Michigan Considers Auto Rate Freeze, New surveillance for in
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5 February 2009 Thursday 05:10 PM EST
628 words
Michigan Considers Auto Rate Freeze, New surveillance for insurers
Sean P Carr
LANSING, Mich.
Michigan auto insurers are failing to cry after Gov. Jennifer Granholm called for a freeze on insurance rates while the state's insurance consumer advocate has published a report recommending new restrictions and controls for industry.
In his annual State of the State address, Granholm said auto insurers should freeze the rates on 12 months while the legislature considers reforms. Granholm said that if companies refuse, she will lead the Office of Financial and Insurance Regulation to "use all tools at its disposal to ensure affordable and fair to consumers in Michigan."
Consumer Insurance Advocate Butch Hollowell's report, "affordable insurance for all. A plan to protect Michigan consumers," recommends 10 steps to the supervision of the industry, including requiring prior approval of insurance rates, except that the use of insurance credit scoring, strengthening the authority of regulators to grant refunds to policyholders and the redefinition of "premium prices."
The 328-page report highlights the fact that Michigan drivers pay among the highest in the nation, while the insurance industry has increased rates 69% since 1991, while taking advantage of the quasi - lack of regulation for 30 years. "
But Ann Weber, regional manager and counsel for the Property Casualty Insurers Association of America, said the lawyer's report ignores the reasons why prices are as they are in Michigan. State insurance laws are "generous" for consumers, "she says. Michigan is the only state in the country which offers unlimited first-party medical benefits for claimants.
Also, while the State is the second highest collision insurance premium in the nation, this is due in part to the state of the mixture of no-fault, under collision coverage that pays for damage to vehicles regardless of blame, Weber said in a statement. The loss per collision of the insured vehicle in Michigan is the highest in the nation, which explains the higher than average premiums for collision.
"With the turmoil in financial markets, this is not the time for state government and decrees to announce radical changes to the system, which may create other adverse effects, such as to discourage firms competitors on the market, which will likely lead to higher insurance costs and prices, "said Weber.
"The industry to be unhappy with this is not a surprise," said Hollowell. "They have done very well over the past 30 years."
In recent years, the number of serious accidents has decreased, the number of applications has decreased and the amount paid out has also dropped, Hollowell said. "The only thing that is going on is profit."
David Snyder, Vice President and assistant general counsel for the American Insurance Association, said in a statement, "unless the governor can freeze medical, litigation, motor vehicle accidents and other costs, is simply anti-competitive, business and anti-anti - Gallery consumers. "
After being appointed to this position last year, Hollowell hosted a series of hearings across the state on the affordability of automobile insurance. The report reflects the concerns of consumers that have arisen during these hearings, Hollowell said.
The Michigan legislature will hold legislative hearings in the coming months. Counsel for recommendations will be considered as a single bill or a set of laws, Hollowell said.
In 2007, the top five writers of private passenger automobile insurance in Michigan, according to AM Best Co. state / line product information, were: State Farm Group, with 18.3%, the Auto Club Group with 16.5%, Auto-Owners Insurance Group, with 9.1%, Progressive Insurance Group, with 8.1% and Hanover Insurance Group Property and Casualty Cos., with 7.9%.
(By Sean P. Carr, senior editor, BestWeek: Sean.Carr @ ambest.com)
6 February 2009
Copyright © 2009 LexisNexis, a division of Reed Elsevier Inc.. All rights reserved
Terms and Conditions Privacy Policy
5 February 2009 Thursday 05:10 PM EST
628 words
Michigan Considers Auto Rate Freeze, New surveillance for insurers
Sean P Carr
LANSING, Mich.
Michigan auto insurers are failing to cry after Gov. Jennifer Granholm called for a freeze on insurance rates while the state's insurance consumer advocate has published a report recommending new restrictions and controls for industry.
In his annual State of the State address, Granholm said auto insurers should freeze the rates on 12 months while the legislature considers reforms. Granholm said that if companies refuse, she will lead the Office of Financial and Insurance Regulation to "use all tools at its disposal to ensure affordable and fair to consumers in Michigan."
Consumer Insurance Advocate Butch Hollowell's report, "affordable insurance for all. A plan to protect Michigan consumers," recommends 10 steps to the supervision of the industry, including requiring prior approval of insurance rates, except that the use of insurance credit scoring, strengthening the authority of regulators to grant refunds to policyholders and the redefinition of "premium prices."
The 328-page report highlights the fact that Michigan drivers pay among the highest in the nation, while the insurance industry has increased rates 69% since 1991, while taking advantage of the quasi - lack of regulation for 30 years. "
But Ann Weber, regional manager and counsel for the Property Casualty Insurers Association of America, said the lawyer's report ignores the reasons why prices are as they are in Michigan. State insurance laws are "generous" for consumers, "she says. Michigan is the only state in the country which offers unlimited first-party medical benefits for claimants.
Also, while the State is the second highest collision insurance premium in the nation, this is due in part to the state of the mixture of no-fault, under collision coverage that pays for damage to vehicles regardless of blame, Weber said in a statement. The loss per collision of the insured vehicle in Michigan is the highest in the nation, which explains the higher than average premiums for collision.
"With the turmoil in financial markets, this is not the time for state government and decrees to announce radical changes to the system, which may create other adverse effects, such as to discourage firms competitors on the market, which will likely lead to higher insurance costs and prices, "said Weber.
"The industry to be unhappy with this is not a surprise," said Hollowell. "They have done very well over the past 30 years."
In recent years, the number of serious accidents has decreased, the number of applications has decreased and the amount paid out has also dropped, Hollowell said. "The only thing that is going on is profit."
David Snyder, Vice President and assistant general counsel for the American Insurance Association, said in a statement, "unless the governor can freeze medical, litigation, motor vehicle accidents and other costs, is simply anti-competitive, business and anti-anti - Gallery consumers. "
After being appointed to this position last year, Hollowell hosted a series of hearings across the state on the affordability of automobile insurance. The report reflects the concerns of consumers that have arisen during these hearings, Hollowell said.
The Michigan legislature will hold legislative hearings in the coming months. Counsel for recommendations will be considered as a single bill or a set of laws, Hollowell said.
In 2007, the top five writers of private passenger automobile insurance in Michigan, according to AM Best Co. state / line product information, were: State Farm Group, with 18.3%, the Auto Club Group with 16.5%, Auto-Owners Insurance Group, with 9.1%, Progressive Insurance Group, with 8.1% and Hanover Insurance Group Property and Casualty Cos., with 7.9%.
(By Sean P. Carr, senior editor, BestWeek: Sean.Carr @ ambest.com)
6 February 2009
Copyright © 2009 LexisNexis, a division of Reed Elsevier Inc.. All rights reserved
Terms and Conditions Privacy Policy
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