Insurers’ Efforts to Protect Consumers Partially Successful in Utah Legislative Session

Insurers’ major efforts in the recently concluded Utah legislative session were devoted to benefiting consumers by preserving the use of credit-based insurance scores and to soften harmful aspects of other bills. Those efforts were partially successful according to the National Association of Independent Insurers.

“A major focus of the session was House Bill 110, on insurance scores,” NAII Counsel Ann Weber said. Initially, the bill would have allowed insurance scores to be used only to provide discounts.

“In its initial form, HB 110 would have destroyed the value of the scores because insurers could not afford to provide discounts to most of their customers, who have good scores, if they could not charge offsetting higher rates to people with higher scores, who are greater risks,” Weber said.

HB 110 was amended in the closing hours of the 2002 session to allow the scores to be used in initial underwriting while forbidding their use in renewals. Weber said the amendment was an improvement but stressed that any impediments to insurers’ use of insurance scores harmed most consumers because they would be deprived of the lower premiums that they could get otherwise.

In other legislation, NAII succeeded in getting two bills withdrawn—HB 239, on salvage vehicles, and Senate Bill 179, specifying timely payment of claims.

One bill that passed over NAII’s opposition was HB 342, allowing rental car companies to receive payment for diminished value and administrative fees for damaged vehicles. But NAII was successful in deleting from the bill a provision that would have allowed the rental agencies to receive payment for the loss of use of the vehicle.

NAII was successful in amending SB 120, on intrafamily arbitration, to make it less onerous before it was passed. NAII stressed that intrafamily claims should be treated no differently than other claims, and, since few intrafamily disputes end up in court, there was little need for the bill anyway.

NAII supported amendments to SB 119 that retained the present provision for members of the state Workers’ Compensation Fund to be appointed by the governor. Weber said the fund should not be free to compete unfairly with private insurance companies by appearing to function as an independent company while continuing to be exempt from the state premium tax.

NAII was unsuccessful in deleting from SB 171, a Uniform Arbitration Act bill, a provision allowing for the award of punitive damages.

“While we were not happy with everything that was passed during this session,” Weber said, “we do feel we averted disastrous legislation from passing and improved bills that could have been much more harmful to the industry and consumers.”

Topics Carriers