Legislative Costing

Pinnacle effectively presented their findings in person before a meeting of the New Mexico Medical Society.

— Alan Seeley
New Mexico Insurance Division

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Legislative Costing

With insurance laws and regulations constantly evolving, being alert to changes and their implications is only part of your challenge. Since even a seemingly small modification can have a material impact, you need actuarial experts who can detect a potential law’s implications on insurance markets quickly and accurately.

Our experienced property/casualty actuaries can apply their expertise to help you understand the potential legislative impact in your state. Our costing studies of proposed insurance legislation help policy makers in many states sift through legislative implications. And, as you work to meet unrealistic deadlines in even more complicated political circumstances, we will make sure our analysis is both timely and easy to understand.

We are also available to provide both written and oral testimony to support our findings. As expert witnesses, our actuaries assist insurance trade organizations and state regulators, legislative committees and industry associations, including physician and hospital groups.

As innovators in the actuarial profession, we helped create the underwriting and pricing practices that are now industry standards. We remain on the cutting edge of actuarial science through our recognized commitment to the actuarial profession and thought leadership. We combine our deep expertise and insight gained from working with a wide range of clients with unique qualities that help us ensure we stand apart from other providers:

Independent. Solely-owned by our professional staff, Pinnacle is not affiliated with any insurance company or accounting firm. Pinnacle’s independence is demonstrated by the variety of clients who trust us for legislative support projects including: state insurance regulators, state legislative committees, insurance trade organizations, and state associations of physicians, hospitals, insurers and trial lawyers.

Credible. Our legislative support spans a variety of cases and venues. As recognized leaders in the actuarial profession, our legislative analyses are given the highest standard of credibility.

Experienced. Along with our seasoned actuaries, our team includes training actuaries who can provide a fresh perspective. We pull from our deep bench to assemble the right team for each assignment.

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Case Studies

Contractor's Liability
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Contractor's Liability

Pinnacle was asked to provide a legislative costing analysis and expert testimony regarding proposed legislation that would substantially expand coverage for construction defects in Oregon. Pinnacle’s study and testimony focused not only on the current conditions of the contractors’ liability insurance market compared to other states, but also the historical changes seen when other states made similar changes. Our analysis also focused on the relationship between home warranties and commercial general liability insurance policies and how these risk mitigation techniques differ over time after a home is completed.

Florida Automobile No-Fault Impact Analyses
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Florida Automobile No-Fault Impact Analyses

In 2006 and 2007, Pinnacle was retained by Floridians for Lower Insurance Costs (FLIC) to conduct independent actuarial studies to determine the cost implications on the Florida Health Care system from various changes to the Florida No Fault Law.

First in 2006 we conducted an independent actuarial study to determine the cost implications of repealing Florida’s current no-fault law. Pinnacle also priced first party medical payments benefits of $2,500, $5,000 and $10,000 as replacements for current personal injury protection (PIP) benefits.

Then in 2007, Pinnacle determined the impact that would result from the sunset of Florida’s current no fault law. Pinnacle also determined what current PIP insurance costs will be absorbed by other insurance programs compared to costs that will go unreimbursed since the current PIP coverage will be eliminated at the time that no fault is sunset. Pinnacle testified before the Florida House Committee Working Group on Insurance in support of the analysis. The Florida No Fault Law was sunset only to be reenacted immediately thereafter.

Minnesota Automobile No-Fault Impact Analyses
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Minnesota Automobile No-Fault Impact Analyses

The Insurance Federation of Minnesota retained Pinnacle in 2006 to conduct an independent actuarial study to determine the possible cost implications of changing Minnesota’s current no-fault law. The scenarios were:

  • A complete repeal of the no-fault law, which would be replaced with a tort system including mandatory liability insurance. We also priced first party medical payments benefits of $2,500, $5,000 and $10,000 as replacements for current personal injury protection (PIP) benefits.
  • Implementing a medical fee schedule. This option would consider two different fee schedules: the Minnesota Worker’s Compensation fee schedule, and 115% of the Medicare fee schedule.
  • Introducing a Michigan-style verbal threshold implementation with several PIP limit options.
  • Capping treatments on soft tissue injuries to $2,500.
  • Making alternative care optional for an additional premium.
  • Reducing the PIP benefit limit from $20,000 each for the separate medical and non-medical limits (with $40,000 of coverage total) to $10,000 for each separate sub-limit. This would also include an additional $10,000 of coverage for “trauma care.” 

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