House Interim Study Committee on Private Passenger Automobile Insurance: final report

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House Interim Study Committee
on
Private Passenger Automobile Insurance
FINAL REPORT
December 15, 1996
MEMBERS
Representative Maril! n Jarrett, Chairman
Representative Robert Blendu Representative Scott Bundgaard
Representative Linda Aguirre Representative Paul Netman
TABLE OF CONTENTS
Page
AUTHORITY AND SCOPE OF DUTIES . . . . . . . . . . . . . . . . . 2
COMMITTEE ACTIVITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
COMMITTEE AGENDAS AND MINUTES . . . . . . . . . . . . . . . 4
COMMITTEE RECOMMENDATION . . . . . . . . . . . . . . . . . . .2 5
I. AT JTHORITY AND SCOPE OF DUTIES
The House Interim Study Committee on Private Passenger Automobile Insurance was
created on September 19, 1996 by the Speaker of the Arizona House of Representatives
Mark Killian. The Committee was charged with studying:
1. The availability, affordability and accessability of private passenger
automobile insurance in this state, and;
2. The escalation of private passenger automobile insurance premiums.
11. COMMITTEE ACTIVITY
The House Interim Study Committee on Private Passenger Automobile Insurance held
hearings on the following three dates: October 16, 1996; November 13, 1996, and;
December 5, 1996.
111. COMMITTEE AGENDAS AND MINUTES
lnierim Meetine Notice
Open to the Public
HOUSE INTERIM STUDY COMMITTEE ON
PRIVATE PASSENGER AUTOMOBILE INSURANCE
DATE: Wednesday, October 16, 1996
TIME: 3: 00 - 5: 00 p. m.
PLACE: House Hearing Room 3
AGENDA
1. Call to Order
2. Opening Remarks
3. Goals of the Committee:
a Discussion on the availability, affordability and accessibility of private
passenger automobile insurance
b. Discussion of the reasons underlying the escalation of automobile
insurance premiums
4. Public testimony
5. Closing remarks and set time/ date for next meeting
-.
6. Adjourn
Menrbers:
Representative Marilyn Jarrett, Chairman
Representative Robert Blendu
Representative Scott Bundgaard
Representative Linda Aguirre
Representative Paul Newman
** People with & abilities may request reasonable accommodations such as interpreters, alternative formats, or assistance with
\ I
physical accessibility. If you require accommodations, contact the Chief Clerk's Office at ( 602) 542- 3032.
C~~ rP", e~ e, veb
ARIZONA HOUSE OF REPRESENTATIVES '= h, c,, n
Forty- second Legislature - Second Regular Session 0cr3 " 4 ~ ~
1996
HOUSE INTERIM STUDY COMMITTEE ON
PRIVATE PASSENGER AUTOMOBILE INSURANCE
Minutes of Meeting
Wednesday, October 16, 1996
House Hearing Room 3 - 3 : 00 p. m.
TAPE 1, SIDE A
Chairman Jarrett called the meeting to order at 3: 10 p. m. and the attendance was noted.
Members Present
Ms. Aguirre
Mr. Blendu
Mr. Bundgaard
Mrs. Jarrett, Chairman
Members Absent
Mr. Newman ( excused)
Jim Drake, Majority Research Analyst
David Childers, representing Farmers Insurance Group and National Association of Independent
Insurers
Kerry Hayden, Legislative Representative, Farmers Insurance Group
Don Isaacson, representing State Farm Insurance Company
Mike Low, representing Allstate Insurance and American Family Insurance
Chairman Jarrett stated that the purpose of this Committee is to address concerns raised by
constituents about the continued rise of insurance rates.
Jim Drake. Majority Research Analvst, distributed the following material:
-- Publication by National Association of Insurance Commissioners ( NAIC), " State Average
Expenditures & Premiums for Personal Automobile Insurance in 1994" which shows where
Arizona is in relation to other states on expenditures, premiums, trends, etc. ( Attachment 1).
HOUSE INTERIM STUDY COMMITTEE ON
PRIVATE PASSENGER AUTOMOBILE INSURANCE
1011 6196
-- Letter from the Arizona Insurance Information Association dated October 16,1995 providing
information on claiming behavior cited at a recent conference ( Attachment 2).
-- Information on accident rates in Arizona and auto insurance costs provided by the Arizona
Insurance Information Association ( Attachment 3).
Ms. Aguirre queried whether there is a direct correlation between the number of accidents and the
number of autos. Mr. Drake replied in the affirmative. He said there is some statistical support to
show that although accident rates are down nationwide, they are up in Arizona.
Ms. Aguirre asked if there is a correlation between accidents and some of the safety issues that have
been put into place, such as speed limits, harnesses, air bags, etc.. Mr. Drake answered that is one
of the things the Committee will look into.
David Childers. representing Farmers Insurance Grow and National Association of Independent
Insurers, testified that there is concern about why automobile insurance premiums are not decreasing
despite legislation designed to address those rates. He reviewed some laws supported by industry
that have been passed over the last few years: mandatory seat belt law; private passenger
noncancellation or nonrenewal statute; fraud legislation; auto theft authority legislation; and optional
uninsured motorist coverage. He related that total accident costs are made up of a combination of
frequency of accidents and severity of accidents.
Chairman Jarrett said that it is acknowledged that seat belts prevent some serious injuries. She
raised the issue of " soft tissue" injuries and asked whether such injuries are increased by the use of
seat belts.
Ms. Aguirre asked for the cause of the increase in accidents and the contributing factors. Mr.
Childers responded that the increase is attributed to the increase in traffic. He said that most of the
accidents take place in urban areas. Discussion about duplicative light signals is one proposal
submitted to address the rise in traffic accidents. Another proposal discussed is a change in the left-hand
turn signals. Statistics suggest that photo radar also has an impact on traffic accidents. He
maintained that photo radar would have a positive impact.
Mr. Blendu questioned the numbers reported in the handouts which have been prepared by the
insurance industry. He stated that as policy makers, Legislators have to determine the path to take
to resolve the problem. He said he does not see anything positive happening.
Mr. Drake advised that he will contact the Motor Vehicle Department ( MVD) to see if their numbers
correlate with the statistics in the handouts.
Mr. Blendu noted that there may be discrepancies of what is being classified as an accident.
HOUSE INTERIM STUDY COMMIITEE ON
PRIVATE PASSENGER AUTOMOBILE INSURANCE
2 1 01 16/ 96
Mr. Childers stated the numbers the insurance companies are providing are accurate and authentic.
He acknowledged that there may be differences in how reporting organizations are counting
accidents. He said he will work with Mr. Drake to look into this matter.
Mr. Drake advised that MVD has a traffic study branch that compiles reportable accidents.
Mr. Blendu maintained that if the Legislature is going to mandate insurance, it should be able to
explain how it can be afforded. He emphasized that the Legislature has to address this issue.
Mr. Childers commented that the auto insurance industry is not unanimous in support of mandatory
auto insurance.
Chairman Jarrett questioned where mandatory auto insurance comes from if not from the industry.
Mr. Childers replied that he does not know who the proponents were. He related that the insurance
industry is comprised of two distinct proponents: those who want mandatory auto insurance and
those who do not. He said it is not an easy public policy.
Mr. Childers pointed out that the rising cost of insurance is affected by many factors, such as the cost
of replacing an automobile, cost of parts and repairs, cost of medical bills, etc. Inflation has played
a major role in the increased cost. Part of the problem is that claims are generally arbitrated. Even
though damage claims have gone down, personal injury claims have risen.
Chairman Jarrett asked if there is any way insurance companies can arbitrate claims without bringing
in attorneys as a means of reducing costs. Mr. Childers replied that the insurance industry is tight
with its legal dollars. He advised that the cost of arbitration is a problem recognized by insurance
companies and one the industry is trying to deal with.
Ms. Aguirre submitted that in addressing this issue, other matters could be explored, such as road
conditions, timing of lights, left- hand turns, where accidents occur, etc. She strongly suggested that
there is the need to look at what is preventative rather than placing emphasis on after an accident
occurs.
Mr. Childers advised that the National Association of Independent Insurers ( NAII) supports the idea
of provisional licensing. He revealed that legislation will be proposed in the upcoming session that
will deal with this issue. He noted that a very high percentage of accidents across the age groups are
the result of the 16- 18 year- old drivers. Provisional licensing is the issuance of a qualified license
which would have some restrictions, such as: compliance with zero tolerance with respect to alcohol
or drugs; no citations or at- fault accidents; and being accompanied by someone over the age of 21
when driving after midnight. If the requirements are complied with for a two- year period, a full
license would be issued.
Chairman Jarrett remarked that provisional licensing is an interesting point of view. She asked
whether it will lower insurance rates. She said it would take some of those teens off the road if they
were involved in an accident. Mr. Childers said that if a teen drives after he has an accident, the teen
HOUSE INTERIM STUDY COMMITTEE ON
PRIVATE PASSENGER AUTOMOBILE INSURANCE
3 10/ 16/ 96
will be driving without a license. He advised that he will contact the NAII to see if they have any
statistical information on the subject.
In response to Ms. Aguine, Mr. Childers said that he does not know if this will mean lower rates for
teens if they are good drivers. He opined that this would be a move in the right direction. He said
it is a serious proposal by NAII.
Chairman Jarrett asked if a successful auto theft program will result in lower premiums. She noted
that a significant amount of money is being spent for replacement or for repair of stolen cars. Mr.
Childers responded that if experience in other states is an indicator, it will have a positive impact.
