Editorial: Don’t cut oversight of insurers

Tuesday, April 17, 2001 | 9:12 a.m.

Alittle-noticed bill is making its way through the Legislature that -- if left intact -- could have a huge impact on Nevadans with insurance policies. Senate Bill 4 would allow insurance companies to raise their rates by as much as 7 percent on automobile or homeowners policies without first having to get the approval of the state insurance commissioner. Under this anti-consumer legislation, the insurance commissioner would only be allowed to review the rate changes after they went into effect.

Supporters of the legislation, which passed the Senate last week by a 15-5 vote, assert that even more insurance companies would be enticed to do business here. In theory this would mean more competition and lower rates. But if insurance companies aren't already lured to the fastest growing state in the nation, it's hard to believe that more quality firms would suddenly appear in Nevada. And while the state insurance commissioner still would have the power to review the rates, this after-the-fact perusal would send a signal to insurance companies that raising rates would not subject them to the tough oversight they would have experienced by first going before a regulator.

During the hurly-burly of a legislative session, many bills fly under the radar screen and receive little attention. The Nevada Legislature meets just once every two years for only 120 days, which means that a lot gets packed in during a short period. Lawmakers spend most of their time on weighty issues, such as taxes and schools, leaving other policy changes to get much less scrutiny. But this legislation is important because insurance policies represent some of the biggest bills a consumer receives. Insurance for homes and vehicles is incredibly costly -- yearly auto insurance rates typically are at least a thousand dollars, and that's for people who have good driving records. More oversight, not less, is needed.