[Federal Register Volume 79, Number 69 (Thursday, April 10, 2014)]
[Notices]
[Pages 19969-19970]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-08100]


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DEPARTMENT OF THE TREASURY


Monitoring Availability and Affordability of Auto Insurance

AGENCY: Federal Insurance Office, Treasury.

ACTION: Notice; Request for information.

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SUMMARY: The Dodd-Frank Wall Street Reform and Consumer Protection Act 
provides the Federal Insurance Office with a number of authorities 
including monitoring the extent to which traditionally underserved 
communities and consumers, minorities, and low- and moderate-income 
persons have access to affordable insurance products regarding all 
lines of insurance, except health insurance. Treasury issues this 
notice to elicit comment from state insurance regulators, consumer 
organizations, representatives of the insurance industry, 
policyholders, academia, and others as appropriate regarding: (1) A 
reasonable and meaningful definition of affordability; and (2) the 
metrics and data FIO should use to monitor the extent to which 
traditionally underserved communities and consumers, minorities, and 
low- and moderate-income persons have access to affordable auto 
insurance.

DATES: Comments must be received on or before June 9, 2014.

ADDRESSES: Please submit comments electronically through the Federal 
eRulemaking Portal: http://www.regulations.gov, or by mail (if hard 
copy, preferably an original and two copies) to the Federal Insurance 
Office, Attention: Lindy Gustafson, Room 1319 MT, Department of the 
Treasury, 1500 Pennsylvania Avenue NW., Washington, DC 20220. As postal 
mail may be subject to processing delay, it is recommended that 
comments be submitted electronically. All comments should be captioned 
with ``Monitoring Availability and Affordability of Auto Insurance.'' 
Please include your name, group affiliation, if any, address, email 
address and telephone number(s) in your comment.
    In general, comments received will be posted on http://www.regulations.gov without change, including any business or personal 
information provided. Comments received, including attachments and 
other supporting materials, will be part of the public record and 
subject to public disclosure. Do not enclose any information in your 
comment or supporting materials that you consider confidential or 
inappropriate for public disclosure.

FOR FURTHER INFORMATION CONTACT: Lindy Gustafson, Federal Insurance 
Office, 202-622-6245 (not a toll free number).

SUPPLEMENTARY INFORMATION: 
    I. Background: Congress passed and President Obama signed into law 
the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-
Frank Act) (Pub. L. 111-203) in July 2010. Subtitle A of Title V of the 
Dodd-Frank Act established the Federal Insurance Office (FIO) in the 
U.S. Department of the Treasury (Treasury). The statute provides FIO 
with a number of authorities including monitoring the extent to which 
traditionally underserved communities and consumers, minorities, and 
low- and moderate-income persons have access to affordable insurance 
products regarding all lines of insurance, except health insurance.
    A number of insurance products provide essential financial security 
to consumers, in addition to satisfying certain state laws or 
requirements, including, but not limited to, personal auto insurance, 
homeowners insurance, life insurance, and annuities. FIO proposes to 
monitor the availability and affordability of personal auto insurance 
for the following reasons:
    1. With the exception of New Hampshire, all states and the District 
of Columbia require consumers to

[[Page 19970]]

maintain auto liability insurance as a condition of automobile 
ownership.
    2. The percentage of uninsured motorists countrywide has hovered 
around 14 percent between 2002 and 2009.
    3. Owning an automobile is likely associated with a higher 
probability of employment and other factors associated with economic 
well-being.
    4. Industry representatives assert that auto insurance has become 
more affordable over time but consumer representatives assert auto 
insurance has become less affordable for low-income consumers and 
minorities.
    While the definition of availability is largely settled, the 
definition of the affordability of personal auto insurance remains 
unclear. Last year, the Availability and Affordability Subcommittee of 
the Treasury Department's Federal Advisory Committee on Insurance (FACI 
Subcommittee) suggested the following definition for affordability: 
affordability means that the cost of [personal auto insurance] is a 
reasonable percentage of a consumer's income.
    Measuring affordability according to the FACI Subcommittee 
definition is a difficult and subjective task. One approach may be to 
interpret personal auto insurance premium payments as affordable if 
such payments do not prohibit individuals and/or families from 
purchasing other required necessities. Or, personal auto insurance may 
be interpreted as affordable if it is actually purchased by individuals 
and/or families.
    Studies have used various metrics to measure availability and 
affordability of personal auto insurance. These include:
    1. The market share of the top ten writers of personal auto 
insurance;
    2. The market share of the residual market;
    3. The average auto insurance premium;
    4. The loss ratio; and
    5. An affordability index calculated by dividing the average auto 
insurance premium by median household income.

These metrics may be calculated only for the auto insurance coverage 
mandated by most states (e.g., bodily injury and property damage) or 
all auto insurance coverage (e.g., bodily injury, property damage, 
uninsured/underinsured motorist, collision, and comprehensive).
    A data source is needed to monitor the extent to which 
traditionally underserved communities and consumers, minorities, and 
low- and moderate-income persons have access to affordable auto 
insurance. While data on average personal auto insurance premium by 
coverage is collected by the National Association of Insurance 
Commissioners, other data sources will likely be needed.
    II. General Solicitation for Comments: The FIO hereby solicits 
comments, including supporting and illustrative information in support 
of such comments where appropriate and available, regarding:
    1. A reasonable and meaningful definition of affordability of 
personal auto insurance;
    2. The appropriate metrics to use in order to monitor the extent to 
which traditionally underserved communities and consumers, minorities, 
and low- and moderate-income persons have access to affordable personal 
auto insurance; and
    3. The data source(s) FIO should use to monitor the extent to which 
traditionally underserved communities and consumers, minorities, and 
low- and moderate-income persons have access to affordable auto 
insurance.
    III. Solicitation for Specific Comments. All comments received will 
be available to the public.

    Authority:  FIO Act 31 U.S.C. 313-14.

Michael T. McRaith,
Director, Federal Insurance Office.
[FR Doc. 2014-08100 Filed 4-9-14; 8:45 am]
BILLING CODE P