Part of the job of the Department of Insurance is to make sure that insurance company rates are adequate.
When open rating started in 1995, the DOI allowed carriers to cut their rates 70% or more from the 1994 levels. There was no financial oversight to make sure that the rates (and subsequent premiums collected) were adequate to cover losses.
Even after the demise of Golden Eagle, the DOI did nothing to make sure rates were adequate.
Then the companies began to fall – Superior National, Paula, HIH, Fremont, and so on. CIGA was all but cleaned out. BTW, none of the CEO’s, Presidents, etc. of these companies that made the decision to slash rates to the bone have been held accountable (like those of Tyco, Enron, etc).
Finally, after the damage is done, the DOI steps in and says that we now need some regulation. Hello! Where were you from 1995 to 2001?
Is there any hope that the socialist in Sacramento will ever figure out that WC is a product priced to the cost of delivery?? That merely regulating rates does nothing to control the cost of delivery. The cost of delivery is determined by benefits (required by state regulators) paid.
They have a fear that if they ‘reform’ benefits the savings will not be passed on to employers. Again the nature of socialist is that they do not understand the free market dynamic. This dynamic dictates that competition delivers the lowest possible price for the quality and level of goods and services. Each of the companies, with the possible exception of SCIF, and its pricipals are paid based on their business results. It may seem that this is an incentive to charge more. In reality their results would be worse if they exceed what the competition charges.
If legislators were paid based on performance they would probably owe us money.
Interesting…very interesting.
Part of the job of the Department of Insurance is to make sure that insurance company rates are adequate.
When open rating started in 1995, the DOI allowed carriers to cut their rates 70% or more from the 1994 levels. There was no financial oversight to make sure that the rates (and subsequent premiums collected) were adequate to cover losses.
Even after the demise of Golden Eagle, the DOI did nothing to make sure rates were adequate.
Then the companies began to fall – Superior National, Paula, HIH, Fremont, and so on. CIGA was all but cleaned out. BTW, none of the CEO’s, Presidents, etc. of these companies that made the decision to slash rates to the bone have been held accountable (like those of Tyco, Enron, etc).
Finally, after the damage is done, the DOI steps in and says that we now need some regulation. Hello! Where were you from 1995 to 2001?
Is there any hope that the socialist in Sacramento will ever figure out that WC is a product priced to the cost of delivery?? That merely regulating rates does nothing to control the cost of delivery. The cost of delivery is determined by benefits (required by state regulators) paid.
They have a fear that if they ‘reform’ benefits the savings will not be passed on to employers. Again the nature of socialist is that they do not understand the free market dynamic. This dynamic dictates that competition delivers the lowest possible price for the quality and level of goods and services. Each of the companies, with the possible exception of SCIF, and its pricipals are paid based on their business results. It may seem that this is an incentive to charge more. In reality their results would be worse if they exceed what the competition charges.
If legislators were paid based on performance they would probably owe us money.