I think if Ms Coakley will personally guarantee that there will not be hurricane damage to the extent assumed in the “undisclosed models” they should back off.
Those darn models with their averages of hundreds of thousands of simulated storms! Maybe they should get rid of the model and just base the hurricane portion of the rate on the number of hurricanes that hit Massachusetts in the past 2 years.
has anyone thought, does she have a home in those areas where the rate is going up? um…. she is trying to protect her ownself maybe? there are more things in the state of mass that needs her attention instead of insurance rates…. speaking of profit?! if it’s the state insurance, why do they make that much in profit to begin with? what do they do w/the excess? is it being used elsewhere in the state? or is the money collecting interests to be used later in the state or for an actual claim?
The Fair Plan’s profits go back to insurers writing homeowners in the state, based on market share (same way they would assess insurers if they ran a deficit). The insurance companies are pushing the Fair Plan to raise their coastal rates to make them more expensive than what’s available in the voluntary market. Problem is, if you aren’t pressured by AM Best to buy lots of reinsurance, and you look at your actual results in the coastal areas, the insurance companies & the Fair Plan have been making tons of money there. The AG has also called for oversight of the modeling companies for this reason. At the end of the day, the Fair Plan is cheaper than the voluntary market and that’s where the business ends up.
She is a Elected official and Tax payer in the state who else has right to stand up for the tax payers.
Oh wait let the insurance Companies and the insurance dept raise your rates based on models not facts.
The question is where will they stop & whose next ?
Fair Plans were originally set up to be NON-PROFIT insurers of last resort. The Federal Government offered low cost riot reinsurance backed by the US Government. Fair Plans turned down the reinsurance in an effort to avoid regulation and over the past several decades have taken control of the industry.
I testified at the MA Fair Plan hearing last Thursday, this was the outline of my testimony:
The original hearing date was 12/19/11 – less than a week before the Holidays. Citizens for Homeowner Insurance reform and I requested the AG ask for a postponement and the Division of Insurance agreed to postpone the hearing.
The 1500 or so page rate filing has a table of contents with NO page numbers which is intentionally obstructive to anyone who needs to review the filing. This is the second rate hearing that we complained about the lack of page numbers on the rate filing table of contents.
The MA Gov website lists only 11 major storms from 1635 to 1991 to hit New England – that’s 11 major storms in 376 years!
Hurricane Modeling is used to circumvent the regulatory process by outsourcing modeling and then calling the data “proprietary”. If the Fair Plan doesn’t want to disclose hurricane modeling data to regulators they should not be allowed to use hurricane modeling data in their rate filing-period.
The hurricane modeling companies are owned or controlled by the insurance industry. AIR is owned by ISO which is the Insurance Service Office. RMS is controlled by former reinsurance insiders. There is absolutely NO objectivity in the modeling.
MPIUA lobbied for a Bill filed in 2003 that removed the rate caps in Fair Plan “Large Share Territories”. The Bills filed eventually became Chapter 436 of the Acts of 2004. Once the Bill was in the Legislative pipeline, companies like the Andover Group began to systematically non-renew coastal homeowners. The Andover Group alone non-renewed 14,000 homeowners on the Cape and Islands. By the time Mitt Romney signed the Bill into law, thousands and thousands of coastal homeowners had no choice but to go to the Fair Plan for coverage.
Donald Vose was and still is a Vice President of the Andover Group
Donald Vose was and still is a Vice President of the MA Fair Plan Board of Directors
The Andover Group is just one example of a company which non-renewed large numbers of coastal homeowners while their executives were and are on the MA Fair Plan Board of Directors.
Several State Legislators were so outraged that John Golembeski mislead them about the intent and effect of Chapter 436 of the Acts of 2004 that they filed a Brief of Amici Curiae in the Supreme Court Case of Suffolk County No. SJC 09966 The Attorney General vs. The Division of Insurance:
Up until November 2004, the MA Fair Plan had no record of paying lobbyists. Chapter 436 of the Acts of 2004 was signed into law in December 2004 and all of a sudden the MA Fair Plan has lobbying expenses:
I challenge anyone reading this article to disprove my theory that the insurance industry created the Massachusetts coastal homeowner insurance crisis through collusion which in any other industry would be criminal activity. As I testified at the MA Fair Plan hearing, if the insurance industry wasn’t exempt from Anti-Trust laws, last Thursday we would’ve been at a criminal trial of the key players who created the coastal homeowner insurance crisis-not a rate filing hearing.
Jane Logan, CPCU
MA Insurance Broker and MA Fair Plan policyholder
Jane;
Thank you for your thoughtful comments. One question, if the insurance companies themselves don’t believe the modeling data (which is inherant in your conspiracy thesis), why wouldn’t they just write the business voluntarily and make more money?
