The Colorado House Economic and Business Development Committee has voted 9-4 to defeat a bill that homeowner’s insurance carriers say would have restricted their underwriting freedoms and their ability to provide consumers with rates that accurately reflect the consumer’s risk of loss exposure.
Senate Bill 15, “concerning the requirements for a homeowner’s insurance company to take adverse action on existing insurance coverage for a home based on claims experience,” would have prohibits a homeowner’s insurance company from canceling or refusing to renew a homeowner’s insurance policy based on claims experience so long as the claims experience shows 2 or fewer claims in the previous 36 months.
“NAMIC worked in conjunction with other members of the insurance industry to defeat this anti-insurance consumer, anti-underwriting accuracy, and anti-fairness legislation, and we commend the Colorado House Economic and Business Development Committee for defeating a bill that would have created unfair cross-subsidization of rates problems for consumers that would have led to actuarially unsound homeowners’ insurance rates for Colorado homeowners,” said Christian J. Rataj, Western state affairs manager for the National Association of Mutual Insurance Companies (NAMIC).
“Insurers need the freedom to look at a complete picture of the policyholder’s risk of loss exposure potential in order to make an informed underwriting decision. Unfortunately, the proposed legislation posed a serious threat to the accuracy of insurers’ underwriting practices as it would have prevented insurers from considering certain claims history relevant to a policyholder’s risk of loss exposure,” he added.
He noted that the Colorado Division of Insurance already has adequate and appropriate regulatory authority to review homeowners’ insurance rates to ensure that they are not excessive, inadequate, or unfairly discriminatory.
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