[Federal Register Volume 79, Number 69 (Thursday, April 10, 2014)]
[Notices]
[Pages 19969-19970]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-08100]
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DEPARTMENT OF THE TREASURY
Monitoring Availability and Affordability of Auto Insurance
AGENCY: Federal Insurance Office, Treasury.
ACTION: Notice; Request for information.
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SUMMARY: The Dodd-Frank Wall Street Reform and Consumer Protection Act
provides the Federal Insurance Office with a number of authorities
including monitoring the extent to which traditionally underserved
communities and consumers, minorities, and low- and moderate-income
persons have access to affordable insurance products regarding all
lines of insurance, except health insurance. Treasury issues this
notice to elicit comment from state insurance regulators, consumer
organizations, representatives of the insurance industry,
policyholders, academia, and others as appropriate regarding: (1) A
reasonable and meaningful definition of affordability; and (2) the
metrics and data FIO should use to monitor the extent to which
traditionally underserved communities and consumers, minorities, and
low- and moderate-income persons have access to affordable auto
insurance.
DATES: Comments must be received on or before June 9, 2014.
ADDRESSES: Please submit comments electronically through the Federal
eRulemaking Portal: http://www.regulations.gov, or by mail (if hard
copy, preferably an original and two copies) to the Federal Insurance
Office, Attention: Lindy Gustafson, Room 1319 MT, Department of the
Treasury, 1500 Pennsylvania Avenue NW., Washington, DC 20220. As postal
mail may be subject to processing delay, it is recommended that
comments be submitted electronically. All comments should be captioned
with ``Monitoring Availability and Affordability of Auto Insurance.''
Please include your name, group affiliation, if any, address, email
address and telephone number(s) in your comment.
In general, comments received will be posted on http://www.regulations.gov without change, including any business or personal
information provided. Comments received, including attachments and
other supporting materials, will be part of the public record and
subject to public disclosure. Do not enclose any information in your
comment or supporting materials that you consider confidential or
inappropriate for public disclosure.
FOR FURTHER INFORMATION CONTACT: Lindy Gustafson, Federal Insurance
Office, 202-622-6245 (not a toll free number).
SUPPLEMENTARY INFORMATION:
I. Background: Congress passed and President Obama signed into law
the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-
Frank Act) (Pub. L. 111-203) in July 2010. Subtitle A of Title V of the
Dodd-Frank Act established the Federal Insurance Office (FIO) in the
U.S. Department of the Treasury (Treasury). The statute provides FIO
with a number of authorities including monitoring the extent to which
traditionally underserved communities and consumers, minorities, and
low- and moderate-income persons have access to affordable insurance
products regarding all lines of insurance, except health insurance.
A number of insurance products provide essential financial security
to consumers, in addition to satisfying certain state laws or
requirements, including, but not limited to, personal auto insurance,
homeowners insurance, life insurance, and annuities. FIO proposes to
monitor the availability and affordability of personal auto insurance
for the following reasons:
1. With the exception of New Hampshire, all states and the District
of Columbia require consumers to
[[Page 19970]]
maintain auto liability insurance as a condition of automobile
ownership.
2. The percentage of uninsured motorists countrywide has hovered
around 14 percent between 2002 and 2009.
3. Owning an automobile is likely associated with a higher
probability of employment and other factors associated with economic
well-being.
4. Industry representatives assert that auto insurance has become
more affordable over time but consumer representatives assert auto
insurance has become less affordable for low-income consumers and
minorities.
While the definition of availability is largely settled, the
definition of the affordability of personal auto insurance remains
unclear. Last year, the Availability and Affordability Subcommittee of
the Treasury Department's Federal Advisory Committee on Insurance (FACI
Subcommittee) suggested the following definition for affordability:
affordability means that the cost of [personal auto insurance] is a
reasonable percentage of a consumer's income.
Measuring affordability according to the FACI Subcommittee
definition is a difficult and subjective task. One approach may be to
interpret personal auto insurance premium payments as affordable if
such payments do not prohibit individuals and/or families from
purchasing other required necessities. Or, personal auto insurance may
be interpreted as affordable if it is actually purchased by individuals
and/or families.
Studies have used various metrics to measure availability and
affordability of personal auto insurance. These include:
1. The market share of the top ten writers of personal auto
insurance;
2. The market share of the residual market;
3. The average auto insurance premium;
4. The loss ratio; and
5. An affordability index calculated by dividing the average auto
insurance premium by median household income.
These metrics may be calculated only for the auto insurance coverage
mandated by most states (e.g., bodily injury and property damage) or
all auto insurance coverage (e.g., bodily injury, property damage,
uninsured/underinsured motorist, collision, and comprehensive).
A data source is needed to monitor the extent to which
traditionally underserved communities and consumers, minorities, and
low- and moderate-income persons have access to affordable auto
insurance. While data on average personal auto insurance premium by
coverage is collected by the National Association of Insurance
Commissioners, other data sources will likely be needed.
II. General Solicitation for Comments: The FIO hereby solicits
comments, including supporting and illustrative information in support
of such comments where appropriate and available, regarding:
1. A reasonable and meaningful definition of affordability of
personal auto insurance;
2. The appropriate metrics to use in order to monitor the extent to
which traditionally underserved communities and consumers, minorities,
and low- and moderate-income persons have access to affordable personal
auto insurance; and
3. The data source(s) FIO should use to monitor the extent to which
traditionally underserved communities and consumers, minorities, and
low- and moderate-income persons have access to affordable auto
insurance.
III. Solicitation for Specific Comments. All comments received will
be available to the public.
Authority: FIO Act 31 U.S.C. 313-14.
Michael T. McRaith,
Director, Federal Insurance Office.
[FR Doc. 2014-08100 Filed 4-9-14; 8:45 am]
BILLING CODE P