Exempt Commercial Policyholder (ECP) : An Idea Whose Time Has Come — And Gone?

Overview: If someone needs to be reminded of what an “exempt commercial policyholder” (ECP) is, he is not alone. The relative obscurity of the term is a fair reflection of the impact ECPs have had on the market. Exempt commercial policyholders are organizations deemed to be large and sophisticated enough to purchase auto, property, and liability insurance written with forms and/or rates that have not been filed with state regulators. Under the heady banner of “commercial lines deregulation,” 26 states enacted laws in the late 1990s and 2000 establishing criteria for organizations to qualify as an ECP or equivalent designation. To qualify for ECP status, a private, for-profit company typically must meet thresholds set by individual states for certain criteria, including: annual property/casualty insurance premium (not including, for the most part, workers compensation and professional liability); company net worth; etc. The drive to create ECP classifications has essentially stopped. Given that nearly half the states have no ECP classification at all, and the others have a confusing range of criteria for them, it is fair to conclude that ECPs have had a very limited impact on the market for commercial insurance. It is recommended that states make certain lines automatically eligible for exempt filing status, such as inland marine and equipment breakdown. Of all the reasons why the drive to establish ECPs has stalled, one stands above the others. Insurers are focused on promoting initiatives to relax regulatory constraints on all insurance, not just on large commercial accounts.

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Format: HTML | Date: Jul 2003 | Pages: 1