Miss AG. Jim Hood
AKA Conway Twittiy
Posted on 02/16/2007 12:57:11 PM PST by Brilliant
JACKSON, Miss. - Mississippi Attorney General Jim Hood said Friday he will seek legislation aimed at blocking State Farm Insurance Cos. from refusing to write new homeowners and commercial policies in the hurricane-battered state.
He said the plan was modeled after actions taken by Florida and would require any company that writes automobile insurance to write homeowners policies as well.
"We're looking at a robber baron in the face that is trying to make an example of Mississippi," Hood said of State Farm.
State Farm, Mississippi's largest home insurer, said Wednesday it has had enough of the "untenable" legal and political climate in the state and would not write new homeowners and commercial policies in a state still struggling to recover from Hurricane Katrina.
The company said the suspension would begin Friday and continue until the business climate in the state was more palatable.
A spokesman for State Farm Insurance Cos. said the decision was due, in part, to the wave of litigation the company has encountered since the Aug. 29, 2005, hurricane.
Mississippi is the latest state along the hurricane-vulnerable Gulf Coast to at least temporarily lose an insurer.
State Farm has more than 30 percent of the homeowners policies and 8.5 percent of the commercial policies in Mississippi.
This guy is not "thinking outside the box." If he wants to solve Mississippi's insurance problems, he ought to look for ways to make the insurance business profitable in Mississippi. There are a lot of ways to do that short of a massive increase in premiums.
Mississippi Ping.
Do I win the toaster?
He said the plan was modeled after actions taken by Florida and would require any company that writes automobile insurance to write homeowners policies as well.
I'm sure all the SF agents will love this.
Expertise ping. :>)
He said the plan was modeled after actions taken by Florida and would require any company that writes automobile insurance to write homeowners policies as well.
I'm sure all the SF agents will love this.
Meaning SF may just quit all together.
I expect Barbour will step in and bring some sanity to this situation.
Why doesn't the Federal Government just provide insurance coverage for everybody? (/sarcasm)
It's amazing how stupid people can be.
I thought ALL insurance companies were profitable. Yes some lines would lose but others make up the shortage. All the good years they profit and when then one bad year they want to cut and run.
They've lost a ton of money in Fla. It does them no good to cut and run after they've already lost the money. The reason why they are cutting and running are 1) they realize that they underestimated the risks, and 2) the regulators won't let them charge a premium that is based on the true risk.
I thought the concept of insurance was everyone pitches in and the insurance company make a profit over the long haul. That is why they are regulated so they don't take advantage of the climate (no pun intended). Yes one bad year but how about all the good years. Texas has not had a hurricane hit the cost in years so the insurance companies are make good money. I would be disappointed if they just packed their bags after one bad season.
It's not just that, though. Our regulators have been demogoguing insurance ever since I moved here 24 years ago. They basically fixed it so that there is little or no profit in the industry. So why would you issue policies in a state where the downside is massive, and you're not really getting paid to accept the risk?
Let's face it, the casualty risks are greater in Fla. than in other states, so you've got to expect to pay more for insurance.
I have suggested, that what the state should do is recognize that they've gotta find a way to make insurance profitable in Fla. without jacking the rates out of sight.
There are ways to do that. One way is what they are doing, but I don't really approve of that. They are telling the ins. cos that if you want to issue life ins. or auto ins. in Fla, then you've gotta issue casualty ins.
What the companies are doing is they are trying to make up their losses on casualty ins. by increasing their profits on auto and life policies.
The problem is that what it really means is that auto and life ins. policyholders are subsidizing casualty ins.
I think there is a better way. Tell the ins. cos. that they can sell "unregulated" casualty ins. They can make the terms as long as they like. They can make the policies assignable so that if you sell the house, the purchaser can take your policy. They can collect the premium 2 years in advance. They can make them noncancellable. And they can charge whatever they want for them.
There are only two catches: They've got to sell the consumer on it fair and square, and if they do this, then they've also got to offer the regulated policy to the consumer. That way, they are effectively competing against themselves, but if they can sell the consumer on these "frilly" policies at higher premiums, then they might be able to offset the profits on the unregulated policies against the expected losses on the regulated ones.
But our regulators aren't smart enough to do anything like that. They'd rather demogogue, and that is why we are in such a mess.
Jim Hood = total dingbat.
Miss AG. Jim Hood
AKA Conway Twittiy
I thought you died.
Did you see the Channel 3 news tonight?
Just as long as there is no deductible and double proceeds if you can't prove a loss. Sounds about right.
I remember a time when no one want to live there because of the hurricane ally risk. Now millionaires constructed mansions in the path and want reasonable insurance rates. My thought... if they want to build in the path of hurricanes they should bear the true cost of insurance. Building in high risk area and expecting the total group to subsidize the rates get you to were we are today.
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