OIR Rule Hearing: Unfair Discrimination in Private Passenger Motor Vehicle Insurance Rates–Based on History of Accidents
Feb 25, 2009
On Wednesday February 25, 2009, the Florida Office of Insurance Regulation (“OIR”) held a Proposed Rule Hearing on Rule 69O-175.008, F.A.C. Unfair Discrimination in Private Passenger Motor Vehicle Insurance Rates–Based on History of Accidents, which specifically affects Florida law stating that an insurer may not impose additional premium on a motor vehicle policy because the insured was involved in a collision unless the insurer determines the insured was substantially at fault in the collision. The proposed changes to Rule 69O-175.008, F.A.C., were drafted in order to clarify that the law applies to both existing insureds and new insureds (e.g. applicants). To view the meeting notice and proposed Rule text, click here.
OIR Assistant General Counsel Stephen Fredrickson presided over the hearing. Also in attendance were OIR General Counsel Steve Parton, and OIR Actuary Howard Eaglefeld.
After Mr. Frederickson explained the purpose of the Rule changes, he opened the floor to public testimony.
A representative of the Florida Insurance Council and American Insurance Association (“FIC/AIA”) voiced serious concerns that the language of the proposed Rule was confusing and would be found unconstitutional by an administrative law judge when applying the rules of statutory construction.
The FIC/AIA representative contended that the proposed Rule exceeds the statute it sought to clarify by expanding the scope of the Florida Legislature’s prohibition against using prior accident history as a grounds for imposing or requesting additional premium to both existing insureds and applicants.
The FIC/AIA representative explained that the language of the proposed Rule was contrary to legislative intent because, in her opinion, it was clear that the Legislature purposefully did not include applicants in the aforementioned prohibition. She further explained that the legislative intent was clear because other parts of the law (subsection (o) of Section 626.9541(1) included language that indicated the Legislature knew how to draft prohibitions against imposing or requesting additional premium that included applicants. The FIC/AIA representative pointed specifically to Section 626.9541(1)(o)6, F.S., to discern legislative intent in Section 626.9541(1)(o)3.a., F.S. The two Sections read as follows (emphasis added):
3a. Imposing or requesting an additional premium for a policy of motor vehicle liability, personal injury protection, medical payment, or collision insurance or any combination thereof or refusing to renew the policy solely because the insured was involved in a motor vehicle accident unless the insurer’s file contains information from which the insurer in good faith determines that the insured was substantially at fault in the accident.
6. No insurer shall impose or request an additional premium for motor vehicle insurance, cancel or refuse to issue a policy, or refuse to renew a policy because the insured or the applicant is a handicapped or physically disabled person, so long as such handicap or physical disability does not substantially impair such person’s mechanically assisted driving ability.
In response to the FIC/AIA representative’s contention, Mr. Parton explained that the language of Section 626.9541(o)(1)3.a. did not specify whether it included applicants or not, and, in his opinion, tried to avoid the issue of defining applicants altogether.
Mr. Eaglefeld added that, instead of defining “applicants,” the underlying reasoning of the proposed Rule is to focus on the meaning of “additional premium” in order to avoid the conflict of determining whether the Rule references “new applicants” or “old insureds.”
The FIC/AIA representative responded to this line of reasoning by saying that she understood what the proposed Rule is trying to do, but that it does not accomplish that goal.
The record of this hearing will be left open until 5:00 p.m. Friday February 27, 2009.
Please note that the material above is a brief summary of the rule hearing. It is not intended to be a comprehensive review of any particular issues relating to the policies and/or Rule(s) discussed. Further, this report should not be relied upon for making any specific decisions. Should you have any questions about any of the above matters, please contact this office.
Colodny Fass will continue to follow this and other issues related to actions taken by the Florida Office of Insurance Regulation in regards to this and other matters, and provide information on and analysis of those issues and events as they arise.
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