Many states have an insurance crisis on their hands, due in large part to ineffective enforcement of insurance laws and regulations already in existence. Further, many states have failed to enact new laws and regulations to deal with developments in the insurance industry.  A sure sign of this crisis is, despite the profits of property and casualty insurers surging more than 1000% with the widespread rollout of new claim tactics, these insurers are still demanding premium increases.  Personal health insurance rates continue to climb faster than the cost of health care services and technology.  Despite the leveling off or decrease in jury verdicts in medical malpractice cases, medical malpractice insurers continue to raise premiums.  Even attorney malpractice insurance premiums have soared, without any evidence of an increase in the number of malpractice suits or increase in the size or frequency of payouts.  Many states have insurance codes that grant significant discretion to a state’s Department of Insurance to set rates in many lines of insurance, yet most DOIs have failed to ensure that the rates allowed do not result in windfall profits for insurers. 

The availability of reasonably priced insurance is essential to the functioning of the economy. Not only is insurance mandated by law with respect to driving, and but many commercial enterprises are required to carry several types of insurance.  The failure of insurers to meet their obligations results in the shifting of costs to the government, and ultimately the taxpayers.  It is our position that the insurance industry has created many of the problems that they are now claiming justify increases in premiums, one example being the health insurance market.  Health insurers created a schedule of fees for various services based on what they were willing to pay, not on the actual cost of providing the service. These artificially low prices combined with the fact that most insureds have insurance which compels them to use an in-network provider force medical care providers to accept the HMO/PPO’s cartel pricing.  Insurers are allowed to engage in these unfair practices through their exemption from federal antitrust laws, poor enforcement of state antitrust laws, and the fact that medical care providers have no similar exemption. 

Despite little or no increase in the fee schedules, insurers are claiming a need to raise basic health insurance premiums.  Health insurers have also engaged in numerous fraudulent activities to reduce costs including: silent PPOs, bundling of separate services into one procedure, not paying claims promptly, etc…  These practices have resulted in among other things, doctors being forced to increase patient volume by shortening exams. When doctors cannot spend the time required to properly treat the patient, the likelihood of misdiagnosis, mistreatment and malpractice increase. The underlying purpose of insurance is the spreading of risk.  Unfortunately, the present view of many insurance companies is that they should make a profit on every policy, and when a particular policy becomes unprofitable, the insured is dropped.  Since the major insurance companies tend to share the same underwriting criteria, prospective insureds are forced to either insure themselves with substandard insurers, through a state’s high rate assigned risk pool, or not insuring themselves at all.