Legislative Costing

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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

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.” 

New Jersey Automobile No-Fault Impact Analyses
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New Jersey Automobile No-Fault Impact Analyses

Save Choices for New Jersey Drivers (SCNJD), an ad-hoc coalition of insurers, trade and business associations asked Pinnacle to determine how proposed legislation would affect drivers.

The New Jersey Auto Cost Reduction Act eliminated the judicial requirement that permanent injuries that do not meet the other eligibility criteria for tort claims in no fault cases must have a “serious impact” on the claimant’s life. Pinnacle evaluated the affect of eliminating this requirement and determined the law would “significantly increase “losses eligible for tort recovery. Hence, Bodily Injury (BI) Liability and Uninsured/Underinsured Motorist Coverage (UM/UIM) costs and premiums would increase for drivers selecting the verbal threshold.

On June 14, 2005, two years after Pinnacle conducted its analysis, the New Jersey Supreme Court concluded does not imply a "serious impact" requirement for those seeking damages for non-economic losses (Octavio Serrano v. Jacqueline Serrano, et al. (A-99-03) and DiProspero v. Penn, et al., (A-66-03). As a result, injured claimants may seek recompense from the at-fault party for losses such as pain and suffering. SCNJD hired Pinnacle again to update the analysis based upon the later Insurance Research Council (IRC) data, which became available subsequent to the release of its 2003 report. 

Workers' Compensation
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Workers' Compensation

Pinnacle was retained by a major national political organization to investigate the impact of several workers compensation reforms including: implementation of mandatory managed care, privatization of state workers compensation insurance funds and the permitting of private insurers to enter previously monopolistic workers compensation states. Our analysis looked at state-level differences in rate levels, insurer experience, coverage competition, the mix of medical and indemnity claims and numerous other metrics. The study was extremely well received and ultimately presented to more than half of the nation’s governors.

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