WASHINGTON--The National Conference of Insurance Legislators hasrejected an effort to get states to adopt laws prohibitingmunicipalities from charging fees when police or fire departmentsrespond to an accident or prepare a report on one.

They acted based on testimony from Regina Moore, president ofCost Recovery Corp., a Dayton, Ohio, company which has developed afee-based system to provide such information, and from lawenforcement officials from communities in Ocala, Fla. and Longwood,Ohio.

All three argued that such fees are necessary becausecash-strapped communities would otherwise have to curtail necessarypolice and fire services if they could not charge those fees,especially to those involved in accidents that live outside thecommunity.

The model law was proposed by North Dakota State Rep. GeorgeKeiser, R-Bismarck. In presenting the proposal, he said thatfollowing testimony on the issue, he would recommend the model bepermanently deferred because a model could not be crafted thatwould mesh with existing state laws.

Based on the suggestion from Rep. Keiser and the testimony ofthe witnesses, the NCOIL panel voted unanimously to drop the ideaentirely, or as it phrased it, "permanently defer consideration" ofthe proposed model.

NCOIL acted despite the pleas of the insurance industry thatcharging such fees constitutes double taxation.

Joseph Thesing, director of state affairs for the NationalAssociation of Mutual Insurance Companies, told the panel that theindustry recognizes that municipalities are struggling to balancebudgets in order to continue providing vital services and thataccident response fees can appear an attractive alternative toraising taxes.

But, Mr. Thesing told the panel, municipalities imposing thesefees are supported by tax dollars intended to provide the veryservices for which the municipalities are charging fees.

"These services are not typically covered by insurance, but ifmore municipalities undertake these billing practices, moreinsurers will be paying more claims and, ultimately, those claimswill result in higher rates," Mr. Thesing warned.

"Vendors are convincing municipalities that the insuranceindustry is sitting on a piggy bank--this committee well knows thatinsurance companies responsibly manage reserves in order to paycovered claims, which is why insurance exists," Mr. Thesingsaid.

He also noted that 24 municipalities have recently chosen toeither vote down or rescind such ordinances.