Position Statement - www.iCan2000.com

Premium Rate Controls

This is a very difficult subject to preface as situations vary so widely on a state-by-state basis. Some states take the attitude of “Let Open Competition Control Rates” where insurers need only “Notify” the State Department of Insurance of rate adjustments to implement them. In other states “Prior Approval” is required before rate adjustments may be implemented.

In all states, financial statements are required to be filed with the Department of Insurance. But no state seems to have a standardized accounting method by which insurer financial viability can be measured.

Without standardized controls, insurers are free to “Cook” their own Books to prove whatever point they wish to make. All CPA Certification does is attest to the mathematical correctness of the figures shown in the financial statement. The method by which those figures were arrived at never seem to be an issue - - therein lies the potential for fraud - abuse, and - artificially inflated premium charges.

Until State Departments of Insurance have the statutory authority to standardize and enforce a financial viability accounting method for insurers - along with the funding necessary for enforcement - Consumers will remain at the mercy of the insurance industry’s ever insatiable hunger for Profit.

Recent revelations coming out of the California Department of Insurance (the Quackenbush scandal), combined with the “Cooked Books” indiscretions of Enron, WorldCom and others, it has become clear that consumers can Not rely on under-funded - - morally challenged - - legally vulnerable Departments of Insurance to be the Consumers’ Watchdog as they were intended. The inherent defects and statutory limitations that have been allowed to fester over the past several years can no longer be corrected with remedial action - - A Complete Legislative Overhaul is Absolutely Necessary.

It is essential that Prior Approval, Accounting Standardization, Audit Authority, Enforcement Authority, Accountability and Freely Accessible Records become elements of a Broad New Insurance Reform Legislative Package to be adopted by ALL states throughout the country. When such legislation is adopted uniformly in each state, the prospect of insurers pulling out of one state in favor of greater financial latitude in other states is greatly reduced.

The Insurance Consumer Advocate Network has composed the Policyholders’ Bill of Rights to address those issues outlined above. It also addresses issues of Insurability and the option to set up alternative dispute resolution forums to help alleviate court calendar back-logs . . . most of which is self-funded.

True Premium Rate Controls Require Complete Insurance Regulatory Overhaul !