There are a few obvious reasons why the carriers would rather write coverage through the MA Fair Plan:
1. The commission paid to agents is 12% instead of the higher commission paid on voluntary policies.
2. There is no contingent commission paid to agents.
3. Policy coverage is often inferior as the MA Fair Plan uses different policy form edition dates than most voluntary carriers.
4. There are no stockholders to share the profit although I admit I don’t know how the participating companies handle their share of the profit in their accounting.
5. Reinsurance is an important piece of the puzzle and since reinsurance is a global industry their rates are outside the reach of state regulators. There used to be several reinsurance carriers domiciled in the US, now there are few, if any – they’ve all moved off-shore outside the reach of regulators and tax collectors. Just like carriers blame high rates on the hurricane modeling companies they control, they also blame high rates on the cost of reinsurance. Keep in mind lots of domestic carriers also sell reinsurance so using reinsurance is just another way to circumvent regulation.
I’ve spent eight years working on this issue and it’s extremely difficult to get information. MA Fair Plan “Representative of the Public” Board Members are under a gag order from MA Fair Plan President John Golembeski NOT to speak to members of the public. In preparation for the public comments on the rate filing, I called every single Board member who supposedly represents the public and every single one of them told me they’re not allowed talk to the public and I should call John Golembeski. This may come as a shock, but Golembeski won’t take my calls and he didn’t even have the courage to appear at the public comments start of the rate hearing on 1/19/12.
I’m sure there are many more benefits to the carriers to write coverage through the MA Fair Plan, but since I’m not a forensic accountant and it’s difficult, if not impossible to get records, the research is difficult.
Difficult is not impossible so I’ll continue researching and see what I can find.
I think if Ms Coakley will personally guarantee that there will not be hurricane damage to the extent assumed in the “undisclosed models” they should back off.
Those darn models with their averages of hundreds of thousands of simulated storms! Maybe they should get rid of the model and just base the hurricane portion of the rate on the number of hurricanes that hit Massachusetts in the past 2 years.
There I fixed it.
What is an AG doing in an insurance matter before the insurance commissioner? Is it an election year?
I was wondering also what the AG has to do with it?And in NJ the companies are asking for 14.1 percent increases and no one is up in arms about it!
has anyone thought, does she have a home in those areas where the rate is going up? um…. she is trying to protect her ownself maybe? there are more things in the state of mass that needs her attention instead of insurance rates…. speaking of profit?! if it’s the state insurance, why do they make that much in profit to begin with? what do they do w/the excess? is it being used elsewhere in the state? or is the money collecting interests to be used later in the state or for an actual claim?
The Fair Plan’s profits go back to insurers writing homeowners in the state, based on market share (same way they would assess insurers if they ran a deficit). The insurance companies are pushing the Fair Plan to raise their coastal rates to make them more expensive than what’s available in the voluntary market. Problem is, if you aren’t pressured by AM Best to buy lots of reinsurance, and you look at your actual results in the coastal areas, the insurance companies & the Fair Plan have been making tons of money there. The AG has also called for oversight of the modeling companies for this reason. At the end of the day, the Fair Plan is cheaper than the voluntary market and that’s where the business ends up.
She is a Elected official and Tax payer in the state who else has right to stand up for the tax payers.
Oh wait let the insurance Companies and the insurance dept raise your rates based on models not facts.
The question is where will they stop & whose next ?
That’s right. Silly models. A hurricane will never hit New England!
oh no! let hurrican IRENE come again! um… it’s not like the 100 yr flood…
Hmm…a lawyer calling an insurance carrier excessive.
I would like to see her public renouncement of the Trial Laywers Association as well.
What office is she running for now?
The Attorney General is 100% correct.
Fair Plans were originally set up to be NON-PROFIT insurers of last resort. The Federal Government offered low cost riot reinsurance backed by the US Government. Fair Plans turned down the reinsurance in an effort to avoid regulation and over the past several decades have taken control of the industry.
I testified at the MA Fair Plan hearing last Thursday, this was the outline of my testimony:
The original hearing date was 12/19/11 – less than a week before the Holidays. Citizens for Homeowner Insurance reform and I requested the AG ask for a postponement and the Division of Insurance agreed to postpone the hearing.
The 1500 or so page rate filing has a table of contents with NO page numbers which is intentionally obstructive to anyone who needs to review the filing. This is the second rate hearing that we complained about the lack of page numbers on the rate filing table of contents.
The MA Gov website lists only 11 major storms from 1635 to 1991 to hit New England – that’s 11 major storms in 376 years!
Hurricane Modeling is used to circumvent the regulatory process by outsourcing modeling and then calling the data “proprietary”. If the Fair Plan doesn’t want to disclose hurricane modeling data to regulators they should not be allowed to use hurricane modeling data in their rate filing-period.
