HB 243 -- AUTO INSURANCE

SPONSOR:  Luetkemeyer

COMMITTEE ACTION:  Voted "do pass" by the Committee on Financial
Services by a vote of 12 to 7.

This bill changes the definition of "renewal" as that term
applies to automobile insurance.  Any automobile insurance policy
with a term of less than six months or with no fixed expiration
date will be considered a six-month policy.  Under current law,
the default term is 12 months.

FISCAL NOTE:  No impact on state funds.

PROPONENTS:  Supporters say that the bill is based upon a
recommendation by the National Association of Insurance
Commissioners.  A shorter term allows insurers to better rate
their risk.  Reducing the term will cause insurers to be more
active in their underwriting and make premiums more in line with
the risk associated with each driver.

Testifying for the bill were Representative Luetkemeyer; Farmers
Insurance Company; Missouri Insurance Coalition; State Farm
Insurance Company; and National Association of Independent
Insurers.

OPPONENTS:  Those who oppose the bill say that it is not in the
best interest of the consumer.  Currently, a person can be
guaranteed coverage for 10 months, rather than the six months
that would be required by the bill.  If an insurer wanted to
cancel a person, they could do so four months earlier.

Testifying against the bill was the Independent Insurance Agents
and Brokers of Missouri.

Richard Smreker, Senior Legislative Analyst

Missouri House of Representatives
Last Updated July 25, 2003 at 10:11 am