“I would say that the availability of insurance at reasonable rates continues to be a key challenge in the year 2002 and will be ongoing in the next year or two,” California Insurance Commissioner Harry Lowe stated.
Low recently addressed the attendees of the 57 Annual Meeting of the National Association of Independent Insurers (NAII), stressing the importance of building strong relationships with all the stakeholders in the insurance industry, and commended the NAII’s efforts in supporting state regulation.
“Your recent affiliation with ACIC is starting to change the landscape of California, and yet again, we will be looking forward to continuing this working with relationship with you on those issues that affect the consumers in the industry,” Low said.
Low stated that as a regulator, he strived to maintain a fair and balanced regulatory system. He discussed the many accomplishments of the California Department of Insurance (CDI) in the wake of the Quackenbush scandal.
“At the very start of my administration, my goal was to make our California Department of Insurance one of the best in the nation. I believe that we have succeeded to a large degree. We’ve avoided being political on issues, we’ve followed the letter of the law, and we’ve done everything we can to fairly and impartially enforce the law.”
“In the closing two months of this administration, we still remain focused on our goals. We’re working very hard right through the very end, and we’re trying to implement those improvements that we believe will lead the incoming administration to a stronger, more effective and efficient Department of Insurance for California,” Low said.
Low noted the concern many insurance companies hold over the issue of too much regulation over the industry, saying that many insurers vew it as the thorn in their side. “We must remember,” he said, “that there’s usually some good reason for the regulation.”
Low supported his assertion with examples of the many problems that are plaguing the California market today.
The lack of availability of homeowners insurance, he said, is the number one complaint from consumers who call in to the consumer hotline. The problem has become so severe that the California Fair Plan reports receiving up to 300 applications a day for homeowners insurance alone, with 900 inquiries for availability.
The problems stem not only from a number of water damage claims, but also from the use of Comprehensive Loss Underwriting Exchange Data (CLUE) and “it’s influence on consumers’ ability to secure homeowners insurance through the general market,” Low said.
The long list of issues that will continue to impact the property/casualty industry in California includes workers’ compensation, construction defects, medical malpractice and D&O liability.
“I believe that fair and effective regulation, when its administered in a very transparent fashion, is a very necessary function of good government,” Low added.
In addition to the many accomplishments of the CDI thus far, Low has lined up approximately 35 regulatory packages that are waiting for approval. He said that the CDI has “also made great strides in bringing consistency in the enforcement practices, and particularly in market conduct examinations.”
Low proposed the regulations will be in effect by the end of the year in regards to the uniformity of methods for Market Conduct Examinations.
In the area of financial surveillance, Low established an “Early Warning Team,” which consists of staff from financial surveillance, rate regulation, fraud, conservation and liquidation, strategic planning, policy and research and the legal division.
“These skilled professionals are charged with the early identification and monitoring of insurers whose financial conditions may require corrective action,” he said. “We closely monitor those that we think are in trouble… and we urge corrective actions… with the goal towards preventing conservation and liquidation… and we have been very successful.”
Low further spoke of the CDI’s efforts to improve services for agents and brokers.
“To that end, we’ve launched two important licensing services, utilizing information technology. Licenses now can be renewed on our Web site, decreasing processing time to as little as 48 hours. Additionally, we now offer online licensing examinations at four CDI locations without the state of California,” he said.
“Since implementing this system and having online examinations in August of this year, more than 4,00 people have taken the licensing exam online in these four locations,” Low added. Agents and brokers are able to receive their results and license immediately following the exam.
“In short, our administration has been very busy meeting the objectives we established when we took the reins of the Department two years ago,” Low concluded.
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