Kerry Havden. Legislative Representative. Farmers Insurance Group, referred to the Chairman's
question on seat belts and injuries. She clarified that seat belts prevent serious injuries, such as being
thrown into the windshield, but are not the cause of more " soft tissue" injuries.
In answer to Chairman Jarrett who referred to questions posed by Ms. Aguirre on the cause of
accidents, Ms. Hayden related that the leading cause of accidents is one car rear- ending another car.
The second leading cause of accidents is attributed to left- hand turns.
Ms. Aguirre stated that she would like the two- second delay issue addressed. She also raised the
issue of auto manufacturers removing passenger- side air bags. Ms. Hayden advised that the industry
is divided on this issue. She said the force of an air bag deploying can cause severe problems. When
an air bag explodes, it can cause burns and permanent scarring. In addition, air bags cost $ 1,500
each to replace when deployed. Because of the high cost of air bags, theft is becoming a new
industry.
Mr. Blendu wondered why the industry is not better at providing service. Ms. Hayden stated that
Farmers is working on improving its service.
TAPE 1, SIDE B
In response to Chairman Jarrett's inquiry as to whether mandatory auto insurance has increased or
decreased rates, Ms. Hayden stated that Farmers does not support mandatory insurance. She said
many factors go into computing rates. She said she cannot answer the question of whether it helps
or hurts rates.
Chairman Jarrett raised the issue that many people cannot afford auto insurance, and that they have
to decide whether to buy insurance or buy food for their family. She posed the question of whether
the Legislature has mandated something that is impossible for people to comply with. She said she
has heard that about 30 percent of those involved in accidents do not have insurance. Ms. Hayden
said that MVD has placed the number at around seven percent in the past. She opined that the figure
is around 25 percent.
HOUSE INTERIM STUDY COMMITTEE ON
PRIVATE PASSENGER AUTOMOBILE INSURANCE
4 101 16/ 96
Don Isaacson. representin? State Farm Insurance Company, voiced agreement with positions stated
by other speakers. He said that legal fees, physician fees, hospital fees, cost of cars and the cost of
car repairs comprise the cost of auto insurance. If any one of these single components goes up, the
total cost of auto insurance also rises. Any effective inquiry of where costs are coming from and
where efforts can be directed to reduce costs has to look at each of the components.
Mr. Isaacson reiterated that the Legislature has passed various laws over the past years that have
been helpful, such as: legislation on the fraud unit; Auto Theft Prevention Authority; driver's
education and re- examining the licensing of youthful drivers; roadway safety and traffk engineering;
and transfer and nonrenewal of the very worst drivers. He noted that the laws are incremental, so
there has been no time for experience.
In response to Chairman Jarrett, Mr. Isaacson said that, generally, the industry is very supportive of
those types of legislation that get the worst drivers off the road.
Mr. Isaacson related that the American Association of Retired Persons ( AARP) has asked for
legislation that will give senior citizens a rate reduction if they take a driving course. He said he
does not support such legislation. He advised that the insurance companies also opposed legislation
supported by rental car agencies. If a rental car is involved in an accident, the rental car policy
covers first. Rental car agencies want a change so that the private driver's insurance covers first.
Although good for rental car agencies, this proposal is bad for private passenger policyholders.
Mr. Isaacson said that the industry is faced with a situation of more accidents than ever, more
fatalities, more claimed injuries, more attorney involvement, more personal injury claims, more
claimed soft- tissue injuries, higher medical and hospital fees, and higher auto repair costs. In
Arizona, 50 percent of accidents lead to bodily injury claims; the national average is 30 percent.
Ten years ago, Arizona was at 30 percent. The trend is that every time two vehicles hit, it leads to
a situation where an attorney is involved and a personal injury claim is made.
Mr. Isaacson advised that State Farm Insurance Company has historically opposed mandatory
insurance. The company does not believe that people should be mandated to buy any product as
opposed to buying food or anything else.
Mr. Isaacson discussed the six parts of an automobile insurance policy: bodily injury,
comprehensive, collision, med pay, uninsured motorist, and underinsured motorist. Comprehensive
coverage comprises about 10 percent of the cost of the policy. Bodily injury represents half of the
cost of the policy and, of that percentage, half goes to attorneys.
Mr. Isaacson concluded by commenting on profit. He stated that half of the companies writing auto
insurance are called mutual or reciprocal companies, which means there are no stockholders and they
are owned by their policyholders. State Farm is one of those companies. The actual money that is
collected after investment beyond claims costs is approximately two percent for State Farm. He
stated that this is not a grossly profitable business as perceived.
HOUSE INTERIM STUDY COMMllTEE ON
PRIVATE PASSENGER AUTOMOBILE INSURANCE
5 10/ 16/ 96
In response to Chairman Jarrett's question on attorney costs, Mr. Isaacson answered that the figure
cited is total cost.
Mike Low. representing Allstate Insurance and American Familv Insurance, testified that fraud is
a real problem. It is estimated that every household pays $ 200 per year in insurance premiums that
relate to insurance fraud. He said it is projected that insurance fraud in the United States is a $ 20
billion problem. He opined that a real strong anti- fraud law can accomplish something and have a
positive effect.
Chairman Jarrett mentioned that she has been contacted by law enforcement from Orange County,
California, who expressed interest in working closely with Arizona to address this problem. She
asked Mr. Low to work with her.
Chairman Jarrett informed Members that the next meeting will be scheduled in two or three weeks.
Without objection, the meeting adjourned at 4: 35 p. m.
( Attachments and tape on file in the Office of the Chief Clerk.)
HOUSE INTERIM STUDY COMMITTEE ON
PRIVATE PASSENGER AUTOMOBILE INSURANCE
6 1 011 6/ 96
ARKZONA HOUSE OF REPWSEmATWS
Interim Meeting Notice
Open to the Public
HOUSE INTERIM STUDY COMMITTEE ON
PRIVATE PASSENGER AUTOMOBILE INSURANCE
DATE: Wednesday, November 13, 1 996
TIME: 1: 30 - 3: 30 p. m.
PLACE: House Hearing Room 2
AGENDA
1. Call to Order
2. Opening Remarks
3. Testimony from Guest Speakers
4. Discussion
5. Public Testimony
6. Set Time and Date for Next Meeting
7. Closing Remarks and Adjourn
Members:
Representative Marilyn Jarrett, Chairman
Representative Robert Blendu
Representative Scott Bundgaard
Representative Linda Aguirre
Representative Paul Newman
L/
** People with disabilities may request reasonable accommodations such as interpretere, alternative formats, or assistance + th
physical accessibility. If you require accommodations, please contact the Chief Clerk'a OHice at ( 602) 542- 3032.
ARIZONA HOUSE OF REPRESENTATIVES
Forty- second Legislature - Second Regular Session
HOUSE INTERIM STUDY COMMITTEE ON
PRIVATE PASSENGER AUTOMOBILE INSURANCE
Minutes of Meeting
Wednesday, November 1 3, 1 996
House Hearing Room 2 - 1 130 p. m
( Tape 1, Side A)
The meeting was called to order at 1 : 35 p. m. by Chairman Jarrett and attendance was noted by the
secretary.
Members Present
Ms. Aguirre
Mr. Blendu
Mr. Bundgaard
Mrs. Jarrett, Chairman
Members Absent
Mr. Newman ( excused)
Speakers Present
Dr. Jonathan Upchurch, representing himselfl, Arizona State University, Department of Civil and
Environmental Engineering
Sam Sorich, Assistant Vice President, National Association of Independent Insurers ( NAII),
Sacramento, California
Chris Herstam, representing Alliance of American Insurers
Mike Low, Attorney, representing Allstate Insurance Company; American Family Insurance
Company
Dr. Jonathan Upchurch, representing himselfl, Arizona State University, Department of Civil and
Environmental Engineering, related his background to the Members. He acknowledged that the
Committee was created to develop methods to reduce auto accidents in Arizona so that present high
rates for private passenger insurance can be reduced. He related statistics which indicate that a
significant amount of accidents occur in Arizona.
Dr. Upchurch identified the fact that left turns at signalized intersections in Arizona are of particular
interest to the Committee. He outlined the left turn systems in use:
a A circular green light which indicates that a driver wishing to turn left must
yield to oncoming traffic.
a A green arrow which indicates that a driver has the right of way with
oncoming traffic ( which has a red light).
a A combination of a circular green light and a green arrow
A green arrow after through traffic which is called a lagging green arrow.
A green arrow before through traffic which is called a leading green arrow.
He noted that the Cities of Tucson and Scottsdale use the lagging green arrow while all other
jurisdictions use the leading green arrow ( although in some circumstances, there may be an
exception).
Dr. Upchurch stated that several years ago, he conducted a study for the Arizona Department of
Transportation ( ADOT) to determine which method is safest. The study entailed a review of the
accident history at signalized intersections with different kinds of systems ( over 500 intersection
approaches). In terms of left turn accidents, he commented that a green arrow is safer than a circular
green light, i. e., there are fiom one- third to one- half as many left turn accidents at intersections with
a green arrow as there are at intersections with a circular green light. However, whether the green
arrow occurs before or after through traffic is a toss- up, and overall, one is not safer than the other.
In reviewing the combined green arrow with a circular green light, the safety experience is similar to
that of a circular green light. Therefore, the green arrow is safer than the other alternatives.
