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Bill to Allow Service Members to Retain Auto Policies Introduced

Legislation has been introduced in Congress that would allow members of the U.S. military to retain their auto insurance policies when they are transferred to new bases...
June 2, 2014

Legislation has been introduced in Congress that would allow members of the U.S. military to retain their auto insurance policies when they are transferred to new bases. The Servicemembers Insurance Relief Act (H.R. 4669) was introduced last week by Reps. Ed Royce (R-Calif.) and Tammy Duckworth (D-Ill.).

Although it was not specifically charged with developing such insurance policies, nevertheless the Federal Insurance Office (FIO) chose to assert itself in this matter. In its 2013 report, the FIO recommended the development of personal auto insurance policies for U.S. military personnel that would be enforceable across state lines. It then apparently was involved in advancing this recommendation to the point where it was introduced as legislation – by the foremost supporter of federal insurance regulation in Congress, Rep. Royce. His bill tasks the FIO with developing a “standard servicemembers’ insurance choice notice” that insurance companies would provide to service members who notify their insurer of a temporary move in compliance with a temporary duty or a permanent change of station.

This bill would still pose potential conflicts of law regarding McCarran-Ferguson, state law, preemption, and key differences between the treatment of active duty personnel and their families under the law, versus those not on active duty, in the reserves or retired. See additional commentary.

What It Means to Agents: While making it easier for our active duty service members to maintain auto insurance coverage is a laudable goal, creating a new classification of national insurance policies is problematic, especially since it preempts state oversight. By so doing, this bill would also seek to promote and strengthen the FIO, which should not be a goal of this legislation.

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