Legislative Costing

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.

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

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.