Dr. Upchurch added that the study also included a review of selected intersections in which the type
of signalization had been changed ( almost 200 intersection approaches). Reviewing leading versus
lagging left turns, in some situations, one is better than the other, but overall, one is not better than
the other. He pointed out that when a traffk engineer makes a decision as to what type of signal
should be used in an intersection, factors considered are the geometry of the intersection ( i. e., if there
is no left turn lane, it makes no sense to use a green arrow), overall operations, delay, efficiency at
the intersection, and the level of service that is needed.
He indicated that he made an attempt, within the last few days, to find out what percentage of
accidents in Arizona are related to left turns at intersections but he was unable to obtain the
information. He surmised that it is probably a relatively small number of total accidents, and
suggested that there are other contributing factors such as enforcement of laws dealing with Driving
Under the Influence ( DUI), seat belt usage, etc.
Sam Sorich, Assistant Vice President, National Association of Independent Insurers ( NAII),
Sacramento, CA, spoke in favor of a graduated driver licensing program for teenage drivers. He
related to the Members that according to National Safety Council accident facts, more than 40,000
Americans lost lives in accidents in 1994, and another 2.2 million received disabling injuries. The
National Highway Traffic Safety Administration reports that more than 12.8 million motor crashes
were reported in 1995. The Council estimates that the dollar value of accidents each year is
approximately $ 160 billion.
He contended that the segment of the driving population which overcontributes to these statistics is
the youthfU1 and novice drivers. Teenagers comprise five percent of the U. S. driving population but
are involved in fourteen percent of all motor vehicle deaths. More than 6,200 teenagers were killed
in motor vehicle crashes in 1995. He commented that the risk of fatal crashes for teenazess is highest
between the hours of 9: 00 p. m. and 6: 00 a. m.
Mr. Sorich related Arizona statistics ( Attachment 1). He contended that drivers in the age group of
16 and 17 are three times more likely to be involved in a fatal crash than someone in the age group
of 25 to 54. He said the Association recognizes that it has a social and economic responsibility to
take action to address these injuries because the overrepresentation of teenage drivers and crash
statistics contributes substantially to higher insurance premiums for families with teenage drivers. He
reviewed the remainder of the handout ( Attachment 1).
I- Ie related that in 1977, the Maryland Department of Motor Vehicles implemented and evaluated a
graduated licensing program. It prohibited the operation of a motor vehicle by drivers with a
provisional license between the hours of 1 : 00 a. m. and 6: 00 a. m. This resulted in a five percent
reduction in crashes and a ten percent reduction in traffic violations for 16- and 17- year- olds.
Graduated licensing programs have also been in effect in the Providence of Ontario and the State of
California with similar reductions in crashes and convictions.
Mr. Sorich said 13 states currently have curfews in place for drivers under the age of 18. The
effectiveness of curfew laws was recently evaluated in the States of New York ( 9: OO p. m. to 5.00
a. m.) and Pennsylvania ( midnight to 5100 a. m.). The Insurance Institute of Highway Safety studied
crash involvement for 16- year- olds during curfew and noncurfew hours for those two states and
compared the results with the States of Delaware and Connecticut which do not have graduated
licensing programs. During the curfew period, crash involvement rates for 16- year- old drivers was
65 percent lower in upstate New York and 54 percent lower in Pennsylvania than in Connecticut and
Delaware.
He indicated that the Members were provided with the following handouts: A Wall Street Journal
article entitled, " States Restrict Teen Drivers To Curb Deaths," ( Attachment 2); a chart showing
Arizona's disproportionate fatality involvement between ages -- 1994 ( Attachment 3); and a chart
showing the number of teenagers fatally injured in motor vehicle accidents in Arizona in 1994
( Attachment 4). He noted that the second chart was previously provided to the Members but the
number of teenagers fatally injured in accidents was incorrect - 104 is the correct number.
Mr. Blendu asked if the 104 teenagers were driving when these fatal accidents occurred. Mr. Sorich
replied that they were not always driving but could have been riding with an adult driver. Mr. Blendu
suggested restricting driving until the age of 18. Mr. Sorich speculated that society is not prepared
to restrict driving privileges but is willing to scrutinize the driving performance of young drivers. lie
clarified that the curfew laws in New York and Pennsylvania do not prohibit young drivers from
driving during curfew hours but requires that they be accompanied by an adult.
Mr. Blendu submitted that there are thousands of teenagers who do not cause any problems, and
those who abuse the driving privilege need to be punished. He indicated that members of Mothers
Against Drunk Drivers ( MADD) will testifi that the real culprits are DUI repeat offenders.
Mr. Sorich pointed out that the Members have been given a handout outlining a model bill developed
by NAII for the Committee to review and determine what may be appropriate for Arizona
( Attachment 5). He indicated that the provisions do not punish teenagers who are not violating the
law.
Mr. Blendu asked how much rates would decrease as a result of the proposed program. Mr. Sorich
speculated that the cost would be reduced but he does not know what the premium level would be.
He contended that if the number of vehicle accidents, injuries, and deaths is decreased, the cost of
insurance will be reduced as well. He indicated to Mr. Blendu that in response to questions about
high rates he would say perhaps it is because the person has a teenager in the house, and statistics
show that teenagers are involved in accidents at twice the rate of other people.
Mr. Blendu submitted that a monetary figure should be provided. Mr. Sorich responded that if
teenage drivers are better drivers, adults will be driving on streets with safer drivers which will lower
the cost of insurance substantially.
Mr. Sorich agreed to provide Mr. Bundgaard with a copy of the study conducted by the lnsurance
Institute of Highway Safety previously referred to. Mr. Bundgaard asked if there is documentation
showing a reduction in premiums due to the dramatic reduction in crash involvements in New York
and Pennyslvania. Mr. Sorich said the New York and Pennsylvania programs are three years old.
He said he can explain when the laws were enacted and what the level of premium growth or decrease
has been in those two states. He pointed out that this is only a segment of the solution but it will
reduce costs.
Mr. Bundgaard asked how the curfew will be enforced. Mr. Sorich answered that a police officer
suspecting that a young person is driving alone after hours would have the authority to stop thc
driver.
Mrs. Jarrett asked if implementation of this program would only decrease the rates of families with
teenage drivers. Mr. Sorich said the best hope would be to reduce rates for those families but
reiterated the fact that a general positive effect for everyone is that if younger drivers are safer,
everyone else will be safer.
Mrs. Jarrett asked Mr. Sorich if he favors mandatory auto insurance. Mr. Sorich answered that as
a representative of independent insurance companies, the Association is not in favor of mandatory
auto insurance.
Ms. A~ wirres poke in favor of mass transit as a partial solution to the problem. She surmised that the
driver education programs that will be needed for this proposal are not available. Mr. Blendu pointed
out that consideration should be given to women who are single parents with teenage boys who help
support the family. They may have to work very late on weekends and drive to and from work
because there are no alternative methods of transportation.
Mr. Bundgaard asked Mr. Sorich if he could determine how many of the 104 teenagers fatally injured
( Attachment 4) were driving. Mr. Sorich agreed to his request. Mrs. Jarrett speculated that the
concept of a provisional license would make obtaining a license a more sobering venture for
teenagers.
Chris Herstam, representing Alliance of American Insurers, stated that the Alliance is a trade
organization of 250 property and casualty insurance companies across the United States. As the
former Director of the Arizona Department of Insurance ( ADOI), he testified that the Department
took a neutral position on mandatory auto insurance. As the Director, he said he was often asked
why Arizona's insurance rates are so high, noting that Arizona had the 16th highest insurance rates
in the country. He submitted that the rates are so high because the accident rate in this state is the
14th highest in the nation, insurance fraud exists, and the traffic density in Arizona is one of the
highest in the country.
( Tape 1 , Side B)
Mr. Blendu submitted that mandatory auto insurance has not been effective, and the Legislature is
still unable to address the basic problem of how a single woman with two children can afford auto
insurance - and she cannot. He noted that the penalty for not having auto insurance has increased but
there are still many people driving around without it because they simply cannot afford it. He
contended that people who pay for auto insurance will always subsidize those who do not.
Mike Low, Attorney, representing Allstate Insurance Company; American Family Insurance
Company, advised the Committee that the insurance industry has been working closely with ADOI
in an attempt to strengthen Arizona's anti- fraud law because it is one of the weakest in the country.
He related that current estimates are that fraud represents twenty cents of every premium dollar.
Arizona is experiencing a much more aggressive type of insurance fraud, such as staged accidents and
rings involving chiropractors, lawyers, and physicians perpetrating fraudulent schemes. I- Ie explained
that the State of California passed legislation aimed at insurance fraud two years ago, and now con
artists are moving to Arizona.
Mr. Low expressed a concern that unless this problem is addressed, rates will substantially increase.
He said the group has not yet developed a finished work product but the intent is to develop some
definitions and address problems with individuals who hire people to participate in fraudulent
schemes. He anticipated that a draft will be available in about two weeks and expressed a hope that
the Legislature will be responsive this next legislative session.
Mrs. Janett related that she received a phone call from a police officer in Orange County, California
regarding auto theft problems. He expressed a concern that cars are being brought to Arizona from
California. He said he also received a call from Oahu, Hawaii about the fact that auto theft rates have
increased greatly in Hawaii, and it is thought that cars are being shipped to California. She invited
Mr. Low to participate in drafting of legislation, and added that another meeting will be held.
Ms. Aguirre stated that sometimes an innocent driver may be accused of fraud. She related the fact
that she was injured in an accident and felt victimized for a time period. Mr. Low clarified that Ms.
Aguirre is referring to adjustment of a claim in an individual setting whereas he is addressing incidents
where it can be demonstrably shown that an itemization of losses was made by a person who did not
own the items or had turned them in as a prior loss. Mr. Blendu suggested that the Con~ nlitteeb e
cognizant of the difference while developing legislation.
