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To: Paloma_55
Insurance works like this....You estimate the probability of a claim being filed..then you set your premiums such that you can make a profit

The State Board of Insurance dictates the rates to be charged, not the insurance companies.

Insurors do not make their profits by taking in more dollars in premium than they pay out as claims. Indeed, they frequently pay out more.

Insurors make their profits from the dividends of wisely investing those premium dollars until they are paid back out as claims.

You could always bump up the premiums of others who have less risk..

Again, it is the government that sets rates, not the insurors. They are prohibited by law from just 'bumping up the premiums'.

You don't know what insurance is, or how it works. Armed only with ignorance and anger, you insult and malign your neighbors....fellow Americans. How novel.

62 posted on 06/02/2006 6:10:28 AM PDT by laotzu
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To: laotzu

--- The State Board of Insurance dictates the rates to be charged, not the insurance companies. ----

You must be talking about a specific kind of insurance.

I recently purchased business insurance and had to undergo a rectal (figuratively speaking) exam for the underwriter to assess the exposure/risk that I would have and therefore they could set the rates.

Why would they bother to assess risk if the rates are set by the insurance commissioner?

--- You don't know what insurance is, or how it works. Armed only with ignorance and anger, you insult and malign your neighbors....fellow Americans. How novel. ----

Seems like I touched a nerve. Its not like I was insulting insurance salesmen and comparing them to used car salesmen...

I know a few insurance salesmen and I would never insult a used car dealer like that!


63 posted on 06/02/2006 1:12:47 PM PDT by Paloma_55 (Still MAD as HELL!!!)
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To: laotzu

There are few industries that are more heavily regulated than insurance. But you know that.


70 posted on 06/03/2006 6:09:17 AM PDT by Eagle Eye (There ought to be a law against excess legislation.)
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