NAII Testifies in Favor of Nevada File and Use Bill

February 16, 2001

The National Association of Independent Insurers testified Feb. 14 in favor of Senate Bill 4 before the Nevada Senate Committee on Commerce and Labor.

Under SB 4, an auto or homeowners insurer must file its rates with the insurance commissioner, but the company may use its rate changes immediately upon filing them. Current Nevada law has special rules that require the commissioner to review and approve rates before they are put into effect.

According to Sam Sorich, NAII vice president and western regional manager, the bill protects consumers by preserving the current rating standards. In addition, it allows the commissioner to order the company to discontinue use of its rates and requires the commissioner to impose prior approval on the insurer’s new rates. SB 4 also requires the commissioner to monitor the auto and homeowners markets to ensure adequate competition.

If there is a lack of competition in a market, prior approval is reinstated. “Prior approval laws make sense when a market is not competitive,” Sorich said. “This is not so in Nevada.” In the state of Nevada there are more than 150 companies writing auto insurance and close to 100 companies writing homeowners insurance, giving consumers a wide array of choices when it comes to shopping for coverage.

The NAII feels that the legislation would be beneficial to both consumers and insurers. The association also feels that it would create a more efficient process without removing vital consumer protections.

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