Without objection, the meeting adjourned at 2: 40 p. m.
( Original minutes, attachments, and tape are on file in the Office of the Chief Clerk)
LA- y. .
AlRIZONA HOUSE OF REPRESEWATmS
Interim Meeting Notice I
Open to the Public
HOUSE INTERIM STUDY COMMITTEE ON
PRIVATE PASSEWGER AUTOMOBILE INSURANCE
DATE: Thursday, December 5, 1996
TIME: 2: 30 p. m.
PLACE: House Hearing Room 2
1. Call to Order
2. Opening Remarks
3. Testimony
-- John King, Arizona Department of Insurance
-- Bob Chambers, California's recent experience with
legislation and insurance fraud
4. Discussion
5. Public Testimony
6. Adjourn
Members:
Representative Marilyn Jarrett, Chairman
Representative Robert Blendu
Representative Scott Bundgaard
Representative Linda Aguirre
Representative Paul Newman
V
** People with disabilities may request reasonable accommodations such as interpreters, alternative formats, or assistance with
accessibility. If you require accommodations, contact the Chief Clerk's Office at ( 602) 542- 3032.
Pf'"' 9TES RECEIVED
C - 1 - .'! E;;,', S CFFlCE
/ a-/ s- 9 6
ARIZONA HOUSE OF REPRESENTATIVES
Forty- second Legislature - Second Regular Session
HOUSE INTERIM STUDY COMMITTEE ON
PRIVATE PASSENGER AUTOMOBILE INSURANCE
Minutes of Meeting
Thursday, December 5, 1996
House Hearing Room 2 - 2: 30 p. m.
TAPE 1, SIDE A
Chairman Jarrett called the meeting to order at 2: 35 p. m. and the attendance was noted.
Members Present
Ms. Aguirre
Mr. Blendu
Mrs. Jarrett, Chairman
Members Absent
Mr. Bundgaard ( excused) Mr. Newman ( excused)
Speakers Present
John King, Arizona Department of Insurance ( DOI)
Bob Chambers, Regional Manager, PropertyICasualty, National Insurance Crime Bureau ( NICB)
Lanny Hair, representing Independent Insurance Agents and Brokers of Arizona
Chairman Jarrett announced that this is the last meeting that will be held to hear testimony. She
noted that information will continue to be gathered in order to try to do something to reduce the cost
of insurance. She thanked everyone who has participated in this process.
John King. Arizona Department of Insurance ( DOI), briefly discussed the problem of fraud and the
history of the DO1 fraud unit. Nationwide, it is estimated that insurance fraud costs the American
consumer $ 100 billion a year. It has also been estimated that one out of every ten claims filed with
an insurance company is fraudulent. Insurance fraud costs the average consumer in the United States
about $ 200- 300 per year. As a result of the seriousness of the problem, 28 fraud units have been
established across the country for the sole purpose of fighting fiaud. In 1994, Arizona established
its fraud unit within the Department of Insurance. The unit is fbnded by an assessment of $ 450 per
insurance company.
HOUSE INTERIM STUDY COMMITTEE ON
PRIVATE PASSENGER AUTOMOBILE INSURANCE
12/ 5/ 96
Mr. King reviewed legislation that DO1 will introduce to make prosecuting insurance fraud easier
( Attachment 1). The major provisions of the bill include: gives police officer status to investigators
in the unit; provides for a capper law; and authorizes DO1 to relate cases of fiaud by health care
individuals, organizations or attorneys to a licensing agency. He related that insurance companies
are in support of this bill.
Chairman Jarrett inquired whether this draft legislation has been patterned after legislation passed
in California. Mr. King replied in the affirmative. In response to Chairman Jarrett, he answered that
California's legislation grants police officer status to investigators. One reason for requesting police
officer status is that although the unit works well with law enforcement, it is sometimes difficult to
get information because the investigators do not have police officer status. To attain police officer
status, investigators will have to be certified by the Arizona Police Officer Standards and Training
Board.
Representative Blendu expressed concern about possible abuse of this authority on the ordinary
citizen. He asked whether there is any provision in the bill that protects the public and whether an
ordinary citizen has any recourse against abuse under the proposed legislation. Mr. King replied that
as in any complaint against a police officer, the recourse is to file a complaint against the officer.
Representative Blendu queried whether everyone in the fraud unit will have to have this authority.
Mr. King answered in the negative. He added that since retired police officers will most likely be
hired, he does not believe there will be abuse by police officers.
Representative Aguirre questioned the need to have police officer status since there is a policy
already in place which allows access to records. She asked what kind of training will be required
for investigators. Mr. King replied that regular police officer training will be given. He said that
the problem now is that investigators have to refer the case to law enforcement in order for an arrest
to be made. Because of other cases, the information may not be acted upon immediately and arrest
is delayed. If the DOI's fraud unit investigators are given police officer status, they can act in a
more timely manner, thus avoiding delays.
Chairman Jarrett noted that approximately one- third of all cars in Arizona are not insured. She asked
if the Department of Insurance can help in this matter. Mr. King stated that the Department regulates
insurance companies, not insurance consumers.
In response to Chairman Jarrett, Mr. King advised that he will provide Department records relating
to the number of people in Arizona who are insured.
Chairman Jarrett commented that it is evident there is a big problem in Arizona because
approximately one- third of the people are not following the law that mandates auto insurance.
Bob Chambers. Regional Manager. Property/ Casualtv. National Insurance Crime Bureau CNICB),
testified that NICB is a national organization fhded by the property and casualty insurance industry.
He distributed a handout outlining the problem, statistics and solution to combating insurance crime
HOUSE INTERIM STUDY COMMITTEE ON
PRIVATE PASSENGER AUTOMOBILE INSURANCE
2 12/ 5/ 96
( Attachment 2). NICB investigates cases of insurance fraud and vehicle theft, and maintains a
database of fraudulent claims. Last year, 54,000 suspicious claims were received. Of that number,
approximately 1,000 were from Arizona. Based on analysis and investigations, the two major areas
of fraud in Arizona are from staged accidents and caused accidents ( swoop and squat). The average
household pays about $ 200 annually in additional premiums because of fraud.
Mr. Chambers advised that as a result of passage of stronger legislation in California, there has been
a 2.8 percent decrease in auto insurance costs.
Mr. Chambers stated that NICB supports the passage of strong laws to combat this problem. It also
supports peace officer status for investigators.
Chairman Jarrett asked Mr. Chambers if he believes the proposed legislation ( Attachment 1) will
take care of Arizona's fraud problem. Mr. Chambers answered that the draft legislation appears to
be well- written. He opined that it could be strengthened in the professional responsibility area to
follow the California example.
Lannv Hair. re~ resentingIn dependent Insurance Agents and Brokers of Arizona, stated that he is
supportive of the issues discussed. He said that his organization is always supportive of anything
that will reduce insurance costs. His topic of discussion relates to mandatory auto insurance. He
stated that the issue of mandatory auto insurance is incorrectly associated with cost. He advised that
the Association does not necessarily agree with the position of insurance companies on the subject
of mandatory insurance in that the Association supports mandatory auto insurance.
Mr. Hair distributed a paper on a statewide survey ( Attachment 3). The survey indicated that a large
majority of voters in Arizona support mandatory auto insurance. He maintained that mandatory auto
insurance is good public policy because it speaks to responsibility.
Mr. Hair referred to the DOI's third annual report on motor liability ( Attachment 4). The report
provides information on what makes insurance premiums expensive and shows where premium
dollars go. The report indicates that Arizona is 15th in the nation among average insurance costs.
Mr. Hair brought up the question of whether mandatory automobile insurance is working. He
suggested that it is not. He advised that it is not as effective as it should be because recent revisions
relating to enforcement have been designed to be as noninvasive to the average person as possible.
Enforcement is based on a system of computer reporting by the insurance companies to the
Department of Motor Vehicles. He stated that the system of monitoring who is insured and who is
driving uninsured is not working well and that enforcement is not good.
Representative Blendu commented that he has found the premise to be untrue that as penalties for
not having auto insurance coverage are increased, people will comply.
Representative Blendu emphatically stated that if auto insurance is mandated, the cost to everyone
must be considered.
HOUSE INTERIM STUDY COMMITTEE ON
PRIVATE PASSENGER AUTOMOBILE INSURANCE
3 12/ 5/ 96
Chairman Jarrett announced that after copies of the minutes of the meetings are distributed to
Members and an outline is prepared by staff, Members will get together to discuss recommendations
for the final report. She also solicited any comments or suggestions from members of the audience
and said those recommendations would be considered by the Committee in its deliberations.
Without objection, the meeting adjourned at 3: 30 p. m.
- iF'P,&+. q . Lq9 <
* nne Bell, Cobittee Secretary
( Attachments and tape on file in the Office of the Chief Clerk.)
HOUSE INTERIM STUDY COMMITTEE ON
PRIVATE PASSENGER AUTOMOBILE INSURANCE
4 12/ 5/ 96
IV. COMMITTEE RECOMMENDATION
The House Interim Study Committee on Private Passenger Automobile Insurance chose
to make no formal recommendation with regard to proposed legislation. However,
Chairman Jarrett, did indicate her desire to inquire into the efficacy of mandatory
automobile insurance with the formation of an additional interim committee during the
1997 interim.

Description

Rating
TITLE	House Interim Study Committee on Private Passenger Automobile Insurance: final report
CREATOR	Arizona. Legislatue. House Interim Study Committee on Private Passenger Automobile Insurance.
