Montana Insurance

In facing all these problems were insurance with Hurricane Katrina, they have a difference of homeowners in Louisiana, if a regulatory authority of the Federal Insurance Court in Washington, called the moves ” State is not as commissioner of insurance in Louisiana?

From the consumer policy is in favour of homeowners insurance agents of the State and insurance commissioners say, it could have been the situation is even worse to have someone responsible was unusual, with local conditions, and compared to problems with the Federal Emergency Management Agency.

“If you like FEMA, which are expensive Federal Insurance Court, the regulatory authority,” said Jeff Albright, Chief Executive of the Authority and independent insurance brokers of Louisiana, which suggests that local regulatory authority is best suited to the specific needs of people in the state.

But others argue that federal regulations could have a difference. Passage of a mixture of different countries an immense pool of 300 million people according to geographical areas at risk may have contributed to reduce the availability of insurance Crunch after Katrina and a powerful federal regulator would have real leverage to keep the firm in unseriöse compliance.

“The idea that you are not left in the cold with the state regulation is proven incorrect manner,” said Tom Baker, director of the Insurance Law Center at the University of Connecticut School of Law.

These questions are not merely academic, because in the proposed revision of the nation, the system of financial regulation, Treasury Secretary Henry Paulson wants to give insurance companies the opportunity to settle in Washington, rather than by public plans Insurance Commissioners. Bills to establish a “federal pact” are also underway in Congress, HR 3200, the proposal for a National-Versicherungs-law.

With many insurance companies operating throughout the country - and perhaps think of new business opportunities abroad - some say that states system has outlived its usefulness. First licensed in each country, stand with the rules for 56 countries and territories, obtain political forms and prices in each location is simply too heavy and too costly for a national network of business. And furthermore, banks have the option of being acquired by state or federal government, so that insurers say they also want.

The current system is “very fragmented,” said former Montana Dir Marc Racicot, chairman of the American Insurance Association trade group. “It’s a question of trying to do business efficiently and effectively.”

Consumer advocates respond that “federal pact” code for deregulation, and there is nothing in it for the insured. In his lobbying, deep-pocketed insurers would be to ensure that a federal system would be similar to deregulated most public systems, such as Illinois. Allowing companies to choose between regulated by the states or the federal government would be a levelling down regulator such as the two systems would be competing insurers to win. Good consumer protection laws in California would be dismantled, and Florida would be powerless in its position against insurance companies.

“I am not against a federal role, but the OFC is a bad idea, because there is the possibility, insurance companies,” said Hunter, the release of a week in this study on the impact the different systems of regulation on consumers. “If I had one condition, and I want insurance companies to choose my system, I drop my level. It would decimate the regulations.”

The table football, “said Hunter, is that Paulson’s proposal briefly details on consumer protection, but expressly states that there is no regulation of homeowners and auto insurance rates. It is not a hoax.

“While many arguments have been used to justify this rate regulation, they are not convincing,” Paulson’s proposal reads. “Insurers must be subject to any regulations nor necessary to evaluate the use of a rate element rating or price.”

Opponents of the ordinance federal insurance for homeowners to say that Katrina is an excellent example of why a national regulatory authority insurance would not meet the needs of people.

Consumer Help Line workers at the Louisiana Department of Insurance geschuftet seven days a week after the storm to answer questions, the Insurance Commissioner Jim Donelon said there is no possibility of a federal regulatory authority would also be accessible.

It would be difficult for a regulatory authority at the federal level, specific rules to a situation as a rule of Louisiana to ensure that companies file policy 16 months after the storm. A federal bureaucracy would probably be too rigid, as the National Flood Insurance Program, which was insured, it is not possible to participate in the LA requests mediation program and all the effort made by the least effective of the competition by the federal government and regulations.

And if rates were deregulated, Donelon said, it would probably be volatile look at commercial rates much more quickly and the amount to a higher level as owner of insurance, but are still down . The wild fluctuations “that insurance, are not, contrary to what owners Adjustable mortgage rates felt last year, given that their loans reset at higher rates, pain, Donelon said that would be” untenable “.

“I think a federal supervisory authority would be less of a regulatory authority that we are and of business-friendly,” said Donelon.

But there are other signs that the federal regulations could have contributed to the situation after Katrina. ”

How conspiracy theories have tourbillonné since the storm, that insurers colluded by adapting their programmes to support the values of payment for repairs, federal regulations could have a strong federal anti-trust laws on the situation Because Racicot said that all companies that provide for a federal pact, the federal their exemption. At the moment, insurers are the federal anti-trust laws, because by the States and so that they can exchange data shows that the industry, enables companies to identify price trends and loss of more efficient products.

In addition, businesses have not stopped selling new homeowners insurance policies in Louisiana, as they have, if the state coastline of the insurance risk has been the dissemination of all inhabitants of the coasts of country. “The subject is expanding with the risk,” said Howard Kunreuther, professor of science and the decision of the law and order in the Wharton School of the University of Pennsylvania.

And some say that the rules of the biggest market could be better applied by a federal court insurance czar. As Katrina demonstrated by Louisiana’s fighting with Allstate Corp., the public insurance schemes can not push too hard Commissioners, without the risk that the company outside the State, but a Federal Insurance Court, the regulatory authority would have more leverage to ensure that businesses do the situation would be to divide and rule.

“If Company X, said:” I do not want to write more and Louisiana, a federal supervisory authority could say: “Well, I’m not sure I’ll write in New York,” said Baker, University of Connecticut professor. “regulatory authority in Louisiana is still something on trade with insurance companies.”

Baker also does not buy the idea of a federal supervisory authority would thud to local needs. FEMA’s poor performance after Katrina May, more than that to be done, as the Agency is currently structured as a problem inherent to the Confederation disaster. And if the securities of the Confederation, the regulatory authorities the power to stop trading day on Wall Street to sell source in a panic, a federal court insurance, the regulatory authority could also be empowered to deposit the Institute moratoriums for a policy in disaster areas.

“I think it would be preferable to have a federal market regulators and financial leverage to do with the crises in the short term,” he said.