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A Mixed Bag — R Street Rates Insurance Commissioners

Posted By Administration, Tuesday, February 6, 2018

R Street Institutes 2017 Insurance Regulation Report Card is out. This is the report card’s sixth year. Just one state — Vermont — gets an A+. It does so for the fourth straight year. Three PIA Western Alliance states — Arizona, Idaho and Nevada — earned A grades.

And three PIA Western Alliance states — Alaska, California, Montana — earned Ds and Alaska is a D- and close to an F.

Delaware has the nation’s lowest score with an F. It edged out North Carolina who’s had that distinction for the last two years. Also getting an F but not as low a score as Delaware are North Carolina, Louisiana and Massachusetts.

The report card is issued to answer three basic questions:

  How free are consumers to choose the insurance products they want?

  How free are insurers to provide the insurance products consumers want?

  How effectively are states discharging their duties to monitor insurer solvency and foster competitive, private insurance markets?

 

The report said, “On balance, we believe states have done an effective job of encouraging competition and, at least since the broad adoption of risk-based capital requirements in the 1990s, of ensuring solvency. As a whole and in most individual states, U.S. personal lines markets are not overly concentrated. Insolvencies are relatively rare and, through the runoff process and guaranty fund protections enacted in nearly every state, generally quite manageable.”

When it comes to regulation, the report said, “As discussed in greater depth in the state-by-state review section, 2017 also saw a significant effort to liberalize rate controls for commercial property and casualty insurance lines in Missouri and a successful effort to do so in Oregon. On the other side of the ledger, Delaware passed legislation that will impose among the most onerous regulatory frameworks in the country, and Illinois—long among the most free-market insurance environments in the nation — was spared from the introduction of stringent controls on its workers’ compensation market only by the Legislature’s failure to overturn Gov. Bruce Rauner’s veto.

Overall, the R Street report says the regulatory landscape is changing and you can find out why by clicking here to read the whole report.

Here are the grades and the strengths and weaknesses of the insurance regulators in the nine PIA Western Alliance states:

 

Alaska

2017 grade: D-

2016 grade: D

Score: 54.3

Rank: 45

Strengths: No regulatory surplus. No runoff obligations. Small Residual markets.

Weakness: High tax and fee burden. Concentrated auto market. Excess auto profits. Concentrated homeowners market.

 

Arizona

2017 grade: A

2016 grade: A

Score: 77.2

Rank: 2

Strengths: Low politicization. No regulatory surplus. Broad underwriting freedom.

Weakness: High tax and fee burden. Thinly capitalized markets.

 

California

2017 grade: D

2016 grade: D

Score: 54.0

Rank: 46

Strengths: Competitive auto market.

Weakness: Highly politicized. Desk drawer rules. Little underwriting freedom.

 

Idaho

2017 grade: A

2016 grade: A

Score: 75.4

Rank: 3

Strengths: Low politicization. No runoff obligations. Competitive auto market. Broad underwriting freedom.

Weakness: Large workers' compensation fund.

 

Montana

2017 grade: D

2016 grade: D

Score: 54.5

Rank: 43 (tie)

Strengths: No special strengths.

Weakness: High tax and fee burden. Very high homeowners loss ratio. Large workers' compensation fund. Weakness: High tax and fee burden. Very high homeowners loss ratio. Large workers' compensation fund.

 

Nevada

2017 grade: A

2016 grade: B+

Score: 74.9

Rank: 4 (tie)

Strengths: No regulatory surplus. Low tax and fee burden. Ahead on financial exams. Small residual market.

Weakness: No special weaknesses.

 

New Mexico

2017 grade: B-

2016 grade: B

Score: 66.9

Rank: 28

Strengths: No runoff obligations.

Weakness: Large regulatory surplus. High tax and fee burden. Thinly capitalized markets.

 

Oregon

2017 grade: B+

2016 grade: B+

Score: 72.0

Rank: 10

Strengths: No regulatory surplus. Low tax and fee burden.

Weakness: Large workers' compensation fund.

 

Washington

2017 grade: C

2016 grade: C-

Score: 61.7

Rank: 35

Strengths: Ahead on financial exams. Competitive auto market

Weakness: Monopoly workers' compensation fund. Little underwriting freedom.

 

Source link: R Street

Tags:  A Mixed Bag — R Street Rates Insurance Commissione  Insurance Content  Insurance Industry  Insurance News  Weekly Industry News 

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