SUBJECT	Legislative Study Committee--Arizona; Insurance, Automobile--Arizona.
Browse Topic	Government and politics Business and industry
DESCRIPTION	25 pages (PDF version). File size: 1216.367 KB.
Language	English
Publisher	Arizona. Legislature. House Interim Study Committee on Private Passenger Automobile Insurance.
TYPE	Text
Material Collection	State Documents House Received Reports Legislative Study Committee Reports
Acquisition Note	Publication or link to publication sent to reports@lib.az.us
RIGHTS MANAGEMENT	Copyright to this resource is held by the creating agency and is provided here for educational purposes only. It may not be downloaded, reproduced or distributed in any format without written permission of the creating agency. Any attempt to circumvent the access controls placed on this file is a violation of United States and international copyright laws, and is subject to criminal prosecution.
DATE ORIGINAL	1996-12-15
Time Period	1990s (1990-1999)
ORIGINAL FORMAT	Paper
Source Identifier	LG 3.2:A 87/F
Location	247482829
DIGITAL IDENTIFIER	RMDHOUSE_HISCPPI_FR_DEC_15_1996.pdf
DIGITAL FORMAT	PDF (Portable Document Format)
DIGITIZATION SPECIFICATIONS	Digitized into PDF form through scanning at the Records Management Division, Arizona State Library.
REPOSITORY	Arizona State Library. Archives and Public Records--Law and Research Library.
File Size	1216.367 KB
Full Text	House Interim Study Committee on Private Passenger Automobile Insurance FINAL REPORT December 15, 1996 MEMBERS Representative Maril! n Jarrett, Chairman Representative Robert Blendu Representative Scott Bundgaard Representative Linda Aguirre Representative Paul Netman TABLE OF CONTENTS Page AUTHORITY AND SCOPE OF DUTIES . . . . . . . . . . . . . . . . . 2 COMMITTEE ACTIVITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 COMMITTEE AGENDAS AND MINUTES . . . . . . . . . . . . . . . 4 COMMITTEE RECOMMENDATION . . . . . . . . . . . . . . . . . . .2 5 I. AT JTHORITY AND SCOPE OF DUTIES The House Interim Study Committee on Private Passenger Automobile Insurance was created on September 19, 1996 by the Speaker of the Arizona House of Representatives Mark Killian. The Committee was charged with studying: 1. The availability, affordability and accessability of private passenger automobile insurance in this state, and; 2. The escalation of private passenger automobile insurance premiums. 11. COMMITTEE ACTIVITY The House Interim Study Committee on Private Passenger Automobile Insurance held hearings on the following three dates: October 16, 1996; November 13, 1996, and; December 5, 1996. 111. COMMITTEE AGENDAS AND MINUTES lnierim Meetine Notice Open to the Public HOUSE INTERIM STUDY COMMITTEE ON PRIVATE PASSENGER AUTOMOBILE INSURANCE DATE: Wednesday, October 16, 1996 TIME: 3: 00 - 5: 00 p. m. PLACE: House Hearing Room 3 AGENDA 1. Call to Order 2. Opening Remarks 3. Goals of the Committee: a Discussion on the availability, affordability and accessibility of private passenger automobile insurance b. Discussion of the reasons underlying the escalation of automobile insurance premiums 4. Public testimony 5. Closing remarks and set time/ date for next meeting -. 6. Adjourn Menrbers: Representative Marilyn Jarrett, Chairman Representative Robert Blendu Representative Scott Bundgaard Representative Linda Aguirre Representative Paul Newman People with & abilities may request reasonable accommodations such as interpreters, alternative formats, or assistance with \ I physical accessibility. If you require accommodations, contact the Chief Clerk's Office at ( 602) 542- 3032. C~~ rP", e~ e, veb ARIZONA HOUSE OF REPRESENTATIVES '= h, c,, n Forty- second Legislature - Second Regular Session 0cr3 " 4 ~ ~ 1996 HOUSE INTERIM STUDY COMMITTEE ON PRIVATE PASSENGER AUTOMOBILE INSURANCE Minutes of Meeting Wednesday, October 16, 1996 House Hearing Room 3 - 3 : 00 p. m. TAPE 1, SIDE A Chairman Jarrett called the meeting to order at 3: 10 p. m. and the attendance was noted. Members Present Ms. Aguirre Mr. Blendu Mr. Bundgaard Mrs. Jarrett, Chairman Members Absent Mr. Newman ( excused) Jim Drake, Majority Research Analyst David Childers, representing Farmers Insurance Group and National Association of Independent Insurers Kerry Hayden, Legislative Representative, Farmers Insurance Group Don Isaacson, representing State Farm Insurance Company Mike Low, representing Allstate Insurance and American Family Insurance Chairman Jarrett stated that the purpose of this Committee is to address concerns raised by constituents about the continued rise of insurance rates. Jim Drake. Majority Research Analvst, distributed the following material: -- Publication by National Association of Insurance Commissioners ( NAIC), " State Average Expenditures & Premiums for Personal Automobile Insurance in 1994" which shows where Arizona is in relation to other states on expenditures, premiums, trends, etc. ( Attachment 1). HOUSE INTERIM STUDY COMMITTEE ON PRIVATE PASSENGER AUTOMOBILE INSURANCE 1011 6196 -- Letter from the Arizona Insurance Information Association dated October 16,1995 providing information on claiming behavior cited at a recent conference ( Attachment 2). -- Information on accident rates in Arizona and auto insurance costs provided by the Arizona Insurance Information Association ( Attachment 3). Ms. Aguirre queried whether there is a direct correlation between the number of accidents and the number of autos. Mr. Drake replied in the affirmative. He said there is some statistical support to show that although accident rates are down nationwide, they are up in Arizona. Ms. Aguirre asked if there is a correlation between accidents and some of the safety issues that have been put into place, such as speed limits, harnesses, air bags, etc.. Mr. Drake answered that is one of the things the Committee will look into. David Childers. representing Farmers Insurance Grow and National Association of Independent Insurers, testified that there is concern about why automobile insurance premiums are not decreasing despite legislation designed to address those rates. He reviewed some laws supported by industry that have been passed over the last few years: mandatory seat belt law; private passenger noncancellation or nonrenewal statute; fraud legislation; auto theft authority legislation; and optional uninsured motorist coverage. He related that total accident costs are made up of a combination of frequency of accidents and severity of accidents. Chairman Jarrett said that it is acknowledged that seat belts prevent some serious injuries. She raised the issue of " soft tissue" injuries and asked whether such injuries are increased by the use of seat belts. Ms. Aguirre asked for the cause of the increase in accidents and the contributing factors. Mr. Childers responded that the increase is attributed to the increase in traffic. He said that most of the accidents take place in urban areas. Discussion about duplicative light signals is one proposal submitted to address the rise in traffic accidents. Another proposal discussed is a change in the left-hand turn signals. Statistics suggest that photo radar also has an impact on traffic accidents. He maintained that photo radar would have a positive impact. Mr. Blendu questioned the numbers reported in the handouts which have been prepared by the insurance industry. He stated that as policy makers, Legislators have to determine the path to take to resolve the problem. He said he does not see anything positive happening. Mr. Drake advised that he will contact the Motor Vehicle Department ( MVD) to see if their numbers correlate with the statistics in the handouts. Mr. Blendu noted that there may be discrepancies of what is being classified as an accident. HOUSE INTERIM STUDY COMMIITEE ON PRIVATE PASSENGER AUTOMOBILE INSURANCE 2 1 01 16/ 96 Mr. Childers stated the numbers the insurance companies are providing are accurate and authentic. He acknowledged that there may be differences in how reporting organizations are counting accidents. He said he will work with Mr. Drake to look into this matter. Mr. Drake advised that MVD has a traffic study branch that compiles reportable accidents. Mr. Blendu maintained that if the Legislature is going to mandate insurance, it should be able to explain how it can be afforded. He emphasized that the Legislature has to address this issue. Mr. Childers commented that the auto insurance industry is not unanimous in support of mandatory auto insurance. Chairman Jarrett questioned where mandatory auto insurance comes from if not from the industry. Mr. Childers replied that he does not know who the proponents were. He related that the insurance industry is comprised of two distinct proponents: those who want mandatory auto insurance and those who do not. He said it is not an easy public policy. Mr. Childers pointed out that the rising cost of insurance is affected by many factors, such as the cost of replacing an automobile, cost of parts and repairs, cost of medical bills, etc. Inflation has played a major role in the increased cost. Part of the problem is that claims are generally arbitrated. Even though damage claims have gone down, personal injury claims have risen. Chairman Jarrett asked if there is any way insurance companies can arbitrate claims without bringing in attorneys as a means of reducing costs. Mr. Childers replied that the insurance industry is tight with its legal dollars. He advised that the cost of arbitration is a problem recognized by insurance companies and one the industry is trying to deal with. Ms. Aguirre submitted that in addressing this issue, other matters could be explored, such as road conditions, timing of lights, left- hand turns, where accidents occur, etc. She strongly suggested that there is the need to look at what is preventative rather than placing emphasis on after an accident occurs. Mr. Childers advised that the National Association of Independent Insurers ( NAII) supports the idea of provisional licensing. He revealed that legislation will be proposed in the upcoming session that will deal with this issue. He noted that a very high percentage of accidents across the age groups are the result of the 16- 18 year- old drivers. Provisional licensing is the issuance of a qualified license which would have some restrictions, such as: compliance with zero tolerance with respect to alcohol or drugs; no citations or at- fault accidents; and being accompanied by someone over the age of 21 when driving after midnight. If the requirements are complied with for a two- year period, a full license would be issued. Chairman Jarrett remarked that provisional licensing is an interesting point of view. She asked whether it will lower insurance rates. She said it would take some of those teens off the road if they were involved in an accident. Mr. Childers said that if a teen drives after he has an accident, the teen HOUSE INTERIM STUDY COMMITTEE ON PRIVATE PASSENGER AUTOMOBILE INSURANCE 3 10/ 16/ 96 will be driving without a license. He advised that he will contact the NAII to see if they have any statistical information on the subject. In response to Ms. Aguine, Mr. Childers