ICAE – Washington, DC – Fall 1999 Exchange – Q & A Panel Discussion

Q &A following panel discussion

RE: Please comment on the impact of S900/HR10 Financial Modernization legislation?

Reider: NAIC supports the legislation, and believes it’s good for competition. There are no federal regulators of Insurance. “Protecting an investor is different than protecting a policyholder.”

RE: Should rate information be included at insurers’ Web sites?

Sebelius: Yes

Montemayor: Yes

Covington: Need to put rates in proper context; what type of product and service are consumers getting? There can be differences in products where simple rate comparisons don’t serve the consumer well.

RE: What is the fundamental responsibility of the DOI?

Sebelius: To promote best practices, but don’t dictate what states do. Also focus on consumer outreach.

Reider: To establish a coalition against fraud. Fraud is a serious problem that costs the consumer; insurers and consumers can both benefit from working together.

Montemayor: Sharing information is valuable as there have been dramatic changes in recent years. Sees best practices using more of a risk-based approach.

There was also discussion about mechanisms to prevent “bad actors” or dishonest agents from moving from company-to-company and state to state. A national database or sharing of information between state and federal agencies could help.

RE: What are your thoughts on the State Farm OEM/aftermarket parts class-action suit decision?

Montemayor: Limiting repairs to OEM, copyrighted parts would eliminate competition, increase the cost of repairs and raise premiums.

Sebelius: Vehicles under warranty should use warranty parts [OEM] parts; older vehicles have more flexibility because OEM parts may not be easily accessible or affordable.

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