Utility-Type Commission Needed for Insurance

The Times carried an interesting article (Sept. 5), “Two Utilities Ordered to Refund $24 Million.”

If we only had a public utility-type commission for insurance rate regulation, Californians would never have to suffer through an insurance crisis again. The problem has been that insurance companies do not have to justify their rate increases to such an objective tribunal. They can just impose rate hikes as they see fit.

The insurance commissioner only has authority to roll back insurance rate increases if the commissioner finds them to be excessive. (This is hardly ever done.) If insurance companies had to justify rate increases to a public utility-type commission in the first place, chances are we would never see dramatic increases again in the future, and we may even get refunds, like with public utilities.

The Sept. 1 issue of Business Insurance, a reliable insurance trade journal, carried a startling headline: “First-Half Earnings Double for 15 of 24 Major Insurers.” Can you imagine that? Property/casualty insurance profits are actually soaring while, at the same time, Californians are paying exorbitant premiums. It’s either going to take a tough commissioner or a public outcry to get something done. Perhaps what we need is an initiative to address this issue of insurance rate regulation!

WILLIAM M. SHERNOFF

Claremont