Weekly Dispatch: Oct. 20, 2022

October 20, 2022


Inflation, other factors taking toll on auto insurance industry

The U.S. personal auto insurance market is being hit hard in this inflationary environment, with sharp deteriorations in combined and loss ratios expected to continue for the foreseeable future, according to the Insurance Information Institute. In its updated 2022 Trends and Insights: Personal Auto Insurance Rates, the Triple-I noted the combined ratio—a measure of profitability used by insurers to gauge how well they are performing—for personal auto had worsened quickly from 92.5 in 2020, which had been the industry’s best underwriting result in at least 25 years, to more than 105 forecast for 2022. A combined ratio of 100 indicates insurers are paying out $1 in claims and expenses for every premium $1 collected. A loss ratio is the percentage of each premium dollar an insurer spends on claims.

PIA asks U.S. Senate to reject ENABLERS Act

PIA joined a coalition of trade associations in a letter to Senate Majority Leader Chuck Schumer, D-N.Y., and Minority Leader Mitch McConnell, R-Ky., to express opposition to the Establishing New Authorities for Business Laundering and Enabling Risks to Security Act, which passed the House as part of this year’s National Defense Authorization Act. The ENABLERS Act would require many businesses to collect and report ownership information and suspicious transactions; it would represent a broad expansion of the Corporate Transparency Act’s reporting requirements—even though those requirements have not been implemented yet, so no one knows how effective they could be. PIA has several concerns about the bill. First, the federal government’s collection of this new data increases the data’s vulnerability to breach and theft. Second, the burden for providing the data will fall on the businesses themselves, and, particularly in our current economic environment, small businesses will be ill-equipped to absorb the costs of this additional reporting. Finally, ENABLERS Act supporters already are pushing Congress to make the resulting database public, which could result in easier access for those who would use such data for nefarious purposes.

The ‘secret sauce’ for post-pandemic leadership success

It would be an understatement to say that the devastating spread of COVID-19—and industry’s collective reaction thereto—has prompted a seismic shift in how corporations intend to operate in the post-pandemic era. One particularly notable pivot is that toward staff empathy and engagement. This profound cultural shift requires business leadership at all levels—from C-suite executives, division and department heads and team leaders, to entrepreneurs of every ilk—to level up and evolve their managerial skillsets to meet new occupational expectations.

CID exempts some auto carriers from SDMS requirements

The Connecticut Insurance Department announced it would be exempting all insurers who write private passenger auto insurance from the Statistical Data Monitoring System requirements. The requirements had been intended as a low-cost method for data collection when the regulation went into effect about 30 years ago. However, technology has advanced to the point insurers do not need the SDMS for data collection, and it has become financially burdensome without a clear benefit to insurance-buying customers in Connecticut. The Connecticut insurance commissioner determined that the lack of need and consequent burden these systems place on insurers justifies waiving the requirement immediately. The waiver also extends to all rating and advisory organizations.

NHID, New England College: New educational partnership

The New Hampshire Insurance Department and New England College announced the creation of a course designed to provide students with the opportunity to learn about the insurance industry. The course will introduce students to the nature of risk, risk identification, general risk management techniques, and the management of risk through insurance. It covers why individuals or corporations purchase insurance, what constitutes an intelligent insurance plan, what products are available in the insurance marketplace and how those products are regulated by the NHID.

N.Y.: Funds released to support counterterrorism efforts

Gov. Kathy Hochul announced more than $246 million in federal funding to support counterterrorism and emergency preparedness efforts across New York state. The funding—provided by the Federal Emergency Management Agency through its FY2022 Homeland Security Grant Program—supports regional homeland security preparedness efforts, including planning, organization, equipment, training, and exercise activities which are critical to sustaining and improving community prevention, protection, response, and recovery capabilities. The New York State Division of Homeland Security and Emergency Services manages these programs in close coordination with local stakeholders.


N.J. carriers must send notices of rating filings above 7%

New Jersey law continues to require carriers in the state to send notices to all insureds when they file for a rate increase greater than 7%. These notices go to insureds before any of the filed rates are approved and exact quotes can be provided to individual policyholders. This greatly limits the amount of information agents have to share with policyholders on how the proposed rate increases may affect their premiums. The Department of Banking and Insurance evaluates large premium increases closely and may engage in discussions with carriers before approving the final rates. While carriers do not need to send this notice to agents, PIA strongly encourages carriers to provide notice to their independent agents in advance of the mandatory notice being sent to policyholders. Advanced notice best allows agents to answer their insureds’ questions during a confusing situation. PIANJ has an FAQ with additional information on this issue, which is available to all member agents.

N.J.: September ACORD forms update

In the latest ACORD forms update, New Jersey ACORD 64 NJ (2023/01) New Jersey Auto Supplement: Basic Policy Coverage Selection Form is revised with an effective date of Jan. 1, 2023. Included in the updates are: 1. a change in the amounts in the bodily injury section and the addition of a combined single limit feature with a check box to accommodate combined single limits; 2. the deletion of $5,000 and $10,000 under property damage, which is replaced with $25,000 and add $50,000, $100,000 and $250,000; and 3. a change in the uninsured/underinsured motorist coverage elections to $25,000/$50,000, $50,000/$100,000, $100,000/$300,000 and $250,000/$500,000.

Educating insurance agents

N.Y.: New classes that meet the New York State Department of Financial Services’ new CE requirements are available online and in private on-site sessions.

Conn./N.J./N.Y.: Educate your clients about auto rentals

Have you ever read a contract that needs to be signed before someone rents a vehicle? Learn what prudent insurance agents and brokers should recommend to their client when renting vehicles during Caveat Emptor! Renting Vehicles: Hired and Non-Owned Autos on Monday, Oct. 24, 2022, from 9 a.m.-noon. This webinar, taught by Steven D. Lyon, CPCU, CIC, CRM, CRIS, AAI, ARM, AIS, MLIS, AFIS, will discuss: the definition of a permissive user; the definitions of collision damage waivers and loss damage waivers and whether they should be purchased; the coverage available through credit card providers or personal/commercial auto policies; and any contractual problems and issues. This class is available for continuing-education credits in the following states: Connecticut (3 PC), New Jersey (3 GEN); and New York (3 BR,C3, PA, PC). The class is sponsored by Virtue Risk Partners.


NJYIP Holiday Social: Don’t forget your best ugly sweater

Join us for the NJYIP Holiday Social to be held Tuesday, Nov. 29, 2022, at The Horseshoe Tavern, in Morristown. We will have music, an open bar, assorted appetizers, and a light dinner along with ugly sweater contests and prizes! Ugly sweaters are encouraged, but not required. Additionally, we will honor the NJYIP of the Year. Submit your nominations today. Special: Buy one ticket and get 30% off your second ticket—Register today.

Register now

NEXT WEEK: Tuesday, Oct. 25, 2022: Capital RAP—Pre-registration cut off is Friday, Oct. 21, at 2 p.m. At-the-door prices will be higher.

Thursday, Oct. 27, 2022: CTYIP Fall Reception

Thursday, Nov. 3, 2022: PIWA Fall Reception

Wednesday, Nov. 16, 2022: PIANJ Deep Dive on the Lifecycle of a Cyber Risk

Thursday, Nov. 29, 2022: NJYIP Holiday Social

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