Most companies see what happens when they try to do things like require construction qualities. “Poor people can’t afford it” so they are just being mean to poor people.” So unless the corporate mood is to fight the world, there is a better payoff in going somewhere else to work.
In the mid and late 1980s more than 200 companies left Texas because of requirements made by the Insurance Board. Republic Insurance ( main office at that time was Dallas ) was major player in dwelling insurance. They stopped writing cover in Tx with just a few exeptions. At the same time they opened a new company in Luxemburg to write GL & Wk Comp in what was East Germany. Lots of rehab construction was starting up. No need to write business in a hostile back yard if you can work in a more receptive place without even changing your office location, thanks to phone, fax, and email.
Actually, thinking about Allstate’s move to change rates now rather than wait for approval makes sense.
If they do the higher rate they are ready for the storms. If they have a year like last year then the rate is justified. If they don’t have that kind of season then they give the money back. The math is just like a mutual company dividend plan. They have tax benefits of being a stock company and the policy holder fairness of a mutual.
Cool huh?
You will hear a lot more from Gallagher during the coming months. He will not miss an opportunity for public “exposure”.
The reality is that Gallagher couldn’t care less about Florida policyholders. But, he does need their votes to get past the primary next year (which won’t happen). Yeah, Tom is a real “people’s” man.
Obviously both his tenures as Insurance Commissioner have been very lethargic. He can find a camera, but his lack of knowledge of the insurance industry and his unwillingness to look beyond his own political ambitions are really hurting the insurance consumers in this state. Don’t approve a rate increase, but allow the companies to non-renew policies by the thousands.
Two years ago State Farm went for 2 consecutive rates increases of 45% each, got turned by Gallagher went to mediation and State Farm finally won. Gallagher and all the politicians were all weak and absent during the special legislative meetings.
Nothing other than a run for governor came out of it. Mr Gallagher took credit for something called seasonal hurricane deductible and a worthless hurricane savings account plan.
Allstate’s rate increase is more than justified since State Farm slaps its customers yearly with rates and no one ever bitches at them.
Tom Gallagher will lose the republican nomination for Gov. for the 3rd time. Then he is out of the CFO position as well. Private sector will be his onyl choice. I hope no one will use him in the private sector, especially the insurance industry.
Tom will get body slammed by the voters. I say Tom will be down for the count very soon. He even has the nerve to ask the insurance industry for money for his campaign. Don’t give him a red cent. Jerk!
You commented;
“Two years ago State Farm went for 2 consecutive rates increases of 45% each, got turned by Gallagher went to mediation and State Farm finally won. Gallagher and all the politicians were all weak and absent during the special legislative meetings.”
Where can the general public find verifiable information on that market conduct by State Farm?
State Farm increase to stand
Florida’s insurance commissioner says a challenge to the steep rate hike would be useless.
By JEFF HARRINGTON, Times Staff Writer
——————————————————————————–
Florida’s insurance commissioner says a challenge to the steep rate hike would be useless.
Arguing that any challenge would be futile, Florida Insurance Commissioner Tom Gallagher on Thursday grudgingly accepted an arbitration panel’s decision that State Farm can raise homeowners rates as much as 85 percent over the next two years.
State Farm, which writes about a third of Florida’s homeowners policies, received permission to raise its average rates by 22.5 percent this year and next in an Oct. 14 ruling by the three-member arbitration panel. The panel capped the increase for any given policyholder at 42.5 percent each year.
State Farm turned to arbitration last summer after Gallagher rejected its request for a second rate increase in less than six months.
After 10 days reviewing his options, Gallagher said he determined “any attempt to appeal the ruling would prove unsuccessful. . . Florida law specifically states the panel’s decisions are final and binding.”
The commissioner noted that his predecessor, now-U.S. Sen. Bill Nelson, appealed two rulings by the arbitration panel and eventually failed both times.
Instead, Gallagher said the State Farm decision “strengthens my resolve” to try to persuade the state Legislature to eliminate the arbitration panel during its next session.
Created by state law, the arbitration panel consists of one member named by the insurance industry, one named by the insurance commissioner and a third selected by both from a list supplied by the American Arbitration Association. Consumer critics say the arbitration list has been weighted with pro-industry prospects.
The vote in the State Farm case was 2-to-1 with the consumer representative appointed by the commissioner casting the sole “No” vote.
Gallagher said he was particularly “astounded” that the arbitration panel allowed State Farm to bring in new data to support its request, information never provided to regulators in the original filing.
Bill Newton, executive director of the Florida Consumer Action Network, said he was encouraged by Gallagher’s pledge to take another stab at repealing the arbitration panel “but it doesn’t go far enough.”
Newton accuses State Farm of keeping rates artificially low for years to build market share. Insurers that opt for such “predatory pricing” policies should be forbidden by the Legislature from making it up quickly with large increases that shock consumer’s wallets, he said.
State Farm, which attributes its increase to higher costs and higher claims payouts, was allowed to send out the higher bills while its case was awaiting arbitration.
For State Farm homeowners paying those high double-digit increases, like Jim Kirkman of Seminole, Thursday’s news amounted to more disappointment.
Faced with a 59 percent increase on his homeowners bill, Kirkman trimmed $100 off his premiums by increasing his deductible from $500 to $1,000. He said he spent an hour recently talking with his agent “but he never did come up with a reason why I’m paying so much more.”
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Most companies see what happens when they try to do things like require construction qualities. “Poor people can’t afford it” so they are just being mean to poor people.” So unless the corporate mood is to fight the world, there is a better payoff in going somewhere else to work.
