Mass. Economic Warning: Insurance Market Short on Capital

By | January 27, 2006

  • January 27, 2006 at 7:14 am
    Jane Logan, CPCU says:
    Like or Dislike:
    Thumb up 0
    Thumb down 0

    I was pleased to finally see Boston recognized as a significant coastal exposure.

    -Jane Logan, CPCU
    Cape Cod, MA
    harborsidejl@hotmail.com

  • January 27, 2006 at 2:38 am
    Mike says:
    Like or Dislike:
    Thumb up 0
    Thumb down 0

    This article is pretty interesting – it looks like graft, corruption and Machiavellian legislative moves can\’t actually defeat the laws of economics! Past Massachussets legislators have sowed the bitter harvest that today\’s policyholders must reap.

    Not surprisingly, if you create a system where home domiciled insurers are able to consistently shift bad risks onto out-of-state insurers (i.e., suckers), as many of those companies are going to stop writing business in your state.

    Also, I thought part of the insurance department\’s job in setting rates was to ensure that rates are adequate to provide for coverage of loss as well as neeeded surplus. Why hasn\’t the Dept. of Insurance mandated that rates be high enough to both pay claims and ensure surplus adequacy? Sounds like the other states have done that. Could it be that years of inadequate rates, kept low by the administration to win votes, has finally depleted the state\’s surplus? My parents always told me there\’s no such thing as a free lunch; eventually someone has to pay the bill. Maybe it\’s time the Mass. legislature started realizing that.

    Mitt Romney seems to get it.

  • January 29, 2006 at 7:36 am
    John Alberts CPCU says:
    Like or Dislike:
    Thumb up 0
    Thumb down 0

    I am delighted to see a regulator taking a position that recognizes that rates have to be adequate and surplus is a critical element of how to evaluate the market. Most of the time these short term political appointees (or elected persons using the position as a stopping point on the way to a higher office) only address \”affordability.\”

  • January 30, 2006 at 3:37 am
    Doug says:
    Like or Dislike:
    Thumb up 0
    Thumb down 0

    How is getting Geico and Progressive into Massachusetts going to help the homeowners\’ situation? Neither of them sell homeowners. Furthermore, Allstate and State Farm — whose reserves the Commsissioner apparently doesn\’t include in her calculations — already sell homeowners in Mass but not on the coast. Bowler seriously underestimates the size of the surplus — which is more than $110 billion — as a sop to out of state companies so she can try to get auto reform passed. She should deal with them as separate, and different, issues.

  • January 31, 2006 at 6:50 am
    Mr. Hankie says:
    Like or Dislike:
    Thumb up 0
    Thumb down 0

    After watching that embarrassing and pathetic tirade yesterday against Alito nothing would surprise me about this vile little state. Why would they worry about minor things like a companies ability to pay claims when they have a strong and ethical leader like uncle ted to look after them.

    Any state that consistently elects something like this certainly has bigger issues than insurance.



Add a Comment

Your email address will not be published. Required fields are marked *

*