Seems all carriers will have to refile their rates to figure this out since most are not making a profit in the auto market at this time. Also a bit challenging I am sure to figure out the savings from the tax break when you have not even earned it yet.
The ol ‘Commish is at it again in his bid for higher office. So rather then let the market dictate carriers prices, he has to “force” them to do the right thing.
Don’t ya just hate it when the DOi is run by an elected pol who isn’t really knowledable about insurance but rather is another hack looking for the next gravy train.
All hail the Soviet Socialist Repbulik of Kalifornia!
In fairness, the people of California should dump the unfunded pension liabilities back on the Democrats who voted in big pensions for government workers, but didn’t bother to fund them properly.
Any noble, honest liberals left in California who want to volunteer? (I expect the answer to be “no”.)
The taxation of future assumed profits appears premature! There are of many “no control” variables that determine eventual profit or loss after claims, expenses are paid each year. Is the CA DOI going to tell insurance companies how and what they are allowed to invest their reserves which impact on profits too?
We really admire those carriers that are long term in focus that have reserve to meet claims over sustained period in auto and other lines of business in CA. It feels like micromanagement by the CA DOI based on speculation again.
re: “Is the CA DOI going to tell insurance companies how and what they are allowed to invest their reserves which impact on profits too?”
Is that tongue-in-cheek? Commandant Jones already tells CA domiciles what they can’t invest in. No ties to Iran! No oil, gas and coal or utilities that rely on oil, gas or coal!
Interesting timing considering the demise of Access, who he let write tons of auto business in California after Access General totally burned Harleysville. He’s just trying to deflect blame by making it sound like he doesn’t 100% control the rates insurers charge in California. Does he have plans to go after Texas or Georgia to pay some of the claims CIGA is gonna have to cover?
Doug Jones is definitely king of DoI overreach, but there is at least some sense in this rule, regardless of whether you like it or not:
Rates are developed using combined loss ratio targets, target profit margins, commissions, and expenses. One of these expenses is tax liability. If all carriers built their rates based on a 35% rate but will only be charged a 21% rate from here on out, their numbers would be grossly out of whack.
This will be a very temporary problem for multi-million and billion-dollar companies, who will work harder to refile rates immediately, rather than sit on their hands and overcollect tons of premium.
Seems all carriers will have to refile their rates to figure this out since most are not making a profit in the auto market at this time. Also a bit challenging I am sure to figure out the savings from the tax break when you have not even earned it yet.
The ol ‘Commish is at it again in his bid for higher office. So rather then let the market dictate carriers prices, he has to “force” them to do the right thing.
Don’t ya just hate it when the DOi is run by an elected pol who isn’t really knowledable about insurance but rather is another hack looking for the next gravy train.
All hail the Soviet Socialist Repbulik of Kalifornia!
In fairness, the people of California should dump the unfunded pension liabilities back on the Democrats who voted in big pensions for government workers, but didn’t bother to fund them properly.
Any noble, honest liberals left in California who want to volunteer? (I expect the answer to be “no”.)
The taxation of future assumed profits appears premature! There are of many “no control” variables that determine eventual profit or loss after claims, expenses are paid each year. Is the CA DOI going to tell insurance companies how and what they are allowed to invest their reserves which impact on profits too?
We really admire those carriers that are long term in focus that have reserve to meet claims over sustained period in auto and other lines of business in CA. It feels like micromanagement by the CA DOI based on speculation again.
re: “Is the CA DOI going to tell insurance companies how and what they are allowed to invest their reserves which impact on profits too?”
Is that tongue-in-cheek? Commandant Jones already tells CA domiciles what they can’t invest in. No ties to Iran! No oil, gas and coal or utilities that rely on oil, gas or coal!
Ok! Can insurance companies recoup auto and fire losses from the state when they fail to charge enough premium? California is an utter trainwreck
Interesting timing considering the demise of Access, who he let write tons of auto business in California after Access General totally burned Harleysville. He’s just trying to deflect blame by making it sound like he doesn’t 100% control the rates insurers charge in California. Does he have plans to go after Texas or Georgia to pay some of the claims CIGA is gonna have to cover?
Doug Jones is definitely king of DoI overreach, but there is at least some sense in this rule, regardless of whether you like it or not:
Rates are developed using combined loss ratio targets, target profit margins, commissions, and expenses. One of these expenses is tax liability. If all carriers built their rates based on a 35% rate but will only be charged a 21% rate from here on out, their numbers would be grossly out of whack.
This will be a very temporary problem for multi-million and billion-dollar companies, who will work harder to refile rates immediately, rather than sit on their hands and overcollect tons of premium.
Doug, Dave, whatever. At least Dave’s not here, man, after the next election. I’ve seen enough of his political grandstanding in the insurance arena.
It makes as much sense as raising your own State taxes to offset the “bonus” you are getting from the Federal tax cuts . . .
Shouldn’t the headline read “Republican tax cuts lower insurance premiums in California”