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It is time for the feds to tackle the auto insurance industry.....
Car insurance getting more federal scrutiny
New agency seeks comments on accessibility, affordability of coverage
Next up for Dodd-Frank enforcers: the car insurance industry.
Having already influenced how banks and credit card companies deal with consumers, theDodd-Frank Wall Street Reform & Consumer Protection Act also gives a new federal insurance office the power to monitor the availability and affordability of car coverage in minority and low-income communities.
Historically, the industry has been regulated by states, but Dodd-Frank established a Federal Insurance Office in the U.S. Treasury Department.
Nearly every state requires car owners to have insurance, but about 15 percent of motorists are uninsured, the office said.On Thursday, the office — which is headed by Michael McRaith, the former head of Illinois' insurance department — announced it was seeking comments and information about the affordability of car insurance and ways to determine whether minority communities have enough access to it.
The car insurance industry says coverage has become more affordable. In December, for example, the Insurance Research Council said the affordability of auto insurance improved during the previous decade for middle- and low-income U.S. consumers. The National Association of Insurance Commissioners also said average spending on car insurance fell from 2007 to 2011, the latest time period for which it had figures.
"Auto insurance policyholders also have a degree of control over the price they pay because the premium is determined in part by their driving record, the type of car they drive and the miles they drive each year," said Loretta Worters, vice president of the Insurance Information Institute. "In addition, many consumers are volunteering to have telematic devices, which monitor miles driven, placed in their vehicles."
Those usage-based programs, also known as pay-as-you-drive policies, give drivers a financial incentive to drive less and, depending on the information that is monitored, to drive more carefully, she said.
But consumer groups say it has become pricier for lower-income people and minorities.
"The definition of the affordability of personal auto insurance remains unclear," the office said.
Among other things, Dodd-Frank also will require most public companies to disclose a ratio comparing a company's median annual compensation for employees to that of its chief executive; established the Consumer Financial Protection Bureau, an agency that gathers consumer complaints; and imposed new capital and planning requirements on large banks.
Cleaning up: LanzaTech, which has a process that converts waste gas into fuel, recently closed on a $60 million fourth round of venture funding. Its first commercial facility, financed by a steel manufacturer in China, is expected to be running next year. The company, which was founded in New Zealand, is headquartered in Roselle but is moving its offices to Skokie.
Led by Mitsui & Co. with a $20 million investment, the funding round also includes new investors such as Siemens' venture capital fund; China's CICC Growth Capital Fund; and existing investors Khosla Ventures of Menlo Park, Calif., China's Qiming Venture Partners and the Malaysian Life Sciences Capital Fund.
LanzaTech's board includes Jim Messina, campaign manager for President Barack Obama's 2012 re-election campaign.
byerak@tribune.com
Twitter @beckyyerak
Car insurance getting more federal scrutiny
New agency seeks comments on accessibility, affordability of coverage
Next up for Dodd-Frank enforcers: the car insurance industry.
Having already influenced how banks and credit card companies deal with consumers, theDodd-Frank Wall Street Reform & Consumer Protection Act also gives a new federal insurance office the power to monitor the availability and affordability of car coverage in minority and low-income communities.
Historically, the industry has been regulated by states, but Dodd-Frank established a Federal Insurance Office in the U.S. Treasury Department.
Nearly every state requires car owners to have insurance, but about 15 percent of motorists are uninsured, the office said.On Thursday, the office — which is headed by Michael McRaith, the former head of Illinois' insurance department — announced it was seeking comments and information about the affordability of car insurance and ways to determine whether minority communities have enough access to it.
The car insurance industry says coverage has become more affordable. In December, for example, the Insurance Research Council said the affordability of auto insurance improved during the previous decade for middle- and low-income U.S. consumers. The National Association of Insurance Commissioners also said average spending on car insurance fell from 2007 to 2011, the latest time period for which it had figures.
"Auto insurance policyholders also have a degree of control over the price they pay because the premium is determined in part by their driving record, the type of car they drive and the miles they drive each year," said Loretta Worters, vice president of the Insurance Information Institute. "In addition, many consumers are volunteering to have telematic devices, which monitor miles driven, placed in their vehicles."
Those usage-based programs, also known as pay-as-you-drive policies, give drivers a financial incentive to drive less and, depending on the information that is monitored, to drive more carefully, she said.
But consumer groups say it has become pricier for lower-income people and minorities.
"The definition of the affordability of personal auto insurance remains unclear," the office said.
Among other things, Dodd-Frank also will require most public companies to disclose a ratio comparing a company's median annual compensation for employees to that of its chief executive; established the Consumer Financial Protection Bureau, an agency that gathers consumer complaints; and imposed new capital and planning requirements on large banks.
Cleaning up: LanzaTech, which has a process that converts waste gas into fuel, recently closed on a $60 million fourth round of venture funding. Its first commercial facility, financed by a steel manufacturer in China, is expected to be running next year. The company, which was founded in New Zealand, is headquartered in Roselle but is moving its offices to Skokie.
Led by Mitsui & Co. with a $20 million investment, the funding round also includes new investors such as Siemens' venture capital fund; China's CICC Growth Capital Fund; and existing investors Khosla Ventures of Menlo Park, Calif., China's Qiming Venture Partners and the Malaysian Life Sciences Capital Fund.
LanzaTech's board includes Jim Messina, campaign manager for President Barack Obama's 2012 re-election campaign.
byerak@tribune.com
Twitter @beckyyerak
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