Insurers Slow to Meet State Auto Liability Reporting Requirements

August 29, 2001

It doesn’t matter how much advance notice they get from the state motor vehicle departments — many insurance companies hold off until the last minute before considering how they will comply with automobile liability reporting requirements.

About 20 states now have laws requiring insurers to submit evidence of auto liability insurance electronically, and new states are being added all the time. IVANS Inc., whose Auto Liability Insurance Reporting (ALIR) software is used by approximately 100 insurers, has found that many of the customers who order ALIR do so in the last 60 days before a new law becomes mandatory.

According to Anna England, vice president, e-business solutions at IVANS, when Arizona went live last August, almost 40 percent of IVAN’s new ALIR orders didn’t come in until after June 1. She added that customers often tell the company that they received the notice a year and a half ago, but didn’t know what to do with it.

The biggest problem seems to be states where carriers have relatively little volume. IVANS President Bob Payne noted that while everyone was aware of the deadline when New York mandated electronic reporting, the situation may be different in smaller states, where a medium-sized carrier may be writing only a few hundred policies. In such situations, a deadline can be easy to miss.

If a state requires data to be submitted in a unique, proprietary format, it can be particularly difficult to implement reporting quickly, England added. Even if the state is accepting data in the ASC X12 format used by many states, there can be problems. England emphasized that IVANS supports both X12 and proprietary states, and many IVAN’s customers take advantage of the company’s Total State Reporting service.

Some of the states where carriers should be watching their mail carefully in the next few months:

Arizona – Deadline for Arizona was August 1, 2001. However, many companies are still implementing and testing their X12 projects.

Georgia – Georgia’s electronic reporting program is scheduled for testing in September. This is a proprietary format state, so X12 is not a requirement. Carriers have been advised that they will need to continue sending in documentation until January 2002.

New Mexico – Plans are in place to introduce a new program late in 2001. There is no information at this time as to whether it will be mandatory or voluntary, or the data format (proprietary or X12).

South Carolina – South Carolina is expected to move to X12 some time in 2002. Little information about the program is available at this time.

IVANS Inc., headquartered in Greenwich, Conn., was formed in 1983 by 21 insurance companies to provide data networking and e-commerce solutions and services to all participants in the insurance industry. It serves over 475 insurance and healthcare organizations and more than 30,000 independent agents and brokers.

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