The American Property Casualty Insurance Association (APCIA) recently released a report that concludes over-regulation impedes insurance markets
“Insurance markets function best when allowed to operate competitively, free from excessive price regulation,” said Robert Gordon, APCIA’s senior vice president, policy, research and international, in a statement. “As illustrated in the report, the evidence from multiple state case studies shows that while politically appealing, strict price controls ultimately harm the consumers they aim to protect.
“Regulatory rate suppression might be a sugar high in the short term, but in the long term it devastates the markets and the availability of insurance for consumers.”
The report, “Price Regulation and its Effects on Insurance Markets: Analysis and Case Studies,” is authored by insurance expert and University of Iowa professor of finance Dr. Martin F. Grace.
The report examines auto and property insurance across several states, including California, Florida, Massachusetts, New Jersey, and South Carolina, through case studies of rate-related legislative and regulatory actions to address market stability. The research reveals how insurance markets respond to various pressures, including inflation, natural disasters, and regulatory interventions – significantly impacting pricing, availability, and market stability.
Topics Trends Legislation
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