John Doak has completed the investigation into the way rate increases are conducted in the state.
State Insurance Commissioner John Doak has now determined that the Oklahoma earthquake insurance market is not currently functioning in a way that can be considered to be competitive.
The commissioner has now issued an order that will alter the way earthquake insurance rates are changed.
The order has been issued with the intention of altering the way Oklahoma earthquake insurance rate increases are filed with the Insurance Department, in order to make certain that consumers are benefiting from a purchasing environment with adequate competition. The commissioner had previously announced that an investigation was underway as a result of a suspicion that the market for this type of insurance coverage was noncompetitive.
Oklahoma earthquake insurance companies will no longer be allowed to file rates that they have already set.
Current regulations state that insurance companies are allowed to set the rates that they wish to charge to customers, then file those rates with the Oklahoma Insurance Department. The commissioner’s new order has changed that regulation. Insurers will now be required to submit a proposal for their insurance rate increases. The proposals are submitted to the department from which they must then receive approval before they can charge them to consumers.
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Carrie Burkhart, a spokesperson for Commissioner Doak, has said that in terms of immediate impact on the insurance premiums being paid every month, it is unlikely that there will be any change at all and that if there is, that change will be very slight. The purpose of the changes in the way insurers will be filing to increase their rates will be to make sure that rates will remain competitive and affordable when moving into the future.
Over the last few years, the number of quakes experienced in the state have skyrocketed. It is believed that they are the result of underground wastewater disposal that has become extremely commonplace from the state’s oil and gas production. These tremors have also greatly increased the demand for Oklahoma earthquake insurance, which was virtually unheard of before this trend began.