Glendening scales back insurance reform bid Potential savings of motorists reduced

March 15, 1996|By Peter Jensen | Peter Jensen,SUN STAFF

Facing opposition from some of the state's most powerful interest groups, Gov. Parris N. Glendening yesterday offered to scrap most of his plan to reform car insurance, taking along with it much of the potential savings to drivers.

In an unusual presentation to members of the House Economic Matters Committee, a Glendening aide agreed to discard elements of the legislation that raised the strongest objections from health care providers, lawyers and insurance companies.

As a result, the Glendening initiative won't save drivers 15 percent from their premiums, as had been promised by the original proposal. But officials said the revised measure could still shave as much as $200 from a high-risk Baltimore driver's annual bill.

"There's still an interest in doing something to lower rates in the city," said Steven B. Larsen, the governor's legislative aide. "The first proposal was ambitious. We're offering to scale back."

The new plan retains anti-fraud proposals, banning so-called runners who go to accident scenes on behalf of lawyers and doctors and prohibiting attorneys and doctors from employing them to solicit victims. It would prohibit lawyers from soliciting victims for 30 days after an accident.

It also would require state licensing boards to be informed when licensees are involved in insurance fraud. Lawyers convicted of fraud would be prohibited from practicing.

But the new proposal abandons the most controversial elements of the original bill, such as denying an accident victim the opportunity to recover from multiple sources for the same injury.

It no longer would limit benefits to victims who claim to have suffered strains or sprains. Nor does it require insurance companies to lower their rates.

The legislation would produce most of its savings simply by allowing drivers to elect to carry less insurance.

"It's a shame these special interests are all winning," said House Speaker Casper R. Taylor Jr., who attended the presentation.

"This is a classic example of common sense and the common good vs. special interests."

Mr. Taylor said he supported the original bill, but he acknowledged that it had little backing within the General Assembly. The new version has a much greater chance of passage, although even its supporters concede that it is not a sure thing.

The biggest savings would come from a proposal to allow drivers drop Personal Injury Protection (PIP), a no-fault coverage that pays for medical expenses and lost wages to an injured party regardless of who caused the accident.

Drivers may already waive some PIP coverage, but must carry it for some passengers, including anyone in their household under age 16.

The other cost savings would come by allowing drivers to waive coverage for property damage caused by an uninsured motorist. A driver hit by an uninsured motorist could be stuck with car repair bills as a result.

Mr. Larsen told committee members that a 45-year-old city resident who pays $1,500 annually to the Maryland Automobile Insurance Fund, the state-run insurer of high-risk drivers, could save $181 if he opts to waive PIP and another $29 if he elects to lower his protection against uninsured motorists.

But most drivers, particularly those in the suburbs and rural areas, would save much less perhaps $30 to $100 for the PIP waiver and $11 to $23 for the property damage waiver, he said. A driver who doesn't want to lessen his insurance coverage would likely save nothing.

Some committee members pointed out that the anti-fraud elements retained by the administration are either duplicative or weak. Lawyers already would lose their licenses when convicted of crimes. Other bills to ban runners and limit lawyer solicitation are gaining approval in the legislature.

Glendening aides have privately expressed disappointment with the lack of support from Mayor Kurt L. Schmoke and legislators from the city, where car insurance premiums often run two and three times the cost elsewhere in the state.

Representatives of the insurance industry said yesterday that they see nothing objectionable about the bill now, but that they want to scrutinize it further before taking a position.

"It certainly doesn't go as far as the original bill," said Jeffrey D. Rouch, a lobbyist for Nationwide Insurance. "We're certainly not violently opposed to it. It's a step in the right direction, a very small step."

"It's quite a different proposal from what it was," said Marta Harting, a lobbyist for State Farm Insurance. "When you have every single interest group down here against it, it's a hard sell."

Health providers and lawyers will still likely oppose the bill. Michael Gisriel, a lobbyist for the Maryland Trial Lawyers Association, said he supports the anti-fraud portions of the bill, but little else.

"These changes reduce people's coverage and benefits," said Mr. Gisriel. "It's getting better, but it's still a bad bill."

Pub Date: 3/15/96

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