The Latin American Agents Association said it will wait and see how insurers react to newly imposed automobile rating regulations in California. After the Superior Court denial, and Appeals Court rejection of the insurer association coalition’s request for an injunction blocking implementation of new rate regulations, the Latin American Agents Association (LAAA) released the following statement:
“The LAAA is anxiously waiting to see whether the new limits on territorial weighting will result in suburban and rural drivers ‘subsidizing’ premiums of urban and inner city drivers, as some groups have claimed, or if drivers across the state will receive premium relief consumer groups and the California Department of Insurance believe has been owed to drivers since the passage of Proposition 103 nearly two decades ago.
“As our membership is comprised largely of producers doing business in larger metropolitan areas, as well as in communities with a high percentage of Latino residents, we have long held that the less weight given to Zip Codes in determining premiums, the better it will be for our customers. However, we do not believe that premium reductions should be held to a ‘zero-sum’ standard. The across the board rate reductions by USAA and the Automobile Club of Southern California, as well as the recent rate request by State Farm which would lower premiums for most of its policyholders by 8 percent, seem to bode well for all California drivers.
“Because the areas in which LAAA members do business historically have high uninsured motorist rates, our association is especially pleased to see a decrease in premiums. In some cases, drivers automatically assume they will pay high insurance rates because of where they live, and do not even consider getting coverage. With the publicity generated over the new rate regulations de-emphasizing Zip Codes, the LAAA is hopeful more uninsured drivers will rethink their decision to ignore California’s compulsory insurance laws and do the right thing, for themselves, their families and communities.
“Whichever side of the debate you sided with, the fact is that the new regulations are now the law of the land, barring any decision to appeal to the California Supreme Court. Before any more darts are thrown — or backs are patted — we believe the industry, consumer groups and the CDI should wait and see how the insurance market is impacted, positively or negatively. The LAAA is encouraged by what has happened in a short time, in relation to new rates.
“As insurance agents and brokers, we have a duty to provide our communities access to affordable insurance products. Although it is still too soon to tell, it appears that the new regulations will prove to be a help to us, and not a hindrance. Ultimately, if it is good for our customers, it is good for us all.”
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