As complaints regarding insurance rate hikes begin to weigh on regulators in New York, the state’s Financial Services Superintendent, Benjamin Lawsky, has announced a new investigation into the matter. Regulators will be investigating the data submitted by insurance companies to justify their premium increases. The goal is to determine the accuracy of the data that these insurers use. These investigations will work alongside the regular rate review process and insurers will not know when they will be investigated.
Lawsky notes that any errors made by insurers in their requests for rate increases could mean large rebates for consumers. The new investigation will be funded by a $4.4 million grant from the Obama administration as part of the Affordable Care Act. The health care law, passed in 2010, encourages states to scrutinize the rate proposals coming from insurers and provides state regulators with resources to accomplish this aim.
Insurers have shown opposition to the unpredictable investigations, to which Lawsky responded with “what do you have to worry about if you are doing this [rate proposals] honestly?” Regulators will work to ensure that companies have enough control over their own rate review processes. If insurers are found lacking in accuracy, they will be required to return money to policyholders based upon the severity of their failure. The investigations will begin this year, but Lawsky is not keen to give exact dates so as to ensure the unpredictable nature of the endeavor.
Live insurance news updates.