HOUSE BILL REPORT

HB 920

BYRepresentatives Zellinsky, Lux, S. Wilson and Taylor

Providing specific insurance rate-making criteria for passenger cars with safety and anti-theft devices.

House Committe on Financial Institutions & Insurance

Majority Report:     The substitute bill be substituted therefor and the substitute bill do pass.  (14)

     Signed by Representatives Lux, Chair; Zellinsky, Vice Chair; Betrozoff, Chandler, Crane, Day, Dellwo, Ferguson, P. King, Meyers, Niemi, Nutley, Silver and Winsley.

House Staff:John Conniff (786-7119)

AS REPORTED BY COMMITTEE ON FINANCIAL INSTITUTIONS & INSURANCE

FEBRUARY 23, 1987

BACKGROUND:

In 1984, the legislature adopted an act requiring children under the age of five to be properly secured in a carseat whenever riding in a motor vehicle.

Last year, the legislature adopted a mandatory seat belt law that requires all motor vehicle occupants to wear seat belts except when riding in certain types of motor vehicles or when a licensed physician certifies that the person is unable to wear a seat belt.  Some motor vehicle liability insurers intend to offer discounts for certain types of coverages to reflect potential savings from the wearing seat belts.

Some motor vehicle liability insurers also offer a premium discount for the comprehensive coverage of an auto policy when the insured vehicle contains an anti-theft device.  The most common discount given is 5 percent for alarms and 15 percent for disabling devices.

SUMMARY:

SUBSTITUTE BILL:  Insurance companies that issue motor vehicle liability insurance policies must take into consideration anticipated changes in losses that will result when policyholders wear seat belts and when policyholders install anti-theft devices in their vehicles.  The insurer must report these changes in a rate filing with the Insurance Commissioner so that the commissioner can use the information in deciding whether to approve a rate.  Similarly, insurers must take into consideration changes in losses from the use of running lights and from the insuring of more vehicles than drivers under the same policy. 

SUBSTITUTE BILL COMPARED TO ORIGINAL:  The substitute bill added requirements that insurers consider the rate impact of the use of running lights and consider granting multi-vehicle discounts.

Fiscal Note:    Not Requested.

House Committee ‑ Testified For:     Basil Badley, American Insurance Association.

House Committee - Testified Against: None Presented.

House Committee - Testimony For:     So long as insurers are not required to offer discounts unless the discounts are actuarially supported, insurers will be able to comply with this act.  However, legislators should not expect discounts until data justifies them.

House Committee - Testimony Against: None Presented.