Allstate's Surprise Rate Hike
Palm Beach Post Editorial
Tuesday, February 14, 2006
If officials in Florida's Office of Insurance
Regulation don't understand anything else, they should
understand that the cost of insurance is crucially
important to homeowners in this state. The most blatant
evidence they haven't grasped that basic point came last
week with news the office didn't bother to inform the
public it had approved major premium increases of rates
paid by Allstate customers.
On Jan. 25, appointed Insurance Commissioner Kevin
McCarty approved average increases of 16.3 percent for
Allstate Floridian Insurance Co. and 24.4 percent for
Allstate Floridian Indemnity Co. The office in October
had said — with much more publicity — that it would
oppose the increases, which affect 640,000 customers.
The OIR did not issue a press release announcing its
about-face.
Because of past legislative decisions favoring the
insurance industry, Florida has an arbitration system
rigged to approve most increases. But, in another sign
the OIR doesn't understand its impact, this rate
increase didn't even go to arbitration. Consumer
advocates didn't have the chance to make their case
against the increase.
Sen. Ron Klein, D-Boca Raton, said, "Every homeowner
in the state should be outraged by the fact that our
appointed insurance commissioner feels no obligation to
include them in or inform them of this decision." He
wants Florida to return to the days of an elected
insurance commissioner.
Elected or appointed, the real issue is whether the
increase is justified. The stealthy way Allstate's
increase went from opposed to approved raises doubts.
http://www.palmbeachpost.com/opinion/content/opinion/epaper/2006/02/14/a14a_allstate_edit_0214.html
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