Plan would post insurance rate hikes online
Bill aims to allow consumers to comparison-shop
By Alan Gathright, Rocky Mountain News
February 16, 2007http://www.rockymountainnews.com/drmn/government/article/0,2777,DRMN_23906_5355748,00.html
Insurance companies would have to post rate hikes on a state Web site under a bill that passed in a House committee on Thursday.
House Bill 1234 will help Coloradans combat rising insurance costs, said sponsor Rep. Morgan Carroll, D-Aurora.
Initially, Carroll wanted rate increases posted on the site 30 days before they took effect.
But industry officials persuaded her to strike that provision, and the bill passed 10-1 in the House Business Affairs and Labor Committee.
In Colorado, insurers can instantly boost rates once they file notice with the state insurance division without public notice.
That's bad for free-market competition and fuels premium increases, Carroll said.
"Anyone who has a health, auto, homeowners, business, or liability insurance policy is subject to rate increases at the whim of the insurance industry," she said, "and right now our state provides consumers no ability to comparison-shop for a better deal."
Insurance industry officials backed the bill.
"Disclosure is a good thing," testified Bill Imig, a representative for the Property Casualty Insurers Association of America and Allstate Corp.
But after the hearing, Imig disputed a fact sheet issued by Carroll stating that Colorado ranks among the top 10 states for expensive premiums, despite having a healthy population and lower claim payouts.
He said Colorado's once "sky- high" auto rates have plummeted since the state dropped its no-fault insurance system in 2003.
"We're trending right in the middle on all of our insurance rates" compared to the rest of the nation, he said.
Imig warned the committee that before 1973 the state required pre-approval by state regulators before increasing - or decreasing - rates, and that created horrendous monthslong delays.
When the state adopted rules allowing insurance companies to raise rates as soon as they file with the state, "rates in Colorado dropped dramatically and more companies came in," he said.
• Consumers paid $25 billion in insurance premiums in 2005
• Health care premiums increased 82.2 percent for a family policy from 2000-06, while wages increased 15 percent in the same period. (Kaiser Family Foundation)
• Home insurance premiums increased 22.9 percent from 2002-04. (National Association of Insurance Commissioners)
• Medical malpractice premiums increased 69.8 percent form 2001-06 (COPIC Insurance)
• Car insurance premiums have dropped an average of 13 precent since 2003, when Colorado went from no-fault to tort. But at the same time, benefits were reduced 75 percent. (Department of Regulatory Agencies)Source: Rep. Morgan Carroll
gathrighta@RockyMountainNews.com or 303-954-5486.
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