said that he does not know if this will mean lower rates for teens if they are good drivers. He opined that this would be a move in the right direction. He said it is a serious proposal by NAII. Chairman Jarrett asked if a successful auto theft program will result in lower premiums. She noted that a significant amount of money is being spent for replacement or for repair of stolen cars. Mr. Childers responded that if experience in other states is an indicator, it will have a positive impact. Kerry Havden. Legislative Representative. Farmers Insurance Group, referred to the Chairman's question on seat belts and injuries. She clarified that seat belts prevent serious injuries, such as being thrown into the windshield, but are not the cause of more " soft tissue" injuries. In answer to Chairman Jarrett who referred to questions posed by Ms. Aguirre on the cause of accidents, Ms. Hayden related that the leading cause of accidents is one car rear- ending another car. The second leading cause of accidents is attributed to left- hand turns. Ms. Aguirre stated that she would like the two- second delay issue addressed. She also raised the issue of auto manufacturers removing passenger- side air bags. Ms. Hayden advised that the industry is divided on this issue. She said the force of an air bag deploying can cause severe problems. When an air bag explodes, it can cause burns and permanent scarring. In addition, air bags cost $ 1,500 each to replace when deployed. Because of the high cost of air bags, theft is becoming a new industry. Mr. Blendu wondered why the industry is not better at providing service. Ms. Hayden stated that Farmers is working on improving its service. TAPE 1, SIDE B In response to Chairman Jarrett's inquiry as to whether mandatory auto insurance has increased or decreased rates, Ms. Hayden stated that Farmers does not support mandatory insurance. She said many factors go into computing rates. She said she cannot answer the question of whether it helps or hurts rates. Chairman Jarrett raised the issue that many people cannot afford auto insurance, and that they have to decide whether to buy insurance or buy food for their family. She posed the question of whether the Legislature has mandated something that is impossible for people to comply with. She said she has heard that about 30 percent of those involved in accidents do not have insurance. Ms. Hayden said that MVD has placed the number at around seven percent in the past. She opined that the figure is around 25 percent. HOUSE INTERIM STUDY COMMITTEE ON PRIVATE PASSENGER AUTOMOBILE INSURANCE 4 101 16/ 96 Don Isaacson. representin? State Farm Insurance Company, voiced agreement with positions stated by other speakers. He said that legal fees, physician fees, hospital fees, cost of cars and the cost of car repairs comprise the cost of auto insurance. If any one of these single components goes up, the total cost of auto insurance also rises. Any effective inquiry of where costs are coming from and where efforts can be directed to reduce costs has to look at each of the components. Mr. Isaacson reiterated that the Legislature has passed various laws over the past years that have been helpful, such as: legislation on the fraud unit; Auto Theft Prevention Authority; driver's education and re- examining the licensing of youthful drivers; roadway safety and traffk engineering; and transfer and nonrenewal of the very worst drivers. He noted that the laws are incremental, so there has been no time for experience. In response to Chairman Jarrett, Mr. Isaacson said that, generally, the industry is very supportive of those types of legislation that get the worst drivers off the road. Mr. Isaacson related that the American Association of Retired Persons ( AARP) has asked for legislation that will give senior citizens a rate reduction if they take a driving course. He said he does not support such legislation. He advised that the insurance companies also opposed legislation supported by rental car agencies. If a rental car is involved in an accident, the rental car policy covers first. Rental car agencies want a change so that the private driver's insurance covers first. Although good for rental car agencies, this proposal is bad for private passenger policyholders. Mr. Isaacson said that the industry is faced with a situation of more accidents than ever, more fatalities, more claimed injuries, more attorney involvement, more personal injury claims, more claimed soft- tissue injuries, higher medical and hospital fees, and higher auto repair costs. In Arizona, 50 percent of accidents lead to bodily injury claims; the national average is 30 percent. Ten years ago, Arizona was at 30 percent. The trend is that every time two vehicles hit, it leads to a situation where an attorney is involved and a personal injury claim is made. Mr. Isaacson advised that State Farm Insurance Company has historically opposed mandatory insurance. The company does not believe that people should be mandated to buy any product as opposed to buying food or anything else. Mr. Isaacson discussed the six parts of an automobile insurance policy: bodily injury, comprehensive, collision, med pay, uninsured motorist, and underinsured motorist. Comprehensive coverage comprises about 10 percent of the cost of the policy. Bodily injury represents half of the cost of the policy and, of that percentage, half goes to attorneys. Mr. Isaacson concluded by commenting on profit. He stated that half of the companies writing auto insurance are called mutual or reciprocal companies, which means there are no stockholders and they are owned by their policyholders. State Farm is one of those companies. The actual money that is collected after investment beyond claims costs is approximately two percent for State Farm. He stated that this is not a grossly profitable business as perceived. HOUSE INTERIM STUDY COMMllTEE ON PRIVATE PASSENGER AUTOMOBILE INSURANCE 5 10/ 16/ 96 In response to Chairman Jarrett's question on attorney costs, Mr. Isaacson answered that the figure cited is total cost. Mike Low. representing Allstate Insurance and American Familv Insurance, testified that fraud is a real problem. It is estimated that every household pays $ 200 per year in insurance premiums that relate to insurance fraud. He said it is projected that insurance fraud in the United States is a $ 20 billion problem. He opined that a real strong anti- fraud law can accomplish something and have a positive effect. Chairman Jarrett mentioned that she has been contacted by law enforcement from Orange County, California, who expressed interest in working closely with Arizona to address this problem. She asked Mr. Low to work with her. Chairman Jarrett informed Members that the next meeting will be scheduled in two or three weeks. Without objection, the meeting adjourned at 4: 35 p. m. ( Attachments and tape on file in the Office of the Chief Clerk.) HOUSE INTERIM STUDY COMMITTEE ON PRIVATE PASSENGER AUTOMOBILE INSURANCE 6 1 011 6/ 96 ARKZONA HOUSE OF REPWSEmATWS Interim Meeting Notice Open to the Public HOUSE INTERIM STUDY COMMITTEE ON PRIVATE PASSENGER AUTOMOBILE INSURANCE DATE: Wednesday, November 13, 1 996 TIME: 1: 30 - 3: 30 p. m. PLACE: House Hearing Room 2 AGENDA 1. Call to Order 2. Opening Remarks 3. Testimony from Guest Speakers 4. Discussion 5. Public Testimony 6. Set Time and Date for Next Meeting 7. Closing Remarks and Adjourn Members: Representative Marilyn Jarrett, Chairman Representative Robert Blendu Representative Scott Bundgaard Representative Linda Aguirre Representative Paul Newman L/ People with disabilities may request reasonable accommodations such as interpretere, alternative formats, or assistance + th physical accessibility. If you require accommodations, please contact the Chief Clerk'a OHice at ( 602) 542- 3032. ARIZONA HOUSE OF REPRESENTATIVES Forty- second Legislature - Second Regular Session HOUSE INTERIM STUDY COMMITTEE ON PRIVATE PASSENGER AUTOMOBILE INSURANCE Minutes of Meeting Wednesday, November 1 3, 1 996 House Hearing Room 2 - 1 130 p. m ( Tape 1, Side A) The meeting was called to order at 1 : 35 p. m. by Chairman Jarrett and attendance was noted by the secretary. Members Present Ms. Aguirre Mr. Blendu Mr. Bundgaard Mrs. Jarrett, Chairman Members Absent Mr. Newman ( excused) Speakers Present Dr. Jonathan Upchurch, representing himselfl, Arizona State University, Department of Civil and Environmental Engineering Sam Sorich, Assistant Vice President, National Association of Independent Insurers ( NAII), Sacramento, California Chris Herstam, representing Alliance of American Insurers Mike Low, Attorney, representing Allstate Insurance Company; American Family Insurance Company Dr. Jonathan Upchurch, representing himselfl, Arizona State University, Department of Civil and Environmental Engineering, related his background to the Members. He acknowledged that the Committee was created to develop methods to reduce auto accidents in Arizona so that present high rates for private passenger insurance can be reduced. He related statistics which indicate that a significant amount of accidents occur in Arizona. Dr. Upchurch identified the fact that left turns at signalized intersections in Arizona are of particular interest to the Committee. He outlined the left turn systems in use: a A circular green light which indicates that a driver wishing to turn left must yield to oncoming traffic. a A green arrow which indicates that a driver has the right of way with oncoming traffic ( which has a red light). a A combination of a circular green light and a green arrow A green arrow after through traffic which is called a lagging green arrow. A green arrow before through traffic which is called a leading green arrow. He noted that the Cities of Tucson and Scottsdale use the lagging green arrow while all other jurisdictions use the leading green arrow ( although in some circumstances, there may be an exception). Dr. Upchurch stated that several years ago, he conducted a study for the Arizona Department of Transportation ( ADOT) to determine which method is safest. The study entailed a review of the accident history at signalized intersections with different kinds of systems ( over 500 intersection approaches). In terms of left turn accidents, he commented that a green arrow is safer than a circular green light, i. e., there are fiom one- third to one- half as many left turn accidents at intersections with a green arrow as there are at intersections with a circular green light. However, whether the green arrow occurs before or after through traffic is a toss- up, and overall, one is not safer than the other. In reviewing the combined green arrow with a circular green light, the safety experience is similar to that of a circular green light. Therefore, the green arrow is safer than the other alternatives. Dr. Upchurch added that the study also included a review of selected intersections in which the type of signalization had been changed ( almost 200 intersection approaches). Reviewing leading versus lagging left turns, in some situations, one is better than the other, but