Alaska State Legislature
News from the House Majority

Jerry Ritter, House Majority Press Office
State Capital
Juneau, AK 99801-1182
ph: (907) 465-3804
web site: www.akrepublicans.org

Alaska Insurance Rates Begin Downward Trend - Tort Reform May Be Partially Responsible

For Immediate Release: February 18, 1998 Contact: Rep. Brian Porter at (907) 465-4930.

Juneau - State Farm Mutual Automobile Insurance Company and United Services Automobile Association (USAA) have announced in excess of twelve million dollars in premium dividends and rebates to their policy holders in Alaska. Between them, State Farm and USAA account for about one-third of the private passenger automobile insurance market in Alaska.

In a recent letter to policy holders, the Chairman and CEO of USAA, Robert T. Herres, wrote: "Safer cars and highways, tort reforms and reduced growth in medical costs are driving factors involved (in this reduction) . . . we can expect future dividend distributions to be impacted accordingly."

"This is good news," said House Majority Leader Brian Porter (R-Anchorage), who sponsored the tort reform legislation passed last year by the legislature. "Obviously, it's too early to tell how much, if any, impact tort reform has had on stabilizing insurance rates, but preliminary indications are that it is helping to head those rates in the right direction, which is down."

Tort reform was expected to result in improved claims loss figures for insurance companies doing business in Alaska. Such changes which reflect long-term trends typically are reflected in rate adjustments. As an example, State Farm Mutual reduced its auto insurance rates an average of 2.4 percent effective September 15, 1997.

"While it's going to take at least two more years to assess the full impact of the 1997 tort reform legislation, the future is already looking brighter," Porter said. "But we now know for certain that Alaskans are finally enjoying some direct and substantial relief from rising insurance rates and it looks as though tort reform is playing a part."

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Broadcasters note: Actuality from Rep. Porter is available at 1-800-478-6540.
= Brian Porter, 118 K