Information contained on this page is provided by an independent third-party content provider. WorldNow and this Station make no warranties or representations in connection therewith. If you have any questions or comments about this page please contact email@example.com.
SOURCE National Association of Mutual Insurance Companies
WASHINGTON, June 9, 2014 /PRNewswire-USNewswire/ -- The federal government should avoid imposing any regulations on insurers to impose "affordability," the National Association of Mutual Insurance Companies said today, noting that low-income consumers already spend more on alcohol and tobacco products or audio and visual equipment and service than they pay for auto insurance.
"If consumers can choose to spend more of their income on alcohol and tobacco, and also more on television sets and cable service, than on automobile insurance, it is hard to make the case that it is difficult for these consumers to afford automobile insurance," said Robert Detlefsen, NAMIC's vice president of public policy, in a letter to Federal Insurance Office director Michael McRaith, citing the Bureau of Labor Statistics annual Consumer Expenditure Survey.
FIO had requested comment on how affordability could be defined and potentially measured. Detlefsen wrote that while a specific definition of affordability is largely subjective, the CES provides a real dollar amount as well as the percentage of household income paid for auto insurance. According to the survey, consumers in the bottom 20 percent of income level spend a combined 2.1 percent of household income on alcohol and tobacco and 2.4 percent on A/V equipment and services, compared with 2 percent on vehicle insurance.
FIO also requested comment on affordability with regard to minorities, and Detlefsen noted that insurers do not have information to separate minority consumers from the general population.
"Insurers do not ask about the race or ethnicity of insureds or applicants for insurance," he said, adding that to do so would be "ill-advised and misleading to consumers" and in violation of state laws barring insurers from collecting information on race or ethnicity. "Safe, low-risk drivers come in all races, ethnicities, and income levels – as do high-risk drivers."
Ultimately, Detlefsen offered a note of caution against seeking new regulations to impose an arbitrary idea of affordability on the auto insurance marketplace, arguing that doing so could undermine the fundamental practices that protect all consumers.
"NAMIC cannot stress enough the actuarial and financial importance of accurately matching price to risk so that insurers can keep their promises to policyholders to pay covered claims," he said. "It is imperative that these principles not be subverted by policymakers in the name of affordability."
Director, Federal Public Affairs
©2012 PR Newswire. All Rights Reserved.
7831 N. Business Park Drive