overall, one is not better than the other. He pointed out that when a traffk engineer makes a decision as to what type of signal should be used in an intersection, factors considered are the geometry of the intersection ( i. e., if there is no left turn lane, it makes no sense to use a green arrow), overall operations, delay, efficiency at the intersection, and the level of service that is needed. He indicated that he made an attempt, within the last few days, to find out what percentage of accidents in Arizona are related to left turns at intersections but he was unable to obtain the information. He surmised that it is probably a relatively small number of total accidents, and suggested that there are other contributing factors such as enforcement of laws dealing with Driving Under the Influence ( DUI), seat belt usage, etc. Sam Sorich, Assistant Vice President, National Association of Independent Insurers ( NAII), Sacramento, CA, spoke in favor of a graduated driver licensing program for teenage drivers. He related to the Members that according to National Safety Council accident facts, more than 40,000 Americans lost lives in accidents in 1994, and another 2.2 million received disabling injuries. The National Highway Traffic Safety Administration reports that more than 12.8 million motor crashes were reported in 1995. The Council estimates that the dollar value of accidents each year is approximately $ 160 billion. He contended that the segment of the driving population which overcontributes to these statistics is the youthfU1 and novice drivers. Teenagers comprise five percent of the U. S. driving population but are involved in fourteen percent of all motor vehicle deaths. More than 6,200 teenagers were killed in motor vehicle crashes in 1995. He commented that the risk of fatal crashes for teenazess is highest between the hours of 9: 00 p. m. and 6: 00 a. m. Mr. Sorich related Arizona statistics ( Attachment 1). He contended that drivers in the age group of 16 and 17 are three times more likely to be involved in a fatal crash than someone in the age group of 25 to 54. He said the Association recognizes that it has a social and economic responsibility to take action to address these injuries because the overrepresentation of teenage drivers and crash statistics contributes substantially to higher insurance premiums for families with teenage drivers. He reviewed the remainder of the handout ( Attachment 1). I- Ie related that in 1977, the Maryland Department of Motor Vehicles implemented and evaluated a graduated licensing program. It prohibited the operation of a motor vehicle by drivers with a provisional license between the hours of 1 : 00 a. m. and 6: 00 a. m. This resulted in a five percent reduction in crashes and a ten percent reduction in traffic violations for 16- and 17- year- olds. Graduated licensing programs have also been in effect in the Providence of Ontario and the State of California with similar reductions in crashes and convictions. Mr. Sorich said 13 states currently have curfews in place for drivers under the age of 18. The effectiveness of curfew laws was recently evaluated in the States of New York ( 9: OO p. m. to 5.00 a. m.) and Pennsylvania ( midnight to 5100 a. m.). The Insurance Institute of Highway Safety studied crash involvement for 16- year- olds during curfew and noncurfew hours for those two states and compared the results with the States of Delaware and Connecticut which do not have graduated licensing programs. During the curfew period, crash involvement rates for 16- year- old drivers was 65 percent lower in upstate New York and 54 percent lower in Pennsylvania than in Connecticut and Delaware. He indicated that the Members were provided with the following handouts: A Wall Street Journal article entitled, " States Restrict Teen Drivers To Curb Deaths" ( Attachment 2); a chart showing Arizona's disproportionate fatality involvement between ages -- 1994 ( Attachment 3); and a chart showing the number of teenagers fatally injured in motor vehicle accidents in Arizona in 1994 ( Attachment 4). He noted that the second chart was previously provided to the Members but the number of teenagers fatally injured in accidents was incorrect - 104 is the correct number. Mr. Blendu asked if the 104 teenagers were driving when these fatal accidents occurred. Mr. Sorich replied that they were not always driving but could have been riding with an adult driver. Mr. Blendu suggested restricting driving until the age of 18. Mr. Sorich speculated that society is not prepared to restrict driving privileges but is willing to scrutinize the driving performance of young drivers. lie clarified that the curfew laws in New York and Pennsylvania do not prohibit young drivers from driving during curfew hours but requires that they be accompanied by an adult. Mr. Blendu submitted that there are thousands of teenagers who do not cause any problems, and those who abuse the driving privilege need to be punished. He indicated that members of Mothers Against Drunk Drivers ( MADD) will testifi that the real culprits are DUI repeat offenders. Mr. Sorich pointed out that the Members have been given a handout outlining a model bill developed by NAII for the Committee to review and determine what may be appropriate for Arizona ( Attachment 5). He indicated that the provisions do not punish teenagers who are not violating the law. Mr. Blendu asked how much rates would decrease as a result of the proposed program. Mr. Sorich speculated that the cost would be reduced but he does not know what the premium level would be. He contended that if the number of vehicle accidents, injuries, and deaths is decreased, the cost of insurance will be reduced as well. He indicated to Mr. Blendu that in response to questions about high rates he would say perhaps it is because the person has a teenager in the house, and statistics show that teenagers are involved in accidents at twice the rate of other people. Mr. Blendu submitted that a monetary figure should be provided. Mr. Sorich responded that if teenage drivers are better drivers, adults will be driving on streets with safer drivers which will lower the cost of insurance substantially. Mr. Sorich agreed to provide Mr. Bundgaard with a copy of the study conducted by the lnsurance Institute of Highway Safety previously referred to. Mr. Bundgaard asked if there is documentation showing a reduction in premiums due to the dramatic reduction in crash involvements in New York and Pennyslvania. Mr. Sorich said the New York and Pennsylvania programs are three years old. He said he can explain when the laws were enacted and what the level of premium growth or decrease has been in those two states. He pointed out that this is only a segment of the solution but it will reduce costs. Mr. Bundgaard asked how the curfew will be enforced. Mr. Sorich answered that a police officer suspecting that a young person is driving alone after hours would have the authority to stop thc driver. Mrs. Jarrett asked if implementation of this program would only decrease the rates of families with teenage drivers. Mr. Sorich said the best hope would be to reduce rates for those families but reiterated the fact that a general positive effect for everyone is that if younger drivers are safer, everyone else will be safer. Mrs. Jarrett asked Mr. Sorich if he favors mandatory auto insurance. Mr. Sorich answered that as a representative of independent insurance companies, the Association is not in favor of mandatory auto insurance. Ms. A~ wirres poke in favor of mass transit as a partial solution to the problem. She surmised that the driver education programs that will be needed for this proposal are not available. Mr. Blendu pointed out that consideration should be given to women who are single parents with teenage boys who help support the family. They may have to work very late on weekends and drive to and from work because there are no alternative methods of transportation. Mr. Bundgaard asked Mr. Sorich if he could determine how many of the 104 teenagers fatally injured ( Attachment 4) were driving. Mr. Sorich agreed to his request. Mrs. Jarrett speculated that the concept of a provisional license would make obtaining a license a more sobering venture for teenagers. Chris Herstam, representing Alliance of American Insurers, stated that the Alliance is a trade organization of 250 property and casualty insurance companies across the United States. As the former Director of the Arizona Department of Insurance ( ADOI), he testified that the Department took a neutral position on mandatory auto insurance. As the Director, he said he was often asked why Arizona's insurance rates are so high, noting that Arizona had the 16th highest insurance rates in the country. He submitted that the rates are so high because the accident rate in this state is the 14th highest in the nation, insurance fraud exists, and the traffic density in Arizona is one of the highest in the country. ( Tape 1 , Side B) Mr. Blendu submitted that mandatory auto insurance has not been effective, and the Legislature is still unable to address the basic problem of how a single woman with two children can afford auto insurance - and she cannot. He noted that the penalty for not having auto insurance has increased but there are still many people driving around without it because they simply cannot afford it. He contended that people who pay for auto insurance will always subsidize those who do not. Mike Low, Attorney, representing Allstate Insurance Company; American Family Insurance Company, advised the Committee that the insurance industry has been working closely with ADOI in an attempt to strengthen Arizona's anti- fraud law because it is one of the weakest in the country. He related that current estimates are that fraud represents twenty cents of every premium dollar. Arizona is experiencing a much more aggressive type of insurance fraud, such as staged accidents and rings involving chiropractors, lawyers, and physicians perpetrating fraudulent schemes. I- Ie explained that the State of California passed legislation aimed at insurance fraud two years ago, and now con artists are moving to Arizona. Mr. Low expressed a concern that unless this problem is addressed, rates will substantially increase. He said the group has not yet developed a finished work product but the intent is to develop some definitions and address problems with individuals who hire people to participate in fraudulent schemes. He anticipated that a draft will be available in about two weeks and expressed a hope that the Legislature will be responsive this next legislative session. Mrs. Janett related that she received a phone call from a police officer in Orange County, California regarding auto theft problems. He expressed a concern that cars are being brought to Arizona from California. He said he also received a call from Oahu, Hawaii about the fact that auto theft rates have increased greatly in Hawaii, and it is thought that cars are being shipped to California. She invited Mr. Low to participate in drafting of legislation, and added that another meeting will be held. Ms. Aguirre stated that sometimes an innocent driver may be accused of fraud. She related the fact that she was injured in an accident and felt victimized for a time period. Mr. Low clarified that Ms. Aguirre is referring to adjustment of a claim in an individual setting whereas he is addressing incidents where it can be demonstrably shown that an itemization of losses was made by a person who did not own the items or had turned them in as a prior loss. Mr. Blendu suggested that the Con~ nlitteeb e cognizant of the difference while developing legislation. Without objection, the meeting adjourned at 2: 40 p. m. ( Original minutes, attachments, and tape are on file in the Office of the Chief Clerk) LA- y. . AlRIZONA HOUSE OF REPRESEWATmS Interim Meeting Notice I Open to the Public HOUSE INTERIM STUDY COMMITTEE ON PRIVATE PASSEWGER AUTOMOBILE INSURANCE DATE: Thursday, December 5, 1996 TIME: 2: 30 p. m. PLACE: House Hearing Room 2 1. Call to Order 2. Opening Remarks 3. Testimony -- John King, Arizona Department of Insurance -- Bob Chambers, California's recent experience with legislation and insurance fraud 4. Discussion 5. Public Testimony 6. Adjourn Members: Representative Marilyn Jarrett, Chairman Representative Robert Blendu Representative Scott Bundgaard Representative Linda Aguirre Representative Paul Newman V ** People with disabilities may request reasonable accommodations such as interpreters, alternative formats, or assistance with accessibility. If you require accommodations, contact the Chief Clerk's Office at ( 602) 542- 3032. Pf'"' 9TES RECEIVED C - 1 - .'