Montana Insurance

Record profits for the insurance industry, one year after Hurricane Katrina are the result of excessive premiums, reduced coverage in coastal areas like Louisiana and underpaying claims after a study of the Consumer Federation of America.

Representatives of insurers Monday controversial report, show relatively high earnings during 2006 reflect a hurricane season is relatively quite this was necessary after Hurricane record of payments of claims in the years 2004 and 2005.

In its report of the Consumer Federation said states should step towards the establishment of more stringent rules. It further recommends that coastal states like Louisiana consider filling void left by the coverage Drop in companies threatened by Hurricane joint cooperation with neighbouring countries, the creation of a wind risk pool. Such a system would be the risk and consumers more for the noise Buck, the report said.

After Hurricane Katrina, many consumers have complained that they were not treated fairly by their insurance companies. J. Robert Hunter, director of insurance for Consumer Federation, said the most recent data support the complaints. The share of premiums paid to lower benefits, he said, 75 percent at the end of 1980 to just over 60 per cent in 2005.

“Insurers pay less and less of Premium dollars in benefits for consumers,” said Hunter. He said that the sector was profitable in the years 2004 and 2005, despite an unprecedented number of hurricane claims in 2006 and earnings before taxes rose by more than $ 30 billion for compensation insurer.

Marc Racicot, chairman of the American Insurance Association, said the Consumer Federation of America is a great ignore that fact, without the high earning potential relatively calm in the year investor is not their money in insurance.

“Insurance is one of the cases on the basis of all the risks and should be a relatively high risk of return to investors from time to time, or investors and their capital elsewhere, the operation is not more , “Said Racicot, former Republican governor of Montana. “Return to happiness for all Americans, damage and reinsurance industrial accidents has been a much better year financially in 2006 than 2005 or 2004, as we saw record losses from natural disasters.”

Robert Hartwig, president and chief economist for the insurance industry Institute of Public Information, said the increased activity Hurricane in the next 15 to 20 years, the insurer needs a relatively calm years in 2006. The Institute is a research organization funded by the insurance industry.

Hartwig said Capital insurer to build after the release of $ 80 billion of insured damage in 2004 and during the 2005 hurricane season, in part to strict regulatory criteria, companies demonstrate the ability to pay fees, more a house by the disaster Year.

Hunter of the Consumer Federation, said the importance of profits can not be justified on any ground. “The gains and a solid insurance is a good thing, but not excessive profits and breakage consumers,” said Hunter, a former Federal Insurance Court administrator.