Five Small Auto Insurers Agree to Michigan Rate Freeze
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Copyright 2009 A.M. Best Company, Inc.All Rights Reserved BestWire
February 12, 2009 Thursday 04:40 PM EST
463 words
Five Small Auto Insurers Agree to Michigan Rate Freeze
Sean P Carr
LANSING, Mich.
While five automobile insurance writers have agreed to Michigan Gov. Jennifer Granholm's call for an auto insurance rate freeze, those insurers combined represent less than a 2% market share in the state.
In her Feb. 3 State of the State address, Granholm called on auto insurers to freeze rates for 12 months while the legislature considers comprehensive reforms. Granholm said if companies refuse, she will direct the Office of Financial and Insurance Regulation to "use every administrative tool at its disposal to assure fair and affordable rates for Michigan consumers" (BestWire, Feb. 5, 2009).
A week later, the state's Office of Financial and Insurance Regulation announced five insurance companies have agreed to freeze rates: American International South Insurance Co., Electric Insurance Co., IDS Property Casualty Insurance Co., Merchants Mutual Insurance Co. and Wolverine Mutual Insurance Co.
Combined, these companies account for less than 2% of market share for private passenger auto insurance in Michigan, according to A.M. Best Co. state/line product information for 2007, the most recent year available. American International South was the highest-ranked insurer, at 17th place, but only when counted as part of American International Group Inc.
"It's such a small percentage of the market share. It doesn't look like it will have an impact on the market," said Jeffrey Junkas, director of public affairs, Midwest region, for the American Insurance Association.
Pressure from the governor in the form of the "anti-business threat" of a regulatory crackdown, is an unfair attack on the state's insurance industry, Junkas said.
Granholm's address came on the same day the state's insurance consumer advocate released a report recommending significant new restrictions and oversight for the industry, including requiring prior approval of insurance rates, barring the use of credit-based insurance scoring, strengthening the authority of regulators to award refunds to policyholders and redefining premium affordability (BestWire, Feb. 5, 2009).
State Farm, Michigan's largest auto insurer by market share, is studying the advocate's report and evaluating its options; it will decide on whether and how to honor the governor's request by March 1, spokeswoman Angie Rinock said.
Michigan officials did not immediately return messages seeking comment.
The top five writers of private passenger auto insurance in Michigan, according to 2007 A.M. Best Co. state/line product information, were: State Farm Group, with 18.3%; 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 associate editor, BestWeek: Sean.Carr@ambest.com)
February 13, 2009
Copyright © 2009 LexisNexis, a division of Reed Elsevier Inc. All Rights Reserved.
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February 12, 2009 Thursday 04:40 PM EST
463 words
Five Small Auto Insurers Agree to Michigan Rate Freeze
Sean P Carr
LANSING, Mich.
While five automobile insurance writers have agreed to Michigan Gov. Jennifer Granholm's call for an auto insurance rate freeze, those insurers combined represent less than a 2% market share in the state.
In her Feb. 3 State of the State address, Granholm called on auto insurers to freeze rates for 12 months while the legislature considers comprehensive reforms. Granholm said if companies refuse, she will direct the Office of Financial and Insurance Regulation to "use every administrative tool at its disposal to assure fair and affordable rates for Michigan consumers" (BestWire, Feb. 5, 2009).
A week later, the state's Office of Financial and Insurance Regulation announced five insurance companies have agreed to freeze rates: American International South Insurance Co., Electric Insurance Co., IDS Property Casualty Insurance Co., Merchants Mutual Insurance Co. and Wolverine Mutual Insurance Co.
Combined, these companies account for less than 2% of market share for private passenger auto insurance in Michigan, according to A.M. Best Co. state/line product information for 2007, the most recent year available. American International South was the highest-ranked insurer, at 17th place, but only when counted as part of American International Group Inc.
"It's such a small percentage of the market share. It doesn't look like it will have an impact on the market," said Jeffrey Junkas, director of public affairs, Midwest region, for the American Insurance Association.
Pressure from the governor in the form of the "anti-business threat" of a regulatory crackdown, is an unfair attack on the state's insurance industry, Junkas said.
Granholm's address came on the same day the state's insurance consumer advocate released a report recommending significant new restrictions and oversight for the industry, including requiring prior approval of insurance rates, barring the use of credit-based insurance scoring, strengthening the authority of regulators to award refunds to policyholders and redefining premium affordability (BestWire, Feb. 5, 2009).
State Farm, Michigan's largest auto insurer by market share, is studying the advocate's report and evaluating its options; it will decide on whether and how to honor the governor's request by March 1, spokeswoman Angie Rinock said.
Michigan officials did not immediately return messages seeking comment.
The top five writers of private passenger auto insurance in Michigan, according to 2007 A.M. Best Co. state/line product information, were: State Farm Group, with 18.3%; 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 associate editor, BestWeek: Sean.Carr@ambest.com)
February 13, 2009
Copyright © 2009 LexisNexis, a division of Reed Elsevier Inc. All Rights Reserved.
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