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PIANH 2010 legislative wrap-up

By Matthew Guilbault, Esq.

The New Hampshire General Court has concluded its 2010 legislative session, after addressing a number of key issues with implications for property/casualty insurers, agents and brokers. Here are some of the issues they considered.

Budget: With regard to state finances, the General Court approved the budget bill for the 2010 and 2011 fiscal years. Among other things, the legislation repeals the previously scheduled reduction in the insurance premium tax from 1.25 percent to 1 percent, which was to take effect Jan. 1, 2011. Earlier in the session, policymakers had considered raising the premium tax from 1.25 percent to 2 percent (SB 450), but, ultimately, decided to keep the rate at its current level. The budget bill also will create a legislative commission to study business taxes, including offering tax credits to insurance companies that create new net jobs in New Hampshire. 

Credit scoring: Property/casualty insurers were successful in defeating SB 340, which would have prohibited insurers from charging a higher premium for private-passenger auto or homeowners insurance on the basis of information obtained from a credit rating, credit history or credit-scoring model. Carriers argued that using credit information helps them more accurately assess and price for an individual's risk, benefiting consumers with lower rates and contributing to the overall availability of insurance across the state.

The Legislature did, however, pass (and the governor has signed into law) HB 1236, which prohibits an insurer from canceling, refusing to write or refusing to renew a private-passenger auto or homeowners policy solely on the basis of credit information without consideration of any other applicable and permitted underwriting factors. HB 1236 was introduced at the request of the Insurance Department and is consistent with the state's current regulation on insurance scores.

Policymakers also failed to approve HB 1268, An Act Prohibiting the Use of a Person's Occupation When Obtaining Insurance Coverage.

Rebating: HB 1208,  a proposal introduced at the request of the Insurance Department, was signed into law by the governor. The new law provides new exceptions to the anti-rebating law relative to the giving of promotional items to consumers and raffles or drawings conducted in connection with the marketing or promotion of property and casualty insurance products. New Hampshire's anti-rebating law (embodied in RSA 402:39) prohibits an insurance company or producer from giving anything of value as an inducement to purchase insurance, unless the thing of value is specifically referenced in the policy itself. Knowingly giving (directly or indirectly) a rebate as an inducement to purchase insurance also is an unfair trade practice in violation of RSA 417:4, IX (a). Producers are encouraged to review guidance on the issue of rebating provided by the department at: http://www.nh.gov/insurance/producers/documents/reb_laws.pdf.

Tort: PIANH kept a careful eye on a number of tort-related proposals this session, including HB 1233 to increase the amount of medical payments coverage under motor vehicle liability policies which would have increased the amount of medical payments coverage from $1,000 to $5,000 per person (deemed inexpedient to legislate on March 3); HB 1244 prohibiting insurers from including warning language regarding insurance fraud in communications with an insured or potential claimant (deemed inexpedient to legislate on March 10); HB 1255, an act relative to requirements for apportionment of damages; and HB 1256 restricting medical injury claims subject to pretrial screening panel review to claims exceeding $250,000 in damages (deemed inexpedient to legislate on March 10). Most recently, HB 1315, a proposal relative to the employer's lien on damages and benefits recovered from third persons by employees who have received workers' compensation, was sent to interim study. The bill had been widely viewed as a regressive measure for the insurance industry.

As in all prior years, PIANH actively tracked and supported or opposed a number of important issues considered by New Hampshire's General Court that could have an impact upon our industry this session. We're pleased that, overall, legislators recognized the importance of attracting new businesses and jobs into the state, and maintaining a healthy, competitive marketplace for property/casualty insurers, agents and brokers. 6/10

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