Sounds of Summer
Summer's over, but 2007's July-August stretch was anything but idyllic for the insurance industry.
Another summer has scurried by. About this time of year, elementary schoolchildren are penning their annual “What I Did on My Summer Vacation” essays. Were the insurance industry set to the same assignment, it’s likely they would report spending a little less time on the golf course these few months, given the hyperactive pace of decisions, discussions, recommendations and hearings in July and August. One can hardly wrap one’s mind around the vast number of hearings that have been held and scheduled to discuss auto insurance and coastal homeowners issues. And rest assured, faithful readers, The Standard attends these events so that you don’t have to.*
Usually, a greater level of scrutiny serves to improve ideas and innovations. And the the appropriate level for that scrutiny, in the case of Massachusetts private passenger auto insurance, is the Division of Insurance. However, the Legislature has gotten extensively involved, with Senate members of the Financial Services Committee holding public hearings and the Joint Committee on State Administration and Regulatory Oversight promising to give the auto regulations released last week a once-over. This Committee is chaired by Sen. Dianne Wilkerson, who has declared it her personal mission to prevent the auto insurance system from being altered in any way.
These hearings make politicians feel like they are doing their job, publicly airing their concerns on behalf of their constituents. In the case of some lawmakers, unfortunately, there are grave misunderstandings and a clear unwillingness to listen to clarification. Therefore, while analyzing the Massachusetts auto insurance regulations and the homeowners insurance crisis, the chance exists for this effort to become a giant game of Telephone. An idea starts out coherent and direct; it comes out garbled and less aimed at its original mission.
Outside Massachusetts, things went a bit quiet this summer. Regionally, agents are worried by recent New York State workers’ compensation reforms that would seem to require any employer whose workers might incidentally visit New York on business to carry a New York State workers’ compensation policy. The Empire State’s workers’ compensation board is working on a solution, but for a law that goes into effect this weekend, the confusion has gone on for too long. It’s a prime example of one state legislating the activity and insurance requirements for other jurisdictions for no good reason.
On the national front for Congress, given the August recess, lawmaking has come to a standstill. The previous activity over adding wind coverage to the National Flood Insurance Program might have stalled (the industry would hope). The renewal bill for the Terrorism Risk Insurance Act might seem to be assured passage but this is a dangerous game.
*Unless you want to. In which case, see you there!