Los Angeles, CA, August 15, 2011 --(PR.com
)-- California consumers need not fear their claims won’t be paid because of the recent credit downgrade of several large insurers following the lowering of the United States credit rating, according to Insurance Commissioner Dave Jones.
Jones said the ratings changes will have no effect on insurers’ ability to honor claims for the broad range of health, life and auto insurance California
The announcement came days after credit rating agency Standard & Poor’s said it had lowered from AAA to AA+ its rating of five coverage providers with large investments in U.S. securities:
--Knights of Columbus
--New York Life
--Teachers Insurance & Annuity Association of America
--United Services Automobile Association
"The reason for S&P's downgrade of some insurers is its policy that no insurer with significant investments in U.S. securities may have a rating higher than the rating of those securities," Jones said in a statement.
California regulators will continue to monitor the financial condition of insurers doing business in the state, Jones said.
The National Association of Insurance Commissioners (NAIC) likewise downplayed the impact of the downgrade.
State “regulators and the NAIC will consider changes to our regulatory treatment if it becomes necessary in the future,” Susan E. Voss, president of the association, said in a statement.
Regulatory agencies nationwide protect consumers by overseeing providers of all types of coverage. These agencies have the authority to intervene if they suspect companies are at risk of becoming insolvent, are violating state laws or are operating in a financially dangerous manner.
The Washington commissioner’s office, for example, outlines several steps that it can take in dealing with troubled insurers:
--License suspension: This stops a company from selling new policies until it fixes its problems.
--Rehabilitation: The carrier stays in business and the commissioner manages it until its problems are addressed or the company is liquidated.
--Liquidation: The provider goes out of business and the commissioner collects its assets, converting them into cash to distribute to claimants against the company’s estate.
To read more about this and other car coverage issues, go to http://www.onlineautoinsurance.com/california/
where you will find informative resource pages and a free-to-use quote-comparison generator that consumers can use to get sample premiums for many vehicle makes and models.