Insurance Commissioner Chuck Quackenbush has formulated a plan for a low-cost auto insurance policy, one he says "uses some of the best aspects of insurance policies already in force and available to California consumers."
According to Quackenbush, this "prototype" policy could result in decreases of 20% to 50% in addition to rate cuts consumers already are seeing. Quackenbush said that his prototype could be purchased for as little as $290 a year.
Dana Spurrier, chief spokeswoman for the California Department of Insurance, said that the commissioner will institute the policy via his regulatory authority.
The proposal resulted from input that the commissioner received during two public hearings last April on the issue of how to craft a low-cost auto policy. Spurrier said that Quackenbush's proposal incorporates elements contained in about six existing policies being sold in the state.
The Quackenbush prototype will include the current standard minimum liability limits of $15,000 per person, $30,000 per accident and $5,000 for physical damage. His policy will not include coverage for medical payments and uninsured motorist unless requested by the policyholder. The crux of Quackenbush's proposal is a series of restrictions to which policyholders must agree in order to receive the low rate-and the coverage promised. The restrictions include the following:
* All occupants of the insured vehicle must wear seat belts.
* All persons who operate the insured vehicle must be "good drivers" as defined by Proposition 103.
* No driver of the insured vehicle shall use a cellular phone while operating the vehicle.
* All drivers of the insured vehicle must abstain from consuming alcoholic beverages in a specified time frame preceding the operation of the vehicle.
* Additional discounts would be available if the vehicle is driven fewer than 7,500 miles annually and if the insured promises to report all accidents within 24 hours of their occurrence.
Failure to comply with any of the above requirements would result in the imposition of a $5,000 deductible on the coverage that otherwise would be available.
Area news
NIPC becomes SAFECO's dental program administrator
National Insurance Professionals Corporation (NIPC) announced that it is now the program administrator for SAFECO's Dentists Professional Liability program in the Pacific Northwest.
The program, written in Washington, Oregon and Idaho, offers no age limit for retirement coverage, deductible can apply to claims expenses without reducing limits, full prior acts availability, and additional options for extended reporting periods. New filings have enabled NIPC to offer lower pricing.
For more information, contact Darlene Scott or Bonnie North at National Insurance Professionals Corporation; 1040 NE Hostmark Street, Suite 200; Poulsbo, Washington 98370-8720; phone (800) 275-6472; fax (360) 697-3688.
California
Martinez declares candidacy
Assemblywoman Diane Martinez, D-Monterey Park, has declared her candidacy for the commissioner's post, according to the Weekly Bulletin, published by PIA Insurance Services. The Weekly Bulletin quotes Martinez as stating that Insurance Commissioner Chuck Quackenbush "has sold out to the insurers, and people are sick of it."
Martinez, who is serving her third, and final, term in the lower house, joins fellow Democrat Hal Brown, a Marin County supervisor, as the only two official, declared candidates in the race.
Union Bank gets into insurance
Union Bank of California, a nationally chartered bank that is the third largest commercial bank in California, has set up a subsidiary, City of Industry-based UBOC Insurance Services, that is a licensed insurance agency and has appointments with AIG, Hartford Life and TransAmerica Life.
UBOC Insurance Services' initial offerings include personal auto (written through AIG), term life, accidental death, health coverages and a medical services discount program. Union Bank said that it plans to add more coverages later this year, including homeowners, renters, small commercial and long-term care. Union Bank also said that insurance services will be available at its "nearest banking branch," of which Union Bank has more than 240 in California.
Nevada
WC rates drop
The State Industrial Insurance System, Nevada's monopolistic (until July 1999) workers compensation fund, announced that it had received approval from Nevada Insurance Commissioner Alice Molasky-Arman for a rate reduction as of April 1. The 22% reduction will result in approximately $115 million in savings for Nevada employers. The rate cut is the largest in the 84-year history of the SIIS and the second decrease in the past two-and-a-half years.
No class of business will experience a rate increase, although some won't see any decreases. Service businesses such as restaurants and nursing homes can expect an average reduction of 29%. Other classes that will see rates reduced by more than 22% include clerical, agriculture and manufacturing. The reasons for the decreases, according to Doug Dirks, chief executive officer of the SIIS, are Nevada employers' involvement in and support of on-the-job safety programs which, he said, reduced the frequency and severity of workplace accidents. Dirks also said the SIIS had successful cost-control and investment strategies. *
©COPYRIGHT: The Rough Notes Magazine, 1998