The Arkansas General Assembly has completed its business for 2005, but will return for a formal and mostly ceremonial sine die adjournment on May 13, the American Insurance Association (AIA) reported.
“AIA had two crucial goals this session. One was to prevent the enactment of legislation that would prohibit the use of credit information by insurers,” said John Marlow, AIA assistant vice president, southwest region. “To that end, AIA joined with other industry groups, and succeeded in defeating a measure (HB 1315) seeking to place a ban on the use of credit information by insurers for personal auto rating and underwriting,” he said.
“Passing this bill would have been a big mistake for a number of reasons, the most important of which is that many, many Arkansas consumers would have ended up unfairly paying more for their auto insurance coverage. Virtually every study that has been conducted on the use of credit scoring shows that people with low credit scores are more likely to file insurance claims. Without credit scoring, higher risk customers could pay less while lower risk customers could pay more, which is totally unfair,” said Marlow.
“Our second major goal was to protect the tort reform measures that were enacted in 2003 from being eroded. As it turned out, the Arkansas trial bar introduced a so-called ‘insurance reform’ measure (HB 2075), which was clearly done in retaliation for the sweeping tort reforms enacted two years ago. Working jointly with the Department of Insurance (DOI) and other industry representatives, we developed SB 233 as an alternative to the extremely onerous ‘reform bill’ supported by the trial bar,” explained Marlow.
“Passage of SB 233 helped preserve the competitive rating and form filing laws and regulations currently on the books in Arkansas. AIA is continuing to work with the DOI on the implementation of various provisions in SB 233, most notably those in the producer compensation section,” he said.
Gov. Mike Huckabee (R) has 10 days from the date of delivery to his office to either sign, veto or allow a bill to become law without his signature. Legislation either signed or not vetoed by the governor, and passed without an emergency clause, becomes effective 90 days after the legislature adjourns sine die, which is May 13 this year.
Topics Legislation Alaska Arkansas
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