Underwriter Freedom [S]
Insurance consumers benefit from increased choices and lower costs when insurers have the ability to use a wide range of factors to assess the risks faced by insured individuals or businesses.
Some states restrict underwriting freedom by limiting the ability of insurers to use factors that, in other states, are proven to effective measures of risk. When insurance companies are restricted in how they can underwrite their business, they may find offering certain coverages or doing business in certain states is not viable. Such a determination can result in fewer options available to consumers, and likely at higher prices.
Generally speaking, states that permit the most underwriting freedom have more insurance companies competing for business, which results in not only more choices of insurance but lower costs for it. Therefore, NAMIC supports legislative and regulatory action to preserve and expand the freedom of insurance companies to use underwriting practices that facilitate widespread product availability, fairness in pricing, and prudent conduct derived from meaningful risk assessments. We oppose efforts by state and federal authorities to curtail such practices.