anti-competition impact of establishing a single private insurer to provide insurance coverage to the construction industry, and the adverse impact this proposal could have for the insurance consumer,” Rataj said.

According to the Insurance Study Summary Request For Proposal (RFP), the evaluation shall include an analysis of the market impacts of the various insurance options including:
* the impact on other contractor coverages such as property and excess liability;
* the extent that similar options have been implemented in other jurisdictions and the efficacy of the options in those other jurisdictions;
* the interaction of each option with the existing state insurance structure; and
* how these options relate to other state and federal laws.

The next meeting of the task force is scheduled for Dec. 2, 2005.

View the Construction Study Task Force Request for Proposal (RFP) at: