American Insurers Worry about Safety after Potential De-regulation

07/15/96

The American Insurance Association (AIA) raised some red flags concerning the auto industry's desire to "harmonize" the U.S. government's regulation of the automotive industry with Europe's regulations on carmaking. The AIA testified at federal hearings about the issue, The hearings were organized by the National Highway Association (NHTSA) and the Environmental Protection Agency (EPA).

The AIA situated the question of de-regulation as a trade-off between the flow of commodities, consumer safety, and due process. The AIA testified about potential problems that can arise with de-regulation, particularly if the federal government allows safety standards to drop or reduces the avenues consumers have to research and redress problems that arise in car manufacturing.

AIA Assistant General Counsel David F. Snyder said, "We favor measures which will help the free flow of goods and services by the harmonization of non-safety requirements. We would, however, have serious concerns if harmonization would lead to least-common-denominator product safety standards, rigid multilateral safety research priorities, or any procedure that will subject proposed or existing U.S. safety standards to mandatory review or approval by an international body.

"U.S. rulemaking is governed by a fabric of laws guaranteeing the right to obtain information, the right to participate for all interested elements of the public and the right to appeal to courts under long-standing and oft-applied standards," Snyder said. "Few countries or international organizations assure such due process and openness."

Rather than pursuing de-regulation like the automotive industry, the AIA suggested an alternative. "A communication channel could be established to allow an international coordinating body to submit non-binding comments on proposed U.S. regulations describing how other countries have approached similar issues," Snyder said. "The dialogue could also offer the opportunity to set higher safety standards such as cars that protect occupants in crashes at 50 mph and bumpers that sustain no damage in 10 mph collisions."

Snyder suggested that a broad-based dialogue be established involving all interested parties in seeking higher international goals for motor vehicle safety standards.

"We support informing our regulatory system with data on approaches to similar issues in other countries," Snyder said. "We do not support rolling back or paralyzing future U.S. safety regulatory efforts in the name of harmonization."

Paul Dever -- The Auto Channel