Soaring homeowner policy premiums and non-renewals across the West have raised the profile of the insurance industry among state lawmakers and the public. A nonprofit is trying to make the complex web of state-level regulations easier to understand.
Insurance regulation is complex, in part, because it’s done state-by-state, meaning there are dozens of different schemes across the country.
“Of all the people that you talk with about how their lives are being upended by non-renewals and rate hikes, how many out of 10 do you think would be able to tell you what type of rate approval process Idaho uses, let alone its neighbors?” asked Kenny Stancil, deputy research director with the Revolving Door Project, which recently published maps illustrating key policy differences between states.
Despite having reported on the homeowners' crisis in Idaho for going on two years, this reporter didn’t know that the answer was a so-called “use-and-file” process, which allows insurers to offer policies at new rates while simultaneously filing them for review by the state regulator. Many other states in the West use “file-and-use,” which gives regulators a set number of days to object to rates set by insurers before they’re offered. Wyoming is the only state in the country with an “open rating system.” As sleep-inducing as the policies sound, Stancil said these and other differences can have a big impact on premiums.
Much of the data underlying the maps was already public, but not in an easily accessible or digestible format, Stancil explained.
“That's better than not having any of this data,” he said. “But the form that the data was in is just not very useful to most people. I think that one way we can contribute is to make it more user-friendly.”
The maps also detail differences in state regulator capacity, like total department budget, personnel and personnel per insurer that operates in the state.
“Without adequate resources, it's not possible for state level insurance offices to sufficiently oversee the powerful financial institutions that they've been tasked with regulating,” Stancil explained.
Stancil also mapped different state-level rules limiting how soon officials – including insurance regulators – can lobby their former colleagues after leaving their public agency roles.
“The problem is that a lot of these restrictions are really weak,” he said. “First of all, 21 states don't have any form of restriction.”
That includes a number of Mountain West states: Wyoming, Idaho, Nevada, Utah and Colorado, according to the project website.
This story was produced by the Mountain West News Bureau, a collaboration between Boise State Public Radio, Wyoming Public Media, Nevada Public Radio, KUNR in Nevada, KUNC in Northern Colorado, KANW in New Mexico, Colorado Public Radio and KJZZ in Arizona as well as NPR, with support from affiliate newsrooms across the region. Funding for the Mountain West News Bureau is provided in part by the Corporation for Public Broadcasting and Eric and Wendy Schmidt.
