Search

Fight over COVID auto insurance data might set the stage for broader regulatory fight in Illinois - WGLT

jokbanga.blogspot.com

A consumer advocacy group says newly disclosed data show that auto insurers made excessive profits during the pandemic – and that it’s proof that Illinois needs to regulate the industry more tightly.

Insurers fought against the release of the COVID-era auto premium data, which was sought by a coalition of consumer groups and state lawmakers. They wanted to know how money insurers made when people started driving less due to COVID. The insurers – speaking through their trade groups – argued that the Illinois Department of Insurance’s request for the data was “neither supported nor sanctioned by statute or regulation.”

Ultimately, the insurers obliged, and the data was released July 1.

“It basically confirmed what we already knew: When you looked at the premiums these insurance companies took in, and compared that to their losses, and compared 2020 to 2019, they made big windfall profits,” said Abe Scarr, director of the Illinois PIRG (Public Interest Research Group). “Much higher than they would’ve needed in terms of profit just to stay where they were in 2019, which was a highly profitable year, by the way.”

Illinois PIRG says it’s preliminary analysis show “insurance companies could still owe Illinois car insurance customers $896 million in pandemic relief.” In looking at Bloomington-based State Farm and the three other largest companies, Illinois PIRG says they “charged customers $280 million more than needed to maintain their 2019 profitability, even after accounting for the $220 million they refunded customers in 2020.”

The Chicago-based American Property Casualty Insurance Association, an industry trade group, said Illinois PIRG is “incorrect in its analysis of what has occurred in Illinois’ auto insurance market as the COVID-19 pandemic swept across the country.”

“The data shows insurers took appropriate steps immediately following the COVID-19 pandemic shutdowns and issued more than $14 billion in premium reductions as miles driven declined. However, that decline was short-lived, and miles driven quickly rebounded to pre-pandemic levels,” APCI told WGLT in a statement.

State Farm says gave back about $2 billion in premium to auto customers, and also lowered premiums on average of 11% nationally (another $2.2 billion over six months).

“They gave a decent refund when compared to Allstate, their biggest competitor,” Scarr said. “So better, perhaps, but still not good enough in our opinion.”

The APCI group also says “instituting new premium givebacks now would be unwise as driving conditions have dramatically changed since the beginning of the pandemic.”

“The data shows that there are more fatalities, and inflationary pressures have forced the costs associated with medical care and repairing vehicles up sharply. These events are driving up the cost of insurance,” the association said.

The fight over the auto premium data might be a precursor to a broader tussle over how insurance companies are regulated in Illinois. When it released the COVID premium data, the Illinois Department of Insurance said it would be “pursuing legislation with members of the General Assembly to increase transparency and accountability in its work to regulate insurance companies.”

“We continue to demand transparency for consumers, and we will not allow companies to withhold information to serve their own interests instead of doing what’s best for Illinois insurance consumers,” said IDOI Director Dana Popish Severinghaus, who declined a request for a WGLT interview.

The Illinois Department of Insurance has less regulatory scope and power than similar agencies in other states, Scarr said. In many other states, regulators have to sign off on rate increase. In Illinois, all insurers have to do is notify the Department of Insurance, Scarr said.

One factor in that power dynamic is Illinois is home to corporate headquarters to two of the biggest insurers in the country: State Farm and Allstate.

“We all know that the industry is very powerful in Illinois,” Scarr said. “But no one’s really tried for at least a decade to challenge that and actually put the question on the table. So I think it’s worth it to see what kind of response we get.”

Scarr said Illinois PIRG would support IDOI’s efforts to clarify their legal authority to request and publish data obtained by insurers. Illinois PIRG would also like to see Illinois become a “prior approval” state for rate increases, giving regulators a chance to review rate hikes before they’re implemented, Scarr said. The group would also want to see state law changed to explicitly ban excessive or unfair rates, as other states have done, he said.

Adblock test (Why?)



"auto" - Google News
July 14, 2022 at 01:33AM
https://ift.tt/BrzMp73

Fight over COVID auto insurance data might set the stage for broader regulatory fight in Illinois - WGLT
"auto" - Google News
https://ift.tt/4952LIc
https://ift.tt/aFzrIk2

Bagikan Berita Ini

0 Response to "Fight over COVID auto insurance data might set the stage for broader regulatory fight in Illinois - WGLT"

Post a Comment

Powered by Blogger.