NAII Urges No Change In Iowa’s Unfair Trade Practices Regulation

The National Association of Independent Insurers (NAII) urged the Iowa Insurance Division to abandon several proposed changes in its unfair trade practices regulation, as it sees no need and no benefits from the proposals.

NAII Counsel Ann Weber pointed out that the tend in modernizing statutes should be limited to situations in real need of change. “No compelling need is apparent in Iowa to adopt the proposed changes,” she stated. “There has been no indication that the regulations and statutes presently on the books in Iowa have not been adequate to sufficiently deal with any complaints regarding claims-handling. Adoption of the proposed extensive changes would not add any benefit; indeed, it would only suffice in adding additional regulations with resulting questions of interpretation.”

Weber particularly objected to proposed changes that would “give direction across the board on how replacement costs and actual cash value should be handled.” She stated that “The adjustment of each claim is unique in circumstances, and the parties are committed to their obligations under their contract. In our free enterprise system, not every company has the same contract, and this section appears to mandate to the contrary.”

Some of the provisions concerning replacement of damaged items with objects of uniform color, size, quality etc. could result in the insurance industry assuming the costs of normal maintenance. Weber said this would significantly increase claims payments, and drive up premiums.

She also indicated that a provision pertaining to diminished value in auto insurance claims is not needed and should be deleted, but noted that the current draft “changed the wording so it applied only to third-party claims in line with previous NAII testimony,” but still saw no need to include it. “In third-party claims, Iowa statutes pertaining to civil actions prevail and the claimant, if the matter cannot be resolved, will have their day in court,” Weber stated.” Ambiguity in the language also might raise the contention that diminished value did pertain to first-party claims,” she added.

Topics Legislation Iowa