NAIC now intends to discuss the issue and come up with ways to overcome this discrepancy.
The results of an insurance industry study has shown that the gap between the cost of Alaska insurance and the rate at which wages are increasing is widening.
As a result of this information, the National Association of Insurance Commissioners (NAIC) vice president, Joe Biden sat down with the association in a meeting that was intended to help to manage and ease this issue of rate reviews for premiums.
Commissioners across the country were assigned different levels of authority for improved premium increase control.
Buying Alaska insurance can be quite expensive. Upon examination of quotes obtained online for auto coverage, for example, residents find that the bodily injury and property damage limits are very high. This has become quite a controversy within the industry of the state.
The National Economic Council (NEC) has also published a report saying that the cost to the state’s residents is growing.
It was within that report that the discrepancy was found between the rate at which premiums were increasing and that of the wage hikes That gap between paychecks and auto coverage quotes was also found to be widening. Independent analysts have added to this knowledge by stating that the cost of coverage is causing individuals to hesitate to purchase a new policy, and existing policyholders are renewing their protection less frequently. Those analysts have linked this issue exclusively to the difference between an individual’s income and their premiums.
The NEC statistical research was performed by the NEC in order to discover what was causing the problem also discovered some additional information. For example, the average premium increase for Alaska insurance was 145 percent over the last decade. During the same timeframe, wages increased by 35 percent.
Comparatively, Florida, a state that faces a very similar problem, saw an increase of 121 percent in the last ten years for auto policies, while their wages rose by only 43 percent. Michigan is another state that was found to suffer this same issue.
Government regulators are now putting forth proposals for a massive review of the Alaska insurance industry and are hoping to implement changes as early as possible in order to overcome this problem.