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PIA Comments On FIO Auto Affordability Index

PIA has commented on the release by the Federal Insurance Office (FIO) of a new auto insurance affordability index it developed and adopted. PIA National, which submitted formal comments in August and met with FIO staff in the fall...
July 20, 2016

PIA has commented on the release by the Federal Insurance Office (FIO) of a new auto insurance affordability index it developed and adopted. PIA National, which submitted formal comments in August and met with FIO staff in the fall, maintains that the index to measure affordability for “Affected Persons” (defined as traditionally underserved communities and consumers, minorities, and low- and moderate-income persons) may not produce meaningful results.

“We appreciate the engaged process that FIO extended to the industry and the subsequent follow-ups for additional information and asking additional questions,” said PIA National Senior Vice President for Industry Affairs Patricia A. Borowski, noting that in addition to filing detailed comments, PIA met with FIO staff to address their questions and convey the views of agents. “However, we still do not see if or how FIO will account for several other critical factors, such as the differences—most of them significant—that exist among all drivers as to their individual or collective household driving records.”

The FIO announced on July 13, 2016, that if the average auto insurance liability premium paid by Affected Persons is more than 2 percent of the median income in those neighborhoods, the auto insurance will be considered unaffordable.

 

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