CT: AIA Applauds Defeat of Bill to Create State Fund

CT: AIA Applauds Defeat of Bill to Create State Fund

HARTFORD, CT - The Connecticut General Assembly adjourned its 2010 regular session at midnight yesterday, concluding a relatively successful legislative session for property-casualty insurers, according to the American Insurance Association (AIA).

“Overall, Connecticut legislators made the right decisions on property-casualty insurance issues this session,” said Laura Kersey, AIA assistant vice president, Northeast region. 

Notably, the General Assembly failed to act on HB 5308, An Act Establishing a Nonprofit Workers' Compensation Insurance Company.  This legislation would have established a state-sponsored workers’ compensation insurance company.

“Any move to implement a state fund in Connecticut would have been inconsistent with the national trend towards privatization,” said Kersey.  “The so-called ‘mutual’ insurance company would have actually been a government-sponsored insurer with competitive advantages in the marketplace, intended to skew a level playing field now existing among private market participants, supposedly for the benefit of small employers.  Fortunately, legislators recognized that Connecticut’s workers’ compensation market is already healthy, stable, and competitive, and that a state fund is both unnecessary and ill-advised.”

The General Assembly also approved SB 427, An Act Concerning the Use of Hand-Held Mobile Telephones and Mobile Electronic Devices by Motor Vehicle Operators, which would make the penalties for texting while driving the same as using a cell phone while driving.  If enacted, the law will require first time offenders to pay a $100 fine and that second and third violations carry $150 and $200 fines, respectively. 

“Distracted driving is a top priority for the insurance industry and we were pleased to see legislators devote attention to the serious issue of texting while driving,” stated Kersey.  “Studies have shown that users of mobile devices are more likely to get into accidents than drivers who dedicate their full attention to the road.  These increased penalties are a way to encourage drivers to keep both eyes on the road at all times, thereby ensuring that roads are safer for all travelers.”

In addition, Connecticut lawmakers passed HB 5014, An Act Concerning Automobile and Personal Risk Insurance, which includes provisions codifing the Insurance Department’s current guidelines on the use of financial history measurement programs and establishing “extraordinary life circumstance” exceptions to the use of credit.  The bill also contains provisions regarding calculating the settlement amount on totaled motor vehicles.

AIA was also pleased with a number of legislative decisions to not pass bills that would have negatively impacted the property-casualty insurance industry, including SB 61, An Act Removing the Requirement of Employer or Insurer Preapproval for the Provision of Certain Medical Examinations and Treatment to Injured Workers, HB 5433, An Act Adjusting Insurance Guaranty Fund Credits, which would have reduced the premium tax offset currently available for insurer assessments paid to the guaranty association from 100% to 50%, and SB 257, An Act Concerning Medical Payments Coverage for Automobile Insurance Policies, which would have required auto liability insurance policies to provide medical payments coverage in the amount of at least $5,000 per person per year to cover hospital emergency room services.

“The General Assembly wisely decided not to pass legislation that would have decreased competition or placed excessive burdens on the property-casualty insurance industry.  Overall the results from the 2010 session will help maintain a healthy marketplace for Connecticut policyholders and consumers,” Kersey concluded.

Source: American Insurance Association