Auto Insurance Affordability
Consumer groups seek rejection of auto insurance affordability report. Plus regulatory developments in California and Australia.
- October 2018
Consumer groups are asking state regulators to reject a forthcoming report on automobile insurance affordability by a National Association of Insurance Commissioners panel, calling the data biased and urging the panel to start anew.
The Consumer Federation of America and the Center for Economic Justice, criticized in a comment letter the latest outline issued by the NAIC's auto study working group. The consumer groups concluded in a statement the panel's work will not serve the public interest, and the NAIC should start over. The groups also want the Federal Insurance Office to conduct a new auto insurance affordability study.
California Insurance Commissioner:
California Insurance Commissioner Dave Jones has endorsed state Sen. Ricardo Lara, a Democrat, in Lara's bid to succeed Jones in the Nov. 6 general election.
“Ricardo's unique background combined with his tremendous leadership experience in the state Legislature on issues ranging from health care to immigrant rights to consumer protection will enable him to hit the ground running as the next insurance commissioner,” Jones said in a statement.
Lara is running for Jones' current job against independent candidate and former Insurance Commissioner Steve Poizner.
Lara and Poizner, who was a Republican during his time as commissioner, defeated two other candidates in the state's open primary election that pits the top two vote-getters against one another in the general election.
California lawmakers have passed legislation to prevent insurers from canceling or non-renewing residential property insurance policies for one year after the declaration of an emergency based solely on whether the property is located where wildfires have occurred.
Senate Bill 824 awaits consideration by Gov. Jerry Brown. The California Department of Insurance said many homeowners policies in high-risk counties are not being renewed, while other homeowners chose not to renew because of high premium rate increases or lower coverage options. The one-year prohibition on cancellations or non-renewals in some areas would extend consumer protection to those homeowners who survive wildfires in addition to those who experience total losses.
Pressure-selling techniques, poor product design and incentive schemes are causing an increasing number of customers to cancel their life insurance policies, according to Australian Securities and Investments Commission.
In its review of direct life insurance sales, the corporate watchdog revealed one in five of all policies taken out were canceled in the cooling-off period and one in four of all policies that remained in force beyond the cooling-off period were canceled within 12 months. And within three years, three in five of all policies sold were canceled.
ASIC noted consumers struggle with the direct life insurance sales experience and the complexity of the products, and consumer understanding of key features is often poor.