The Hartford is ahead of the pack working with the Insurance Department to “achieve a rate reduction that appropriately reflects its current claims payment experience.” Four other major insurers, Allstate, State Farm, Farmers and Safeco, were ordered on Wednesday by Garamendi to justify apparent excessive rates. This rate decrease will take effect in 30-60 days.
A remarkable 70% of premiums paid by customers remain with the insurers instead of going towards policyholder claims. The idea posited by some insurers that the extra premiums are needed to strengthen financial reserves was rebuffed by Garamendi, “These companies have very strong financial reserves. Therefore, they do not need to build surplus by maintaining such extraordinarily low loss ratios. I will not allow the insurance industry to charge excessive rates at the expense of consumers.”
I wrote about the details of a study conducted in May by the Insurance Department in a previous post. It seems Garamendi keeps his word and is trying to put more money in the pockets of consumers.
Actualy that is good news because it proves that someone is looking over the shoulders of the insurance companies. What I don't figure is though, how they are still in business. If you do not deliver a competative quote in the UK, you will not be in business very long as the market is so competative.
Mark
Posted by: Breakdown Insurance | November 6, 2007 1:51 PM | Permalink to Comment