We've referred to the insurance director of the Consumer Federation of America as “Insurance Industry Gadfly” J. Robert Hunter so often that I wouldn't be surprised if he'd been tempted to check his birth certificate to see if his mama had burdened him with that moniker. But the truth is that Bob has given the industry a ton of grief over the years, including a recent report accusing property insurers of “overcharging” to reap “excessive” profits. Thus, you could hear the industry's collective gasp when the news broke that the “legendary” Mr. Hunter had been tapped in Florida to help calculate property insurance rate reductions mandated by the recently passed reform law.
In appointing Mr. Hunter, Florida Insurance Commissioner Kevin McCarty described him as legendary. He is truly one of the great minds on issues surrounding the insurance industry, and I am grateful we were able to attract him to Florida to take on this very important project.
The industry might be more likely to describe Bob as “infamous,” but be that as it may, the former Texas insurance commissioner is already on the scene to crunch the numbers.
Florida's property insurance reform law allows private carriers to buy reinsurance from the state fund at below-market prices. Policyholders hammered on rates after two straight monster disaster years must see tangible savings as a result. Bob's job is to come up with a “presumed factor” by March 15 that will represent the savings on reinsurance enjoyed by primary carriers still in the state.
Once Mr. Hunter completes his task, each homeowners insurer will have to file a rate change reflecting the presumed factor for policies written or renewed on or after June 1, 2007. In the interim, carriers are not allowed to non-renew or cancel coverage.
This should be interesting. Mr. Hunter always seems to be gunning for the industry, but since leaving his post as Texas insurance commissioner, he's been relegated to blasting away in reports and press releases. Now he has more than a bully pulpit at his disposal.
Mr. Hunter–an actuary–has vowed to make sure carriers get “rates that accurately reflect the risk they are bearing.
Will carriers get a fair shake from their longtime nemesis? Bob (I know you're out there–you've responded to some of my blog entries in the past), you're welcome to comment as well.
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