The hurricane modeling companies are owned or controlled by the insurance industry. AIR is owned by ISO which is the Insurance Service Office. RMS is controlled by former reinsurance insiders. There is absolutely NO objectivity in the modeling.
MPIUA lobbied for a Bill filed in 2003 that removed the rate caps in Fair Plan “Large Share Territories”. The Bills filed eventually became Chapter 436 of the Acts of 2004. Once the Bill was in the Legislative pipeline, companies like the Andover Group began to systematically non-renew coastal homeowners. The Andover Group alone non-renewed 14,000 homeowners on the Cape and Islands. By the time Mitt Romney signed the Bill into law, thousands and thousands of coastal homeowners had no choice but to go to the Fair Plan for coverage.
Donald Vose was and still is a Vice President of the Andover Group
Donald Vose was and still is a Vice President of the MA Fair Plan Board of Directors
The Andover Group is just one example of a company which non-renewed large numbers of coastal homeowners while their executives were and are on the MA Fair Plan Board of Directors.
Several State Legislators were so outraged that John Golembeski mislead them about the intent and effect of Chapter 436 of the Acts of 2004 that they filed a Brief of Amici Curiae in the Supreme Court Case of Suffolk County No. SJC 09966 The Attorney General vs. The Division of Insurance:
http://www.tnrta.org/docs/MPIUA-Amicus-Final.pdf
Up until November 2004, the MA Fair Plan had no record of paying lobbyists. Chapter 436 of the Acts of 2004 was signed into law in December 2004 and all of a sudden the MA Fair Plan has lobbying expenses:
2005 $66,124
2006 $66,000
2007 $72,000
2008 $72,225
2009 $72,200
2010 $74,730
2011 $84,050
John Golembeski, President of the MA Fair Plan and their Attorney, Robert C. Tommasino are also paid lobbying fees:
http://www.sec.state.ma.us/LobbyistPublicSearch/Summary.aspx?
PeriodId=2011&RefId=2388
John Golembeski’s son owns one and the most often used property inspection company hired by the MA Fair Plan-RSG & Associates, LLC:
http://corp.sec.state.ma.us/corp/corpsearch/CorpSearchSummary.asp?ReadFromDB=True&UpdateAllowed=&FEIN=043505298
John Golembeski is also on the Board of Directors for PIPSO – Property Insurance Plans Service Office:
http://corp.sec.state.ma.us/corp/corpsearch/get_pdf.asp?pdftype=.pdf
I challenge anyone reading this article to disprove my theory that the insurance industry created the Massachusetts coastal homeowner insurance crisis through collusion which in any other industry would be criminal activity. As I testified at the MA Fair Plan hearing, if the insurance industry wasn’t exempt from Anti-Trust laws, last Thursday we would’ve been at a criminal trial of the key players who created the coastal homeowner insurance crisis-not a rate filing hearing.
Jane Logan, CPCU
MA Insurance Broker and MA Fair Plan policyholder
janelogan31@hotmail.com
Jane;
Thank you for your thoughtful comments. One question, if the insurance companies themselves don’t believe the modeling data (which is inherant in your conspiracy thesis), why wouldn’t they just write the business voluntarily and make more money?
Jeff:
There are a few obvious reasons why the carriers would rather write coverage through the MA Fair Plan:
1. The commission paid to agents is 12% instead of the higher commission paid on voluntary policies.
2. There is no contingent commission paid to agents.
3. Policy coverage is often inferior as the MA Fair Plan uses different policy form edition dates than most voluntary carriers.
4. There are no stockholders to share the profit although I admit I don’t know how the participating companies handle their share of the profit in their accounting.
5. Reinsurance is an important piece of the puzzle and since reinsurance is a global industry their rates are outside the reach of state regulators. There used to be several reinsurance carriers domiciled in the US, now there are few, if any – they’ve all moved off-shore outside the reach of regulators and tax collectors. Just like carriers blame high rates on the hurricane modeling companies they control, they also blame high rates on the cost of reinsurance. Keep in mind lots of domestic carriers also sell reinsurance so using reinsurance is just another way to circumvent regulation.
I’ve spent eight years working on this issue and it’s extremely difficult to get information. MA Fair Plan “Representative of the Public” Board Members are under a gag order from MA Fair Plan President John Golembeski NOT to speak to members of the public. In preparation for the public comments on the rate filing, I called every single Board member who supposedly represents the public and every single one of them told me they’re not allowed talk to the public and I should call John Golembeski. This may come as a shock, but Golembeski won’t take my calls and he didn’t even have the courage to appear at the public comments start of the rate hearing on 1/19/12.
I’m sure there are many more benefits to the carriers to write coverage through the MA Fair Plan, but since I’m not a forensic accountant and it’s difficult, if not impossible to get records, the research is difficult.
Difficult is not impossible so I’ll continue researching and see what I can find.