Washington, D.C.– Immediately following the November release of a thoroughly documented report on auto insurance regulation by Consumer Federation of America (CFA), the insurance industry issued, in rapid-response style, multiple critiques of the study. Today CFA’s Director of Insurance and report author, former Texas Insurance Commissioner Bob Hunter, will present the CFA study, “What Works: A Review of Auto Insurance Rate Regulation in America and How Best Practices Save Billions of Dollars,” to the National Association of Insurance Commissioners at their Auto Insurance (C/D) Study Group Conference Call and rebut the various claims of the industry.
“Rather than confront the facts, the insurance industry is throwing the kitchen sink at our report hoping to steer regulators, policymakers and the public away from the very compelling data that show how good regulation of insurance companies provides the best results for consumers by lowering rates and enhancing competition,” said Hunter.
The data reviewed by CFA show that California’s vigorous prior approval regime is the only system in the nation to have lowered motorists’ auto insurance expenditures over the past 25 years. According to CFA’s analysis, California motorists have saved more than $100 billion on auto insurance since the state’s regulatory system was installed by voter initiative in 1988. CFA concluded that Americans could save $350 billion over the next decade if every state were to adopt a system akin to California’s.
The full report is available for download at http://bit.ly/whatworks-fullreport, and the accompanying news release is available at http://bit.ly/whatworks-pressrelease.
While the insurance industry has made very little effort to substantiate its critique of the CFA report, CFA has prepared a detailed refutation of the industry’s responses, which is presented below.
Myth vs. Fact: An analysis of the insurance industry’s misleading critique of CFA’s study
The arguments addressed below are gleaned from responses to CFA’s report issued by the following insurance industry organizations:
California Insurance Information Network (CAII)
Insurance Information Institute (III)
Property Casualty Insurance Association of America (PCI)
National Association of Mutual Insurance Companies (NAMIC)
“Insurance companies have actually fared well under the regulatory reforms that save California drivers hundreds of dollars every year, but the industry reflexively resists accountability and oversight, even as it welcomes the unending stream of customer premiums that mandatory auto insurance brings. Policymakers and the public would be best served by focusing on the data and the facts and rejecting the insurance industry’s rapid-fire responses to every analysis that does not confirm its viewpoint,” said Hunter.