Insurance Availability Task Force Formed in Nebraska

Nebraska Department of Insurance Director, L. Tim Wagner announced the creation of an insurance availability task force, members of which are various insurance company representatives and insurance producers who will analyze issues relating to availability of insurance in the state.

During 2001, the department became aware of increasing insurance rates for certain types of insurance and of problems that many insurance agents were having in finding insurance carriers to accept applications for various types of insurance. Among other issues, the task force will review a number of insurance markets including homeowners insurance in Western Nebraska, medical professional liability insurance, insurance for agribusiness and liability insurance-some of the types that have been difficult to find or costly to obtain.

Particularly hard hit is medical professional liability insurance availability. The principal underwriter of this type of insurance in Nebraska has been St. Paul Insurance Company. That insurer is in the process of withdrawing from this market on a nationwide basis due to underwriting losses.

Traditionally, availability issues appear on a cyclical basis when economic factors such as investment income and availability of capital impact the price of insurance or reduce insurers desire to accept risk in the form of writing new policies. Such periodic occurrences are known in the insurance industry as “hard-market cycles.”

The current hard-market cycle has been compounded by a number of factors, including: economic factors associated with the current recession, severe wind and hail storm losses in Nebraska during 2001, strategic business decisions of some insurers to narrow their scope of operations, and the tremendous costs to insurers associated with the September 11, 2001 World Trade Center attack.

Director Wagner hopes that the newly formed task force will be able to develop recommendations aimed at reducing insurance costs and improving availability. Task force members include: John Smith, Joe Elliott, and John Bush from Omaha; Sam Thomas from North Platte; Cap Peterson from Wayne; Diane Lichty from Seward; and Tom Karlin, Irwin Nelson, and Jim Dobler from Lincoln.