In the mid and late 1980s more than 200 companies left Texas because of requirements made by the Insurance Board. Republic Insurance ( main office at that time was Dallas ) was major player in dwelling insurance. They stopped writing cover in Tx with just a few exeptions. At the same time they opened a new company in Luxemburg to write GL & Wk Comp in what was East Germany. Lots of rehab construction was starting up. No need to write business in a hostile back yard if you can work in a more receptive place without even changing your office location, thanks to phone, fax, and email.
Actually, thinking about Allstate’s move to change rates now rather than wait for approval makes sense.
If they do the higher rate they are ready for the storms. If they have a year like last year then the rate is justified. If they don’t have that kind of season then they give the money back. The math is just like a mutual company dividend plan. They have tax benefits of being a stock company and the policy holder fairness of a mutual.
Cool huh?
You will hear a lot more from Gallagher during the coming months. He will not miss an opportunity for public “exposure”.
The reality is that Gallagher couldn’t care less about Florida policyholders. But, he does need their votes to get past the primary next year (which won’t happen). Yeah, Tom is a real “people’s” man.
i think he will make a great governor.
Obviously both his tenures as Insurance Commissioner have been very lethargic. He can find a camera, but his lack of knowledge of the insurance industry and his unwillingness to look beyond his own political ambitions are really hurting the insurance consumers in this state. Don’t approve a rate increase, but allow the companies to non-renew policies by the thousands.
Two years ago State Farm went for 2 consecutive rates increases of 45% each, got turned by Gallagher went to mediation and State Farm finally won. Gallagher and all the politicians were all weak and absent during the special legislative meetings.
Nothing other than a run for governor came out of it. Mr Gallagher took credit for something called seasonal hurricane deductible and a worthless hurricane savings account plan.
Allstate’s rate increase is more than justified since State Farm slaps its customers yearly with rates and no one ever bitches at them.
Tom Gallagher will lose the republican nomination for Gov. for the 3rd time. Then he is out of the CFO position as well. Private sector will be his onyl choice. I hope no one will use him in the private sector, especially the insurance industry.
Tom will get body slammed by the voters. I say Tom will be down for the count very soon. He even has the nerve to ask the insurance industry for money for his campaign. Don’t give him a red cent. Jerk!
U B Sure,
You commented;
“Two years ago State Farm went for 2 consecutive rates increases of 45% each, got turned by Gallagher went to mediation and State Farm finally won. Gallagher and all the politicians were all weak and absent during the special legislative meetings.”
Where can the general public find verifiable information on that market conduct by State Farm?
Roger Poe
rogerpoe@acnet.net
Mr Poe:
READ THIS ARTICLE FROM SP TIMES!
State Farm increase to stand
Florida’s insurance commissioner says a challenge to the steep rate hike would be useless.
By JEFF HARRINGTON, Times Staff Writer
© St. Petersburg Times, published October 25, 2002
——————————————————————————–
Florida’s insurance commissioner says a challenge to the steep rate hike would be useless.
Arguing that any challenge would be futile, Florida Insurance Commissioner Tom Gallagher on Thursday grudgingly accepted an arbitration panel’s decision that State Farm can raise homeowners rates as much as 85 percent over the next two years.
State Farm, which writes about a third of Florida’s homeowners policies, received permission to raise its average rates by 22.5 percent this year and next in an Oct. 14 ruling by the three-member arbitration panel. The panel capped the increase for any given policyholder at 42.5 percent each year.
State Farm turned to arbitration last summer after Gallagher rejected its request for a second rate increase in less than six months.
After 10 days reviewing his options, Gallagher said he determined “any attempt to appeal the ruling would prove unsuccessful. . . Florida law specifically states the panel’s decisions are final and binding.”
The commissioner noted that his predecessor, now-U.S. Sen. Bill Nelson, appealed two rulings by the arbitration panel and eventually failed both times.
Instead, Gallagher said the State Farm decision “strengthens my resolve” to try to persuade the state Legislature to eliminate the arbitration panel during its next session.
Created by state law, the arbitration panel consists of one member named by the insurance industry, one named by the insurance commissioner and a third selected by both from a list supplied by the American Arbitration Association. Consumer critics say the arbitration list has been weighted with pro-industry prospects.
The vote in the State Farm case was 2-to-1 with the consumer representative appointed by the commissioner casting the sole “No” vote.
Gallagher said he was particularly “astounded” that the arbitration panel allowed State Farm to bring in new data to support its request, information never provided to regulators in the original filing.
Bill Newton, executive director of the Florida Consumer Action Network, said he was encouraged by Gallagher’s pledge to take another stab at repealing the arbitration panel “but it doesn’t go far enough.”
Newton accuses State Farm of keeping rates artificially low for years to build market share. Insurers that opt for such “predatory pricing” policies should be forbidden by the Legislature from making it up quickly with large increases that shock consumer’s wallets, he said.
State Farm, which attributes its increase to higher costs and higher claims payouts, was allowed to send out the higher bills while its case was awaiting arbitration.
For State Farm homeowners paying those high double-digit increases, like Jim Kirkman of Seminole, Thursday’s news amounted to more disappointment.
Faced with a 59 percent increase on his homeowners bill, Kirkman trimmed $100 off his premiums by increasing his deductible from $500 to $1,000. He said he spent an hour recently talking with his agent “but he never did come up with a reason why I’m paying so much more.”
— Jeff Harrington can be reached at harrington@sptimes.com or (813) 226-3407.
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