Best CIS Vermont names for the worst Florida State Insurance

 

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24 February 2009 Tuesday 04:11 PM EST

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Best CIS Vermont names for the worst Florida State Insurance Regulations

Raymond J Lehmann

WASHINGTON



Arizona, Idaho, Utah and Vermont are the most open and competitive regulatory environment for the insurance of goods in accordance with a next state by state survey conducted by the libertarian Competitive Enterprise Institute.

A copy of this report indicates the focus group gave failing grades six states, with the states of Florida, Massachusetts and Louisiana all receive an F-proliferation rules for their desk drawer, territorial restrictions, the large residual markets, and researchers cite other factors as obstacles to the liberalization of markets.

Written by Eli Lehrer and Michelle IEC Fellows Minton, the report cites Vermont as having the most competitive in the regulatory environment of the nation, a state also took place in the first survey of the institute in 2008. The captive capital was cited for its ability to attract new business and his choice to allow insurers to use a wide territorial factors in determining rates.

"Vermont is a haven for themselves from insurance companies: Each insurance company recognized nationally, it does business, and domestic competition for market share with a number of companies Vermont-based, "Minton Lehrer and write.

At the other end of the spectrum, the faults of Florida that the regulatory environment of the nation's most serious, stating categorically that: "A free market for homeowners insurance does not exist in Florida."

"The state of the cumbersome approval process for wholesale and government interference with the process for setting rates has led most major insurers to withdraw or reduce the political writing in the market Florida, "said the CIS, but also the shortcomings of Florida and Louisiana for the operation" to full ownership of insurance companies that state agencies. "

Edward O'Brien, Louisiana deputy commissioner of insurance for property / casualty lines, has recognized the state of stability of the loss ratio has been affected in recent years, which he attributed to the exodus of carriers to the state after hurricanes Katrina and Rita in 2005.

"We are trying desperately and have been very successful in eliminating them," said O'Brien. "We've had over the past three years, a seminar rating for companies to come talk to our people, and understand what we can approve and what we can not accept ... We are trying our best with the rules of desk drawer, I can not tell you 100% that they are gone, but I can tell you that if I discover them, they disappear. "

Edward Domansky, a spokesman for the Florida Office of Insurance Regulation, said Insurance Commissioner Kevin McCarty "recognizes that the insurance market in Florida has challenges for both insurers and consumers."

"The state simply because of geography Florida inherently more risky for insurers and more expensive for consumers," said Domansky.

He also called "categorically untrue", according to the report that the private market rates should not be more than 15% higher than those set by the control of the State Property Insurance Corp. Citizens

"The insured has the option to go to citizens if the rate is more than that, but neither the rate or price controls are based on rates of citizens. OIR reviews and approves or disapproves company deposit rates, it does not set rates, "said Domansky.

Lehrer, however, was his assertion that the regulators and citizens' subsidized below market rates, was used de facto price control mechanism. "

"The state-run is a price control mechanism, for all practical purposes," he said.

(By RJ Lehmann, director of the Washington office: raymond.lehmann @ ambest.com)

25 February 2009

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