SD34 - The Availability and Affordability of Motor Vehicle Liability Insurance
Executive Summary: The Joint Subcommittee began its study of motor vehicle liability insurance by conducting three public meetings in Richmond, Virginia on August 31, 1989, September 20, 1989, and October 31, 1989. At the August 31, 1989 meeting, the Subcommittee adopted an extensive agenda of topics developed by the Office of the Attorney General. The Subcommittee also received input from the Commissioner of Insurance and representatives of insurance companies, insurance agents and consumers. Topics identified for study included: (1) consumer awareness; (2) the assigned risk plan; (3) automobile theft and insurance fraud; (4) uninsured motorists; (5) the named driver exclusion; (5) duplicate payments and stacking; (6) premium surcharges; (7) cancellations and nonrenewals; (8) settlement problems; (9) safe driver discounts; (10) competition and insurer profitability; and (11) costs associated with drunk and drugged driving. Members of Subcommittee also expressed interest in no-fault insurance and the insurance industry's antitrust exemption. Chairman Saslaw stressed the importance of conducting public meetings at convenient locations around the State to give interested citizens an opportunity to comment. At the September 20, 1989 meeting, the Subcommittee heard presentations on consumer awareness, the assigned risk plan, automobile theft and insurance fraud. The Office of the Attorney General proposed point-of-sale disclosure requirements for private passenger automobile insurance and safeguards to ensure proper use of the assigned risk plan. Studies were presented showing that consumers with clean driving records are sometimes placed in the assigned risk plan. Initiatives to control insurance costs by reducing automobile theft and insurance fraud also were discussed. At the October 31, 1989 meeting, the Subcommittee heard presentations on a range of issues. The meeting began with presentations on highway safety and a new program to apprehend and prosecute drunk drivers with videotaped evidence. Legislative initiatives to control insurance costs by reducing automobile theft and insurance fraud also were discussed. The Office of the Attorney General made a presentation on uninsured motorists and proposed insurance certification requirements for registering a vehicle as insured. The Attorney General also proposed consideration of legislation that would permit motor vehicle insurance policies to exclude a named driver from coverage, subject to exceptions for unemancipated minors, dependent children and students. The insurance industry made presentations on proposed reforms to control insurance costs by eliminating or restricting duplicate payments, stacking of coverages, and subjecting claims for medical expenses to peer review by insurer-selected physicians. Recent court decisions concerning medical payments insurance also were discussed. The insurance industry's proposals produced considerable debate, with opposing presentations by representatives of the Virginia Trial Lawyers Association. The Attorney General's Office made a series of proposals to address consumer concerns relating to policy cancellations and nonrenewals, premium increases based on accidents and claims, and problems in the settlement of insurance claims. The proposals included a prohibition against retaliatory nonrenewal o f a policyholder who files a complaint with the Commissioner of Insurance and civil sanctions to penalize insurers for wrongful cancellation or nonrenewal, improper premium increases and bad faith denial of insurance claims. The Attorney General's proposals also engendered debate, drawing opposition from the insurance industry and support from both the Virginia Trial Lawyers Association and Virginians for Fair Rates and Fair Compensation. The meeting concluded with discussions of plans for a future meeting to discuss the topic of no-fault insurance. Chairman Saslaw indicated that one of the recommendations of the Subcommittee should be to continue the study for another year to allow further consideration of the issues and proposals which have been presented and to allow an opportunity for public comment at meetings in different locations around the State. The Attorney General and several consumer interest groups concurred in the recommendation. |
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