Letter: Representative of insurers has different view

Wednesday, April 25, 2001 | 9:13 a.m.

Your April 17 editorial, "Don't cut oversight of insurers," suggests that subjecting insurance rate changes to the insurance commissioner for prior approval assures lower premiums for consumers. That sounds good, but it's not true. Eight of the 10 states with the highest auto insurance premiums have prior approval laws. The fact is that the price of auto insurance is determined by costs -- litigation, medical care, auto repairs -- not by a state's system of regulation.

Senate Bill 4 is one of the few bills before the Legislature that offers the hope for lower premiums. Today's law discourages insurers from competing on price. An insurer that wants to lower its rates must wait for approval from the state. By the time that approval is granted, the rates may no longer reflect current conditions. This hurts competition and discourages an insurer from taking the risk of lowering its rates.

SB4 merely creates a narrow range (7 percent up or down) in which an insurer can have some rate flexibility without getting approval from the state. But the bill does not take away any powers from the insurance commissioner. SB4 allows the commissioner to step in at any time and prevent an insurer from using rates that are excessive or unfair.

The editorial describes SB4 as one of the bills that receives "little attention." A Senate committee considered the bill during three public hearings and the bill was debated on the Senate floor. That's not an example of "a little noticed bill." The supporters of SB4 welcome public attention and debate on the bill. We believe that the bill stands up to scrutiny and benefits Nevada consumers.

SAMUEL SORICH, Vice president, National Association of Independent Insurers, Sacramento