5/20/08

Louisiana House Panel OKs Hike in Car Insurance Minimum

In a move that insurers say could lead to Louisiana having the highest auto insurance liability rates in the nation, a House of Representatives committee has approved HB 1312, which would raise the minimum insurance coverage Louisiana motorists must carry on their vehicles.

Then-Governor Kathleen Blanco vetoed a similar bill last year. She argued that raising the cost of minimum auto insurance would be too expensive for too many drivers, causing them to drop all coverage.

The insurance industry agrees with that reasoning, and opposes the bill by Representative Erich Ponti, a Baton Rouge Republican. Ponti said his bill would get Louisiana's minimum coverages to the same level as neighboring states.

The House Insurance Committee voted 6-2 to send the bill to the House floor.

The Property Casualty Insurers Association of America (PCI) thinks the bill is "bad news for consumers," according to a statement released by the insurance trade group after the committee vote.

HB 1312 would increase the current minimum limits of $10,000 for bodily injury liability to one person, $20,000 for bodily injury liability for two or more persons injured in any one accident, and $10,000 for property damage liability (commonly stated as 10/20/10 limits) to 25/50/25.

Greg La Cost, assistant vice president and regional manager for PCI said the bill would force many drivers "to buy additional insurance coverage whether they want it or not. If a motorist wants additional coverage, he or she already has the option to purchase more protection."

According to PCI, Louisiana's average annual liability premium for all policyholders is sixth highest in the nation, at $665 per year. If the limits are increased to 25/50/25, the increase to the state's average liability premium would go up to about $790, making it the highest in the nation. The minimum limits increase could affect approximately 1.5 million Louisiana drivers.

House Bill 1312 can be found at http://legis.state.la.us/

Another bill dealing with auto insurance failed to garner support in Louisiana's Senate. Sen. Derrick Shepherd had proposed legislation that would force an insurer to offer homeowners polices to active duty military personnel who receive auto insurance from the same firm.

Sen. Dan "Blade" Morrish objected to another provision in the proposed legislation, one that would expand a unique consumer protection provision in Louisiana law -- a restriction of insurers' ability to drop a policyholder if the homeowner has held the policy for three years or longer.

The bill by Shepherd, D-Marerro, would have expanded that protection to situations when the homeowner moves into a new dwelling, no matter its condition or location.

Morrish, R-Jennings, noted that Louisiana is the only state with such a homeowners protection and called Shepherd's proposed expansion "absolutely ridiculous."

The bill (Senate Bill 61) failed on a vote of 16-17, likely killing it for the session.

Tight New Restrictions for White Label Insurance Products

May 20 - The South African insurance industry may soon be experiencing a number of significant changes in terms of white label insurance, due to recent events that have led to authorities determining the need to change the current laws.

Under present legislation, there exists a grey area whereby it is not quite clear who is responsible for insurance disasters - the insurance license holder, or the companies to whom they rent out their licenses, known as white label insurance products.

A number of cases involving the abuse of white label insurance products have recently emerged in the South African market. The most controversial involves license holder Metropolitan Life, who is being held responsible for money that was taken wrongfully by the now liquidated white label company, Ovation investment services for Metropolitan's living annuity plan for pensioners. Metropolitan is objecting to the fact that it needs to be held liable for the lost money.

The new legislation will reiterate once and for all that the responsibility for all binder agreements, or white label insurance products as they are more commonly known, falls on the license holder. According to these terms, the license holder will be liable for any claims that relate to the insurance policies, including claims that arise should the white label company fail to comply with an agreement with the life assurance company.

In simpler terms, the insurance license holder will remain responsible for the compliance with the country's Long Term Insurance Act.

The new legislation in fact strengthens the position held by the Financial Services Board and clarifies any doubts that license holders may have on the issue

Insurance Word of The Week

Our ninth insurance word of the week is: Auto Insurance

Vehicle insurance is widely referred to in the USA and other countries as Auto Insurance. This type of insurance is purchased for cars, trucks, and other vehicles. Its primary use is to provide protection against losses incurred as a result of traffic accidents and against liability that could be incurred in an accident.

Auto insurance can cover some or all of the following items:

The insured party
The insured vehicle
Third parties
Different auto policies specify the circumstances under which each item is covered. For example, a vehicle can be insured against theft, fire damage, or accident damage independently.

Many US states have minimum car insurance requirements, but the minimum amount of required insurance may not cover all of your costs. If you cause an accident that results in a lawsuit and your insurance limits don’t cover all of the damages, your assets could be pursued.

Each state in the USA requires auto insurance companies to file how they calculate customer rates, and insurers cannot deviate from these filed rates. Each state also has regulators who review that information and the rates companies charge.

Three of the biggest and most well known providers of Auto insurance in the US are GEICO, Progressive and State Farm Insurance

Insurance Word of The Week

Our ninth insurance word of the week is: Auto Insurance

Vehicle insurance is widely referred to in the USA and other countries as Auto Insurance. This type of insurance is purchased for cars, trucks, and other vehicles. Its primary use is to provide protection against losses incurred as a result of traffic accidents and against liability that could be incurred in an accident.

Auto insurance can cover some or all of the following items:

The insured party
The insured vehicle
Third parties
Different auto policies specify the circumstances under which each item is covered. For example, a vehicle can be insured against theft, fire damage, or accident damage independently.

Many US states have minimum car insurance requirements, but the minimum amount of required insurance may not cover all of your costs. If you cause an accident that results in a lawsuit and your insurance limits don’t cover all of the damages, your assets could be pursued.

Each state in the USA requires auto insurance companies to file how they calculate customer rates, and insurers cannot deviate from these filed rates. Each state also has regulators who review that information and the rates companies charge.

Three of the biggest and most well known providers of Auto insurance in the US are GEICO, Progressive and State Farm Insurance