Miami, FL, June 29, 2012 --(PR.com
)-- Florida landed at the bottom of the pile in the R Street Institute’s state-by-state ranking of regulatory departments, underscoring the politics and regulation behind insurance issues in the Sunshine State that hurt its standing in the think tank’s first-ever “report card,” according to Online Auto Insurance.
In the report
released this month by the institute, which states on its website that it defends “free markets” and “limited, effective government,” Florida got by far the lowest point total of any state in the U.S., receiving -32 points for an “F” grade. The report compiled points through 14 categories.
One of the more major deductions that hurt the state's overall grade was in the category of “politicization.” States where industry regulation was a major campaign topic or “hot button political issue” led to point deductions. The Sunshine State was deducted 6 out of a maximum 10 points because of recent developments in its personal injury protection (PIP) coverage system that Gov. Rick Scott, who made reform a major campaign topic, said was inflating rates for car insurance in Florida
“The introduction of political pressure to the process of insurance regulation inevitably leads to negative consequences,” the report stated.
Only four other states were deducted the same or higher number of points for politicization. The institute applauded Florida’s efforts to reform its “long-troubled” PIP system but added that the “comprehensive reform package” approved by legislators also introduced rate restrictions. Under the reforms, insurers will be required to justify why the reforms didn't allow them to reduce their rates by at least 10 percent by October 2012 and by at least 25 percent by January 2014.
The Sunshine State was also dinged for how it handled territorial ratings. States allow insurers to use such territorial ratings as one of the many factors to set rates. For example, where a policyholder lives serves as an indicator to insurers on what kind of rates and premiums to offer him or her; but the degree to which regulators adjust insurers’ ratings differs between regulatory departments in each state.
The Sunshine State is one of 10 states where regulators “enforce restrictions on the use of territory that are much more stringent than the norm” and was deducted the maximum number of five points in the report card’s “territorial rating” category. Regulators in the Sunshine State enforce territorial ratings that were set in 2006.
The state still performed well in some categories, including “fraud enforcement” for which the state garnered the maximum number of five points; only New Jersey, New Mexico and California were awarded the same number of points in the category.
For more on this and related issues, head to http://www.onlineautoinsurance.com/florida/
for access to an easy-to-use quote-comparison generator and informative resource pages.