Thank you for sharing!

Your article was successfully shared with the contacts you provided.

NEW YORK – From complaints about homeowner insurance and toxic mold coverage, to the lack of health insurance coverage nationwide, many say that it is past time for insurance reform. A group of more than 60 consumer organizations around the country agree and have joined forces to show they are fed up with the price gouging. Founded by Consumer Federation of America Director of Insurance J. Robert Hunter, the new organization named Americans for Insurance Reform hopes to have a stronger voice and build a central database of information on insurance developments in every state. “The action comes as both the U.S. Senate and the Nevada legislature are each set to vote on horribly misguided and cruel legislation that targets the wrong culprit-injured patients-rather than insurance companies in an effort to lower insurance rates for certain doctors,” said AIR spokesperson Joanne Doroshow. According to the organization, insurance companies are overcompensating for substantial losses over the years including the most recent September 11 attacks by doubling prices for coverage. AIR has sent letters to each insurance commissioner stating, “We are appalled that insurers-whose own actions have created a `crisis’ in insurance affordability and availability for everyone from doctors and trauma centers to home owners and motorists – are blaming others for their own mismanagement.” The letter cites the insurance companies’ economic cycle, which is the result of pricing errors, as reason for current large rate hikes and strict underwriting restrictions. Similar crises occurred in the mid-`70s and the mid-`80s. The AIR letter asks state insurance commissioners to undertake 14 specific investigations, audits and reforms including the following: * An immediate freeze on medical malpractice and homeowner rates; * A full investigation of the high profitability of the insurance industry during much of the 1990s,and the extent to which today’s rate increases are an attempt to recoup money that insurers lost in the stock market or in other poorly-performing assets; * Annual audits to determine whether companies are engaging in questionable accounting practices and whether their business and investment practices present unacceptable financial risks for insurance consumers and shareholders; * Regulation of the excessive prices being charged by insurers; and * Communication to state legislators that the solution to prevent shock rate increases such as those we are now experiencing is insurance reform, not restrictions on people’s right to be compensated fully for their claims. According to Hunter, insurers are also raising prices indirectly through higher deductibles and generally reducing coverage. Locally, small businesses in lower Manhattan have been complaining that insurance companies are refusing to renew basic coverage, essentially driving them out of business. As many of the policies in effect on September 11 start expiring small business owners grow more concerned. According to local business leaders, some companies are either not renewing policies; offering only partial coverage; or those offering full coverage do it but at as much as a 300% hike. According to New York Superintendent of Insurance Gregory Serio, his office is closely monitoring the situation and has urged small business owners to report any such behavior to his office. Insurers maintain that the prices reflect the cost of doing business in the world today where costs and risks are on the rise. The AIR asserts that insurance companies are spending big money and exerting all their influence on state and national legislators to change the legal system rather than focusing on real reforms. “The largely unregulated and anti-competitive insurance industry is responsible for the premium gouging which businesses, professionals and individuals experience.” “Consumers have had enough of the insurance industry blame game and the endless cycle and periodic crises that accompany it. Remedies that do not specifically address the insurance industry’s mismanagement will fail to stop these wild price gyrations in the future leaving America’s insurance consumers at risk every 10 to 15 years,” concluded the letter. [email protected]

Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.

Your access to unlimited CUTimes.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical CUTimes.com information including comprehensive product and service provider listings via the Marketplace Directory, CU Careers, resources from industry leaders, webcasts, and breaking news, analysis and more with our informative Newsletters.
  • Exclusive discounts on ALM and CU Times events.
  • Access to other award-winning ALM websites including Law.com and GlobeSt.com.

Already have an account?


Credit Union Times

Join Credit Union Times

Don’t miss crucial strategic and tactical information necessary to run your institution and better serve your members. Join Credit Union Times now!

  • Free unlimited access to Credit Union Times' trusted and independent team of experts for extensive industry news, conference coverage, people features, statistical analysis, and regulation and technology updates.
  • Exclusive discounts on ALM and Credit Union Times events.
  • Access to other award-winning ALM websites including TreasuryandRisk.com and Law.com.

Already have an account? Sign In Now
Join Credit Union Times
Live Chat

Copyright © 2022 ALM Media Properties, LLC. All Rights Reserved.