advertisement
Not everyone agrees.
David Sampson, the chief executive of Property Casualty Insurers Association of America, a trade group, said the Consumer Federation is "misguided" in saying that a prior-approval system keeps down insurance rates.
"Ultimately, price controls reduce the number of insurers doing business in a state, reduce consumer choice and restrict market innovations," Sampson said. "In states with price controls rates are more subject to political manipulation with adverse consequences -- higher prices and fewer choices -- for consumers."
- Video: A hidden hybrid danger?
Overall, the 15 states that require insurers to receive approval for changes before they go into effect had the smallest rate increases, according to the report, while the states with less control had sharper rate increases.
"Many states do a poor job of ensuring that insurance rates are fair, that the regulator adequately reviews rates, that competition is vigorous, and that consumers are adequately involved in the ratemaking process," the report says.
More from MSN Money and MarketWatch
Federal regulation needed?
In March, Treasury Secretary Henry Paulson proposed a far-reaching regulatory blueprint that would create an optional federal charter for insurance -- a move the Consumer Federation opposes -- and would enable insurance companies to "opt out" of comprehensive consumer protections and state oversight, according to the National Association of Insurance Commissioners.Insurers are split on the proposal. Generally, large companies favor the idea of a federal regulator while smaller ones like the idea of sticking with the current state-based system. Few in Washington expect legislators to act on bills authorizing the new regulatory system this year.
| State average | 1989 | 2005 | % increase | State average | 1989 | 2005 | % increase |
|---|---|---|---|---|---|---|---|
California | $747.97 | $844.50 | 12.9 | Vermont | $423.43 | $698.74 | 65 |
New Jersey | $982.93 | $1,183.54 | 20.4 | Idaho | $348.31 | $582.99 | 67.4 |
Hawaii | $673.36 | $842.78 | 25.2 | Nevada | $586.60 | $982.56 | 67.5 |
New Hampshire | $609.13 | $791.71 | 30 | New York | $665.07 | $1,122.45 | 68.8 |
Pennsylvania | $646.03 | $849.14 | 31.4 | Mississippi | $440.80 | $744.84 | 69 |
Connecticut | $740.02 | $990.52 | 33.9 | Michigan | $550.84 | $930.79 | 69 |
Rhode Island | $725.82 | $1,059.13 | 45.9 | Oklahoma | $399.19 | $677.53 | 69.7 |
Maryland | $646.18 | $944.73 | 46.2 | Texas | $497.35 | $844.87 | 69.9 |
Illinois | $505.32 | $742.65 | 47 | Washington | $490.50 | $840.17 | 71.3 |
Georgia | $531.01 | $783.69 | 47.6 | Alaska | $560.27 | $961.72 | 71.7 |
Maine | $434.84 | $643.50 | 48 | Minnesota | $460.41 | $791.47 | 71.9 |
District of Columbia | $796.72 | $1,187.77 | 49.1 | Kansas | $340.76 | $590.29 | 73.2 |
Ohio | $447.73 | $668.93 | 49.4 | Florida | $610.21 | $1,063.36 | 74.3 |
South Carolina | $494.25 | $752.56 | 52.3 | Iowa | $315.02 | $555.04 | 76.2 |
Massachusetts | $728.39 | $1,112.73 | 52.8 | Delaware | $574.04 | $1,027.65 | 79 |
Indiana | $426.29 | $657.35 | 54.2 | Utah | $385.44 | $705.56 | 83.1 |
North Carolina | $388.00 | $602.20 | 55.2 | Louisiana | $571.96 | $1,076.09 | 88.1 |
Tennessee | $423.26 | $658.60 | 55.6 | Arkansas | $364.68 | $693.31 | 90.1 |
Wisconsin | $392.46 | $615.33 | 56.8 | North Dakota | $283.11 | $554.30 | 95.8 |
Oregon | $466.29 | $736.67 | 58 | West Virginia | $437.09 | $856.53 | 96 |
Alabama | $426.30 | $678.01 | 59 | Kentucky | $375.71 | $749.62 | 99.5 |
Arizona | $581.42 | $926.33 | 59.3 | Wyoming | $318.28 | $639.05 | 100.8 |
Virginia | $437.87 | $697.86 | 59.4 | Montana | $336.04 | $685.01 | 103.8 |
Missouri | $430.05 | $685.49 | 59.4 | South Dakota | $273.51 | $565.23 | 106.7 |
Colorado | $515.31 | $827.47 | 60.6 | Nebraska | $284.86 | $620.60 | 117.9 |
New Mexico | $443.76 | $727.35 | 63.9 | U.S. average | $551.95 | $829.17 | 50.2 |
This article was reported and written by Ruth Mantell for MarketWatch.
Published May 9, 2008
< previous | 1 | 2 |
Rate this Article
High
