The Property Casualty Insurers Association of American praised Gov. Frank Murkowski for signing into law legislation which will modernize and improve Alaska’s system for establishing rates for homeowners, auto and commercial insurance.
Kenton Brine, PCI’s Northwestern Regional Manager, said the new law will help consumers by creating a more competitive environment that could bring more insurance carriers — and a wider range of insurance products and services — to Alaska.
The new law, HB 216, will establish a 10 percent band, allowing insurers to charge rates within that range without obtaining approval first from the Dept. of Insurance. Changes greater than 10 percent will still require the department’s prior approval before implementation.
“Before this law, Alaska’s regulatory system discouraged insurers from providing innovative products and rate changes because such changes could face lengthy review processes. Some insurance companies viewed that ‘prior approval’ rating system as an additional hurdle in an already-challenging market,” Brine said.
Brine noted that under HB 216, Alaska’s Insurance Department can still review rate increases or decreases outside the 10 percent band. “But ultimately, we believe what serves consumers best is increased competition among insurers,” Brine said.
“Flex rating has improved the insurance marketplace in several states where it has been enacted in the last five years by encouraging carriers to compete, attracting more insurers to those states and encouraging companies already writing to offer new products at competitive rates to the state’s insurance consumers. The same could hold true for Alaska.”
Brine also praised the efforts of Insurance Department Director Linda Hall in getting the legislation passed. “Director Hall has a deep understanding of the role competition plays in consumer protection, and this legislation would not have been possible without her leadership and tireless effort,” said Brine.
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