In most states, legislation requires rating manuals and rating plans that must be filed for approval by the regulatory authority before they are put into application. Insurers are permitted to cooperate in the gathering and sharing of data for rating purposes in the preparation of these manuals and plans. These rating organizations are licensed and supervised by the individual states. (more…)

Profitability in the insurance industry is determined by combining both underwriting results and investment results. Despite incurring substantial underwriting losses over the 10-year period 1976 through 1985, the property/casualty insurance industry has more than offset those aggregate losses with investment gains. The underwriting losses resulted, in part, from the industry’s cash flow underwriting pricing strategy in which companies sacrificed underwriting gains in an attempt to attract more business and thereby enhance investment gains. We estimate that the industry had about $81 billion in after-tax income over this period. Because of the cyclical character of the industry’s underwriting experience, we believe that data covering longer periods, rather than concentrating on the last few years, provide better perspective on the industry’s profitability. (more…)

In many ways, auto insurance reflects the risk factors of aging as clearly as any kind of insurance. Regardless of age, auto insurance remains controversial because it’s influenced by behavioral and demographic realities that some people would rather avoid. (more…)

The McCarran-Ferguson Act was adopted in 1945 after extended controversy over the jurisdiction of state and federal governments in regulating the business of insurance. The principal objective of the Act was to establish the primacy of the states in regulating the industry. The purpose clause of the Act states that the continued regulation and taxation of the business of insurance by states are in the public’s best interest. (more…)

The chances are that without realizing it, you might in fact have already tapped into the long-term health care system, although not into a nursing home. We like to think of long-term care as the concern of senior citizens, but the term has a broader legal meaning. Long-term care involves becoming cognitively impaired, or the expectation that you will be unable to manage at least two of the six activities of daily living (more…)

Be on the lookout for unscrupulous insurance agents who will give you wrong and misleading car insurance quotes when you are shopping insurance. Here is how they do it. When they quote your insurance, they will give you every discount under the sun even if you don’t qualify for them. When you get your policy and it has been underwritten by the insurance company, the quote will be adjusted (more…)