Georgia Legislature Passes Bill to Increase Competition Among Auto Insurers in Their State

Thanks to the passage of SB 276, which will encourage more competition among auto insurance companies, consumers in Georgia could soon see cost savings and more product selection, according to the Property Casualty Insurers Association of America (PCI).

SB 276, which is awaiting the governor’s signature, establishes a competitive rating system in Georgia and eliminates the requirement that a company receive prior approval from the Georgia insurance commissioner before making any changes to the rates they charge. Flexibility over the setting of rates means the marketplace becomes more responsive to consumers. The law would apply to auto policies written at limits above those required by the state.

“Under the new system, consumer choice will determine insurance rates, as opposed to a government body that can be riddled with red tape and political pressures,” stated Robert Herlong, vice president and regional manager for PCI.

He added that making the auto insurance market more competitive means more insurance products to fit the needs of drivers and more freedom to choose among policies.

Thirty other states allow auto insurers to adjust rates without prior approval of the insurance commissioner, and in those state consumers enjoy lower and more stable insurance rates, according to PCI. Any action that increases competition encourages more companies to set up operations in a state, which results in wider variety of insurance products and more insurance jobs and investments in the state.

Furthermore, under a competitive rating system, the commissioner still provides oversight to ensure that rates are not discriminatory, excessive or inadequate, but also works to facilitate fair competition in the marketplace.

“We applaud the legislature, the governor, and the insurance commissioner for their thoughtful deliberations on reforming the Georgia auto insurance system,” Herlong concluded.