NCOIL President state Sen. Gary Richardson (AZ) testified on behalf of NCOIL on September 9 before the U.S. Senate Committee on Commerce, Science, and Transportation in opposition to S. 625, the Auto Choice Reform Act. Before a standing-room-only hearing, covered by C-SPAN, Sen. Richardson blasted the preemption of state authority. He branded the premium cost-savings under the proposal as “pure blue sky and hot air.”

The bill, sponsored by Sen. Mitch McConnell (R-KY), would mandate that all states provide automobile insureds the option of choosing coverage under a no-fault system or remaining in their present tort system.

Sen. Richardson told the Committee that NCOIL supported initiatives aimed at enactment of no-fault laws at the state level.

Richardson said, “NCOIL believes that S. 625 runs contrary to the McCarran-Ferguson Act and its longstanding Congressional mandate empowering the states to regulate the business of insurance.

“NCOIL strongly believes that the states are in a better position to determine the different and immediate needs of consumers in each state than the federal government. . .

“McCarran-Ferguson has stood the test of more than one-half century. Over that span, insurance regulation and insurance markets, though not perfect, have worked and worked exceedingly well. Over those years, Congress in its wisdom has rejected several initiatives that would have undermined state authority.”

In response to the Joint Economic Commission estimate that S. 625 would achieve $45 billion in cost-savings related to automobile insurance, Richardson said, “That is pure blue sky and hot air. There is no way to know how many states would not opt out of the choice no-fault proposal as mandated in S. 625. In those states that do elect to remain in the choice no-fault system, it is impossible to estimate how many consumers will elect coverage.”

In concluding his testimony, Sen. Richardson told the Committee that S. 625 represents a departure from the wisdom of McCarran-Ferguson and attempts to solve a problem that doesn’t exist.

Also testifying in opposition to S. 625 was Nebraska Gov. Ben Nelson who addressed, in part, the effect the legislation would have on consumers.

“I’m not convinced it would be clear to purchasers of auto insurance that, to save a few dollars on their annual premiums, they are foregoing their rights, and those of their families, to pursue monetary damages for pain and suffering and other intangible losses,” Gov. Nelson said at the Committee hearing.

Speaking in favor of the federal initiative, former Massachusetts Gov. Michael Dukakis said, “Here’s a way to give our citizens — and especially those in our cities, who often pay the highest cost for their groceries and their property taxes — a progressive ‘tax cut’ far in excess of anything that even the most generous tax-cutter has proposed for average working people and their families.”

The Committee also heard testimony in favor of the legislation from Denver Mayor Wellington Webb and Fulton County (GA) Commissioner Michael Hightower.