Around the PIA Western Alliance States – Week of April 29, 2024

Arizona — Egg on the State’s Face: A restaurant group in Tucson has filed a lawsuit demanding the state withdraw its mandate that by 2025 all eggs sold in stores come from cage-free hens.

The state wants hens in cages no smaller than one square foot of floor space which doubles the current law. Union Hospitality Group owner, Grant Krueger says this is going to increase his egg costs considerably.

The state disagrees and says it will increase the cost of an egg to a producer by a penny to 3.25 cents.

Source link: Business Insurance — https://bit.ly/4b9ONVO

Oregon — Insurers writing homeowners policies        

Date:  April 24, 2024

RE:     Expectations of insurers regarding explanations of insurance decisions

I.          Purpose

The purpose of this bulletin is to remind insurers of the division’s expectation to provide clear and unambiguous communications about insurance decisions and to provide timely information to producers.

II.         Authority

ORS 731.008

ORS 731.016

ORS 746.110

ORS 746.075

OAR 836-080-0155

III.        Background

The Insurance Code prohibits any person from making untrue, deceptive, or misleading statements or representations relating to the business of insurance.

Questions and concerns have been raised about potentially misleading information recently circulating among the general public, such as the following:

Insurers are not writing new policies for properties within specific zip codes, counties, or cities; and

Insurers are not evaluating neighborhoods or individual homes when determining risk and eligibility for insurance.

The Insurance Code requires that any insurance related information being conveyed is accurate. Insurance producers have been directed to confirm information with the carriers that they represent.

IV. Director’s Guidance

It is extremely important that consumers receive accurate information about decisions made with respect to their policies. Historically and currently, robust data tools are used to make pricing and underwriting decisions, and the basis of all rating or underwriting decisions should be accurately communicated. When confronted with questions from either insurance producers or consumers about the tools and data used by insurance companies, insurers should timely and accurately relay the factors that are incorporated into the company’s rating and underwriting decisions.

Insurance producers have been directed to confirm homeowners insurance underwriting and rating decisions and rationales with insurers. See Bulletin XX.

This bulletin takes effect upon publication.

Oregon — Insurance producers selling homeowners policies: Expectations of insurance producers regarding homeowners insurance underwriting and rating decisions

I. Purpose

The purpose of this bulletin is to remind insurance producers about the division’s expectations to provide truthful communications to policyholders.

II. Authority

ORS 744.074

ORS 746.110

III. Director’s Guidance

The Oregon Insurance Code prohibits any person from making untrue, deceptive, or misleading statements or representations relating to the business of insurance.

According to recent consumer complaints and media reports, some insurance producers may have provided misleading information to policyholders. Examples include:

Stating that insurers are not writing new policies for properties within specific ZIP codes, counties, or cities, when in fact carriers are not excluding specific localities; and

Stating that insurers are not evaluating neighborhoods or individual homes when determining risk and eligibility for insurance, when in fact carriers are making those evaluations.

This inaccurate information may have led to misunderstanding among policyholders and the general public. The Oregon Insurance Code requires that any insurance-related information being conveyed is accurate. If a producer is unsure about these issues, it is recommended they confirm the information with the carriers they represent. Insurers have been directed to provide producers with timely and accurate information about their decisions. See Bulletin XX.

It is extremely important consumers receive accurate information about decisions made with respect to their policies. The insurance industry has robust data tools used to make pricing and underwriting decisions that have been in the marketplace for years.

Falsely attributing rating or underwriting decisions is a violation of the Oregon Insurance Code. Insurance producers with questions about the tools and maps used by insurance companies should consult with those companies so that they can accurately relay the factors incorporated into the company’s rating and underwriting decisions.

This bulletin takes effect upon publication.

Washington — Kreidler reminds insurers on proper use of Artificial Intelligence: Washington state Insurance Commissioner Mike Kreidler has issued a technical assistance advisory (TAA) (PDF, 345.79 KB) to insurers on the use of Artificial Intelligence (AI) in their insurance practices. It draws from the guidance the National Association of Insurance Commissioners (NAIC) adopted on AI for insurers in 2023 (PDF, 272.42 KB).

The TAA reminds insurers that decisions or actions impacting consumers made or supported by advanced analytical and computational technologies, including AI, must comply with all applicable insurance laws and regulations. This includes laws that address unfair trade practices and discrimination.

The TAA also includes what Kreidler’s office considers best practices for AI use and the information and documentation that his office may request from an insurer.

“Artificial Intelligence is transforming the insurance industry and how companies are doing business,” said Kreidler. “While I support innovation and the use of AI that contributes to safe and stable insurance markets, this technology may place consumers at risk for unfair, discriminatory practices. I expect insurers to minimize these risks and do right by the consumer.”

About PIA Western Alliance

The Professional Insurance Agents Western Alliance is a membership organization promoting and enhancing the success of independent agencies seeking to grow, learn and be heard within the industry.


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