The Legislative and Political Newsletter of the 
MN Independent Insurance Agents & Brokers Association

April 6, 2016
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Fair Auto Insurance Act Fails to Gain Traction 

Commerce Commissioner Mike Rothman's Fair Insurance Act did not receive favorable attention at the Capitol.  Although the proposal was heard in the Senate Commerce Committee it was not passed.  It failed to receive a hearing in the House.  The bill is now dead for the session.
The wide sweeping proposal to overturn the state's auto insurance "file and use" rating system was hugely controversial from the moment it was introduced.  The current system which relies upon the very competitive auto market to assure appropriate premiums, would be replaced with a prior approval system where the Commissioner must approve all auto insurance rates before their use in the state.  Rothman proposed limiting underwriting to driving records, years of experience of the driver and the miles driven, as the only appropriate underwriting criteria.  The Fair Auto Insurance Act would enact an immediate 20 percent premium reduction retroactive to January 2016.  It would authorize another 20 percent premium reduction for safe driving.

The industry was quick with its total opposition to the proposal.  Nearly 450 insurance producers and company staff helped make the case against the bill at the Insurance Day on the Hill on March 30.   Thanks to the several MIIAB members who participated in the very successful event.

I would suspect that the Commissioner may purse this legislation next year during the 2017 legislative session.  Of course, the upcoming November election with the entire legislature up for reelection could shape the discussion of this sweeping change in auto insurance regulations.

We are now half-way through this year's legislative session and it appears that the state legislature will not be addressing many other major policy issues this year.  They will instead devote most of the remaining five weeks of the session to funding transportation, bonding for state construction projects and perhaps taxes.

Dominic Sposeto
MIIAB Lobbyist