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DELAWARE INSURANCE DEPARTMENT ENACTS RESTRICTIONS ON AUTO SURCHARGES

DELAWARE INSURANCE DEPARTMENT ENACTS RESTRICTIONS ON AUTO SURCHARGES
 DOVER, Del., April 6 /PRNewswire/ -- Calling it "one of the most important pieces of consumer protection during his administration," Delaware Insurance Commissioner David N. Levinson today announced the promulgation of a regulation restricting the right of insurance companies to impose surcharges on drivers.
 Regulation 68, "Limitations on Automobile Surcharges in Voluntary Markets and the Assigned Risk Plan" will become effective July 1, 1992.
 Levinson stated that the regulation was hammered out in consultation with insurance industry representatives over a nine-month period. The regulation will prohibit insurers from imposing a surcharge on policyholders who are involved in accidents which are not the fault of the policyholder and in accidents for which the insurer makes no payments. Additionally, for the first accident, the regulation will prohibit the imposition of any surcharge which exceeds the amount of the claim paid by the insurance company.
 In addition, the regulation will prevent insurance companies from surcharging for an accident and simultaneously moving an insured into a higher-priced rating tier, which has the impact of substantially increasing rates for insureds. It will also prohibit insurers from surcharging when less than 50 percent of the fault is attributed to the insured.
 The regulation will also require insurers to offer certain assigned risk insureds coverage in their standard market program under the following circumstances:
 -- If a named insured has a clean record (free from all chargeable accidents and point violations over a three-year period) the assigned risk insurer must offer coverage in the standard market after one year in the Assigned Risk Plan.
 -- If a named insured is a serviceman or a member of the Peace Corps returning from service abroad with no chargeable accidents or point violations, coverage in the standard market must be offered after six months in the Assigned Risk Plan.
 Levinson stated, "This Regulation will go a long way to stopping the abuses of some insurers in the way they surcharge. A driver should be charged for insurance based upon his driving record and the hazard he or she represents. Surcharging for accidents which are not the fault of the insured violates this principle."
 "Moreover," the commissioner continued, "probably the angriest complaints the Insurance Department receives are from drivers who are surcharged an amount which exceeds the amount the insurance company has paid for a claim. This regulation will prohibit insurers from surcharging for a first at-fault accident which exceeds the amount of the claim paid.
 "This regulation will also benefit those who have served our country in both the Armed Forces and Peace Corps. They should not be penalized for their patriotism. Other drivers with clean records will also be given a fair shake. Regulation 68 accomplishes this."
 /delval/
 -0- 4/6/92
 /CONTACT: David N. Levinson, Delaware Insurance commissioner, 302-739-4251/ CO: Department of Insurance ST: Delaware IN: INS SU:


KA -- PH005 -- 5280 04/06/92 10:19 EDT
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Publication:PR Newswire
Date:Apr 6, 1992
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