In Letter to Louisiana Legislature, Consumer Federation of America Opposes Repeal of Prior Approval Insurance Regulation
In a letter to the Louisiana House Committee on Insurance and the Senate Insurance Committee, the Consumer Federation of America (CFA) opposed the repeal of prior approval insurance regulation. "Prior approval" means that insurance companies must get approval from the Louisiana Department of Insurance before they can increase premiums.
Strong prior approval regulation and oversight of insurance is the best way to protect consumers, resulting in slower premium growth, better quality insurance products, and a more competitive market. Prior approval regulation also promotes higher quality products and practices and provides a mechanism for restitution when consumers are harmed. Moreover, other states have moving toward stronger and more comprehensive insurance regulation; for example, Delaware recently became a prior approval state.
The failure of Louisiana regulators to meet their oversight responsibilities is not a reason to deregulate this critical market--deregulating the insurance companies will not solve the state's insurance crisis. It will only make things worse.
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