Rhode Island Insurance Commissioner Denies Increase in Property Owner Deductibles
The Rhode Island Insurance Commissioner Steven A. Pagano has had his work cut out for him lately. The Rhode Island Department of Insurance Regulation has been on a PR offensive, defending the state's new insurance rates. Despite the efforts, the Insurance Commissioner has yet to finalize a rate decrease. Why is this? Because the rates have not been lowered enough to balance the budget.
Mr. Pagano has released statements saying he will not finalize the rates until all of the information in the current rate review is complete. That information is not ready or even close to being ready. As of this writing there are still several adjustments that need to be made. Two big mistakes the Rhode Island Department of Insurance Regulation is making is notifying the carriers of the current rate review before they are made and not allowing changes to the carriers prior to the rate reduction date.
One of the largest carriers, AIG, is filing for bankruptcy due to the loss of business by underwriters on the Rhode Island State Department of Insurance website. What does this mean for the Rhode Island Department of Insurance? car insurance lubbock tx . That's right, you guessed it, no Insurance because no Insurances are being issued and the state is simply incurring losses that exceed their projected losses from the rate review.
Another carrier, Celtic Insurance, is experiencing similar issues. In a recent article in the Review Journal, Insurance Commissioner Pagano indicated that a full year of operation for both companies would be needed to make a difference. If that is true, then why is the state waiting until after one year of operation for Celtic? Has the Insurance Commissioner lost confidence in both companies?
Recently I was consulting with an individual that works as a Policy Analyst for a private non-profit Insurance company in Rhode Island. At that company they are currently analyzing the Rhode Island insurance market. They were asked if they had noticed any changes in the rates that the Insurance Commissioner has mentioned. The answer was "No".
When we asked about the coverage provided through the commercial property owner-applications, we were provided with an example of a commercial property that could meet the criteria of the "New England Condominium Insurance". In other words, the owner's policy covers the building and the contents that are in the building. This may not include land. As we stated previously, the state may have increased its requirements for New England condo owners.
It seems the Insurance Commissioner is concerned about the "New England Condo Insurance" since it appears that all of the companies he reviewed have raised the rate for that coverage. Does this mean the "New England Condo Insurance" will no longer exist? The answer is "No". In the end, all insurance products have "lifetime coverage provisions". This means that the insurance policies continue to provide coverage for as long as the policyholder lives. However, it also means that the insurance companies cannot raise the limits on coverage once the policy expires.
The Insurance Commissioner has the authority to adjust the terms of insurance contracts, including the premium and the amount of liability coverage. The Insurance Division has the authority to investigate, deny or approve a rate change based upon the results of an investigation. The Insurance Division has held that each company can choose to either accept a rate increase based upon an unreasonable request by a client, or refuse to offer reasonable rates and/or coverage if they believe that the request is likely to be frivolous. We will let you know what happens next.