Oct. 12, 2005
 
Insurance Commissioner: Auto, Homeowner Insurance Rates Have Been Reduced
 
By HNN Staff
 
Charleston, WV (HNN) – In a meeting recently with the select committee on Insurance Availability and Affordability, Insurance Commissioner Jane Cline assured legislators that rates have been reduced. This reduction in rates was the result of a promise the insurance companies made based on elimination of third party bad faith law suits.
 
These suits permitted trial lawyers to sue insurance companies for their entire assets. Under legislation passed at the last legislative session the Insurance Commissioner will now determine if insurance companies have acted in bad faith, thereby removing these suits from our court system.
 
Commissioner Cline stated that all insurance companies that pledged to make rate reduction filings as a result of the passage of insurance reforms during the 2005 regular session have done so. The total reduction in premium rates to date is $66,078,718 (they had promised a $50 million rate reduction).
 
She said "the bulk of the reductions are just now beginning to affect RENEWAL business. For the majority of policyholders, an insured with a renewal date prior to the effective date of the rate reduction for renewal business will not realize the rate decrease until his/her next renewal. " She further stated that not all policy holders will experience a rate reduction because not all companies agreed to a rate reduction (although 74% of the personal auto market and 24% of the homeowner market insurers did agree to a rate reduction) and that such circumstances as additional drivers or accidents/violations could result in increased premiums.
 
Eliminating third party bad faith lawsuits was a very controversial issue during the last legislative session. However, Commissioner Cline had made a through study of the issue and made her recommendation that taking these suits out of the court system would result in substantial savings to policy holders in West Virginia.
 
We have been told that insurance rates would have been reduced without the reforms made by the legislature. Commissioner Cline addressed this issue and assured us that she had thoroughly researched this question and came to the conclusion that rates would not have been made without the insurance reforms adopted by the legislature.