! E;;,', S CFFlCE / a-/ s- 9 6 ARIZONA HOUSE OF REPRESENTATIVES Forty- second Legislature - Second Regular Session HOUSE INTERIM STUDY COMMITTEE ON PRIVATE PASSENGER AUTOMOBILE INSURANCE Minutes of Meeting Thursday, December 5, 1996 House Hearing Room 2 - 2: 30 p. m. TAPE 1, SIDE A Chairman Jarrett called the meeting to order at 2: 35 p. m. and the attendance was noted. Members Present Ms. Aguirre Mr. Blendu Mrs. Jarrett, Chairman Members Absent Mr. Bundgaard ( excused) Mr. Newman ( excused) Speakers Present John King, Arizona Department of Insurance ( DOI) Bob Chambers, Regional Manager, PropertyICasualty, National Insurance Crime Bureau ( NICB) Lanny Hair, representing Independent Insurance Agents and Brokers of Arizona Chairman Jarrett announced that this is the last meeting that will be held to hear testimony. She noted that information will continue to be gathered in order to try to do something to reduce the cost of insurance. She thanked everyone who has participated in this process. John King. Arizona Department of Insurance ( DOI), briefly discussed the problem of fraud and the history of the DO1 fraud unit. Nationwide, it is estimated that insurance fraud costs the American consumer $ 100 billion a year. It has also been estimated that one out of every ten claims filed with an insurance company is fraudulent. Insurance fraud costs the average consumer in the United States about $ 200- 300 per year. As a result of the seriousness of the problem, 28 fraud units have been established across the country for the sole purpose of fighting fiaud. In 1994, Arizona established its fraud unit within the Department of Insurance. The unit is fbnded by an assessment of $ 450 per insurance company. HOUSE INTERIM STUDY COMMITTEE ON PRIVATE PASSENGER AUTOMOBILE INSURANCE 12/ 5/ 96 Mr. King reviewed legislation that DO1 will introduce to make prosecuting insurance fraud easier ( Attachment 1). The major provisions of the bill include: gives police officer status to investigators in the unit; provides for a capper law; and authorizes DO1 to relate cases of fiaud by health care individuals, organizations or attorneys to a licensing agency. He related that insurance companies are in support of this bill. Chairman Jarrett inquired whether this draft legislation has been patterned after legislation passed in California. Mr. King replied in the affirmative. In response to Chairman Jarrett, he answered that California's legislation grants police officer status to investigators. One reason for requesting police officer status is that although the unit works well with law enforcement, it is sometimes difficult to get information because the investigators do not have police officer status. To attain police officer status, investigators will have to be certified by the Arizona Police Officer Standards and Training Board. Representative Blendu expressed concern about possible abuse of this authority on the ordinary citizen. He asked whether there is any provision in the bill that protects the public and whether an ordinary citizen has any recourse against abuse under the proposed legislation. Mr. King replied that as in any complaint against a police officer, the recourse is to file a complaint against the officer. Representative Blendu queried whether everyone in the fraud unit will have to have this authority. Mr. King answered in the negative. He added that since retired police officers will most likely be hired, he does not believe there will be abuse by police officers. Representative Aguirre questioned the need to have police officer status since there is a policy already in place which allows access to records. She asked what kind of training will be required for investigators. Mr. King replied that regular police officer training will be given. He said that the problem now is that investigators have to refer the case to law enforcement in order for an arrest to be made. Because of other cases, the information may not be acted upon immediately and arrest is delayed. If the DOI's fraud unit investigators are given police officer status, they can act in a more timely manner, thus avoiding delays. Chairman Jarrett noted that approximately one- third of all cars in Arizona are not insured. She asked if the Department of Insurance can help in this matter. Mr. King stated that the Department regulates insurance companies, not insurance consumers. In response to Chairman Jarrett, Mr. King advised that he will provide Department records relating to the number of people in Arizona who are insured. Chairman Jarrett commented that it is evident there is a big problem in Arizona because approximately one- third of the people are not following the law that mandates auto insurance. Bob Chambers. Regional Manager. Property/ Casualtv. National Insurance Crime Bureau CNICB), testified that NICB is a national organization fhded by the property and casualty insurance industry. He distributed a handout outlining the problem, statistics and solution to combating insurance crime HOUSE INTERIM STUDY COMMITTEE ON PRIVATE PASSENGER AUTOMOBILE INSURANCE 2 12/ 5/ 96 ( Attachment 2). NICB investigates cases of insurance fraud and vehicle theft, and maintains a database of fraudulent claims. Last year, 54,000 suspicious claims were received. Of that number, approximately 1,000 were from Arizona. Based on analysis and investigations, the two major areas of fraud in Arizona are from staged accidents and caused accidents ( swoop and squat). The average household pays about $ 200 annually in additional premiums because of fraud. Mr. Chambers advised that as a result of passage of stronger legislation in California, there has been a 2.8 percent decrease in auto insurance costs. Mr. Chambers stated that NICB supports the passage of strong laws to combat this problem. It also supports peace officer status for investigators. Chairman Jarrett asked Mr. Chambers if he believes the proposed legislation ( Attachment 1) will take care of Arizona's fraud problem. Mr. Chambers answered that the draft legislation appears to be well- written. He opined that it could be strengthened in the professional responsibility area to follow the California example. Lannv Hair. re~ resentingIn dependent Insurance Agents and Brokers of Arizona, stated that he is supportive of the issues discussed. He said that his organization is always supportive of anything that will reduce insurance costs. His topic of discussion relates to mandatory auto insurance. He stated that the issue of mandatory auto insurance is incorrectly associated with cost. He advised that the Association does not necessarily agree with the position of insurance companies on the subject of mandatory insurance in that the Association supports mandatory auto insurance. Mr. Hair distributed a paper on a statewide survey ( Attachment 3). The survey indicated that a large majority of voters in Arizona support mandatory auto insurance. He maintained that mandatory auto insurance is good public policy because it speaks to responsibility. Mr. Hair referred to the DOI's third annual report on motor liability ( Attachment 4). The report provides information on what makes insurance premiums expensive and shows where premium dollars go. The report indicates that Arizona is 15th in the nation among average insurance costs. Mr. Hair brought up the question of whether mandatory automobile insurance is working. He suggested that it is not. He advised that it is not as effective as it should be because recent revisions relating to enforcement have been designed to be as noninvasive to the average person as possible. Enforcement is based on a system of computer reporting by the insurance companies to the Department of Motor Vehicles. He stated that the system of monitoring who is insured and who is driving uninsured is not working well and that enforcement is not good. Representative Blendu commented that he has found the premise to be untrue that as penalties for not having auto insurance coverage are increased, people will comply. Representative Blendu emphatically stated that if auto insurance is mandated, the cost to everyone must be considered. HOUSE INTERIM STUDY COMMITTEE ON PRIVATE PASSENGER AUTOMOBILE INSURANCE 3 12/ 5/ 96 Chairman Jarrett announced that after copies of the minutes of the meetings are distributed to Members and an outline is prepared by staff, Members will get together to discuss recommendations for the final report. She also solicited any comments or suggestions from members of the audience and said those recommendations would be considered by the Committee in its deliberations. Without objection, the meeting adjourned at 3: 30 p. m. - iF'P,&+. q . Lq9 < * nne Bell, Cobittee Secretary ( Attachments and tape on file in the Office of the Chief Clerk.) HOUSE INTERIM STUDY COMMITTEE ON PRIVATE PASSENGER AUTOMOBILE INSURANCE 4 12/ 5/ 96 IV. COMMITTEE RECOMMENDATION The House Interim Study Committee on Private Passenger Automobile Insurance chose to make no formal recommendation with regard to proposed legislation. However, Chairman Jarrett, did indicate her desire to inquire into the efficacy of mandatory automobile insurance with the formation of an additional interim committee during the 1997 interim.

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Home House Interim Study Committee on Private Passenger Automobile Insurance: final report

House Interim Study Committee on Private Passenger Automobile Insurance: final report

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