Alliance Objects to California Mileage Regulations

July 11, 2006

The Alliance of Insurance Agents and Brokers reaffirmed its strong objection to continued attempts by the California Department of Insurance (CDI) to impose regulations on the insurance industry that are “totally unnecessary.”

“Even after soliciting comments from the industry and consumer groups and offering a revision, the CDI’s proposed regulations still fail to meet the litmus test of necessity,” said Ken Nigohosian, executive director of the Alliance. “Unlike current regulations, which do not handcuff a carrier’s ability to request this extremely critical information, the proposed regulations severely restrict that process.”

In April 2006, the CDI released proposed mileage regulations that mandate how carriers may obtain estimated and/or actual mileage driven information from their customers. The accuracy of miles driven is an extremely critical piece in supporting the integrity of a carrier’s rate structure. Driving record, mileage, and years of experience are the primary rating factors in California.

“The industry can ill afford to play games on how to collect this information, and current regulations offer the carriers the latitude necessary to pursue this vital information,” said Nigohosian. “If the proposed regulations are implemented, they will restrict carrier’s ability to collect this information and enhance and encourage fraudulent behavior from the insured. The proposed mileage regulations are unnecessary. The Alliance will continue to aggressively advocate against the CDI’s proposed mileage regulations.”

Source: The Alliance of Insurance Agents and Brokers

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