A bulletin issued by the The Independent Insurance Agents Association of New York indicated that its top legislative priority for 2002 would be “healing New York’s rapidly deteriorating automobile insurance market, which remains crippled by governmental inaction during 2001.”
Allstate, New York’s largest auto insurer, underscored the IIANY’s concern with the announcement of a statewide increase in the company’s auto insurance rates of 10.5 percent, effective immediately for new customers, and beginning February 17 for renewal business.
The IIANY stated that it, “believes lawmakers in the state Senate and Assembly must reach an agreement as soon as they reconvene this month to avert a full-scale market crisis that is forcing more New Yorkers to settle for significantly less coverage or pay skyrocketing auto insurance premiums.”
Allstate’s Maureen Sullivan, field corporate relations manager for the New York State Region echoed the IIANY’s position, stating that, “No-fault insurance fraud is driving car insurance rates in New York, and is impacting the availability of affordable auto insurance products in the state.” She added that, “Increasing rates and limiting availability of insurance products is not the solution to the no-fault fraud problem. New York auto consumers will continue to pay for fraud, until we can curb its impact on the state’s no-fault system.”
Of immediate concern to the IIANY is the expiration of the “2 percent” and “7 percent” provisions last August, which had allowed the State’s auto insurers to drop up to 2 percent of their customers within a specified geographic territory for justifiable reasons and to raise or lower their rates up to 7 percent without prior approval of the state Insurance Department.
“Since the so-called “2% Rule” and flex rating provisions were allowed to expire, insurers are increasingly placing severe restrictions on accepting new policyholders,” stated the IIANY. “As a result, the number of submissions to the assigned risk pool administered by the New York Automobile Insurance Plan, otherwise known as the ‘insurer of last resort,’ has grown more than 200 percent from the previous year.”
Both the IIANY and Allstate reiterated their willingness to work with New York legislators and the New York State Insurance Department to try and find solutions to the problem. Sullivan pointed out that, “There are solutions to the fraud problem that will harm no one but the perpetrators of fraud.” and urged the Legislature “to act on the pending reforms that would stiffen criminal penalties for fraud; shorten deadlines for submitting bills; establish needed guidelines for treatment, and decertify medical professionals convicted of insurance fraud.”|”iiany, says, auto, market, top, priority,, allstate, raises, rates
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