The National Association of Independent Insurers has issued a statement commending the New York State Insurance Department’s action in approving a statewide average rate increase of 19.7 percent for high-risk drivers insured through the state’s Automobile Insurance Plan, calling it “an important step toward the stabilization of automobile insurance rates.”
The increase takes effect for new business August 15 and for renewals October 1, 2003. “This rate increase for drivers in the assigned risk pool is necessary to help address skyrocketing insurance costs,” stated NAII assistant general counsel Gerald Zimmerman. “Unless meaningful reforms are adopted that reduce insurance costs, consumers will continue to see rates increase. In the latest report on state average auto premiums by the National Association of Insurance Commissioners (NAIC), New York displaced New Jersey as the second most expensive insurance marketplace in the country. This trend is symptomatic of a system that is in need of cost controls.”
The NAII said that it will continue to work for the adoption of “a series of reforms that will squarely address the major cost drivers in the system” in cooperation with other insurer associations. “Insurance fraud continues to be the biggest cost driver in New York,” Zimmerman continued. “While coordinated action between state officials, law enforcement and insurers is helpful in fighting fraud, legislative action is necessary to impose stricter penalties for this crime. Other legislative changes that would help reduce costs include giving insurers more time to investigate and deny fraudulent claims and decertifying health care providers that engage in fraud. In addition to reducing insurance fraud, insurers are advocating reforms that will reduce costs such as mandatory arbitration for billing disputes, medical protocols and the implementation of a more competition-based regulatory system.”
“What New Yorkers don’t need is more bureaucracy, like a so-called consumer advocate, whose sole purpose is to politicize the pricing of insurance,” he concluded.
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