Top 10 Regulatory States for P&C Insurers

Vermont and Ohio had the best property and casualty insurance regulatory environments in the U.S. in 2010, followed by Illinois, Maine, and Wisconsin, according to a report recently released by the Heartland Institute.
The Heartland Institute, a national nonprofit research and education organization, has issued its 2011 Property and Casualty Insurance Report Card (available in PDF), a state-by-state analysis of insurance regulatory burden.
1. Vermont (A+).  2. Ohio (A+).  3. Illinois (A). 4. Maine (A).  5. Wisconsin (B+).  6. Arizona (B+).  7. North Dakota (B+).  8. Utah (B+).  9. Idaho (B+).  10. South Carolina (B+).
The report ‘asks fundamental questions about the nation’s property and casualty insurance regulatory environment’ such as the following:
  • ‘How free are consumers to choose the property and casualty insurance products they want?’ and

  • ‘How free are insurers to provide the property and casualty insurance products consumers say they want?’[1][2]
Vermont and Ohio had the best property and casualty insurance regulatory environments in the U.S. in 2010, followed by Illinois, Maine, and Wisconsin, according to the report.

The report notes that federal regulatory reforms of the financial services industry and health care did not have any major effects on property and casualty insurance, despite the fact that both the Patient Protection and Affordable Care Act (PPACA) and the Dodd-Frank Wall Street Reform and Consumer Protection Act included provisions affecting property and casualty insurance.
Reviewing the data on insurance in 2011, we see once again a modest, uneven, but nonetheless real trend towards more freedom for consumers and businesses in the homeowners’ and automobile insurance realms. Although state-level insurance bureaucracies make it difficult, sometimes impossible, for insurers to offer consumers the products they need, want, and deserve, burdensome regulation shows signs of easing.[3]
State insurance regulation is graded in the report based on a number of factors, including politicization, regulatory clarity, residual insurance markets, market concentration and rate regulation.

For the fourth year in a row, Florida was ranked last on the list with an ‘F’ letter grade.
For the fourth year in a row, Florida was ranked last on the list with a letter grade of ‘F’ and a numerical score of -35. The report is very critical of the Florida regulatory environment, but notes that Florida’s legislature, with bipartisan majorities, did attempt ‘to reduce the size and scope of the state’s extensive insurance market interventions.'

The report also indicates that Florida ‘experienced a wave of insurer insolvencies mostly from over-regulation of the market’ including many insolvencies that ‘the Florida Office of Insurance Regulation kept secret from consumers in the early months of the year [that] ended up sending consumers and regulators scampering to other companies and the state’s residual market, the Florida Citizens Property Insurance Corporation.'


12011 Property and Casualty Insurance Report Card, The Heartland Institute, May 2011.
2. See also the Heartland Institute's article regarding the report, written by Eli Lehrer, Vice President of Heartland.
32011 Property and Casualty Insurance Report Card, The Heartland Institute, May 2011.

1 comment:

  1. Never heard of this Heartland Institute before, wonder if it has any credibility.

    ReplyDelete