October 27, 2006
Consumer Group Says Insurance Rates Drop Irrespective of Tort Reform
According to the Americans for Insurance Reform, a national consumer advocacy group, commercial insurance rates have stabilized or dropped in almost every sector, including medical malpractice, not as a result of tort reform legislation but due to the property/casualty insurance industry's economic cycle. Falling rates, according to AIR, are due to a soft market that follows the large price hikes that hit most lines of insurance during the 2000-2003 period. The rate decline has occured despite large losses such as those resulting from the hurricanes of 2004 and 2005. "[L]osses do not determine the rates that insurers charge," according to this analysis. According to the group, rate hikes have little, if anything, to do with the legal system. Earlier studies have documented this cyclical phenomenon and attribute it in large part to insurer's investment practices and in smaller part to their claims experience.
October 27, 2006 | Permalink
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