I had missed this Hartford Courant article until I encountered a mention of it in a post at Connecticut Local Politics. Quoting the Courant:
Andover Cos., a Massachusetts-based insurer, recently began requiring shoreline customers to install hurricane shutters on windows or their policies would be canceled. The requirement was allowed by new guidelines approved by Insurance Commissioner Susan Cogswell earlier this summer.[.]
I will admit that on the surface, that sounds extreme. However, having worked a little with catastrophe models and capital adequacy requirements, it wouldn’t be too hard to imagine a regional insurer looking at their PML versus their surplus, get uncomfortable, and look for new ways to reduce exposure. Obliging the insureds who tie up the most capital to take preventive action or encouraging them to go elsewhere could easily look more attractive than a ratings downgrade.
(Note: I’m not familiar with the Andover filing or the circumstances surrounding their new guidelines. The above was just pure conjecture and my rambling on during a holiday weekend.)
Another Courant story follows up reminding us that our AG’s favorite hobbies seem to be grandstanding and issuing subpoenas:
Attorney General Richard Blumenthal said Thursday he has issued subpoenas in an antitrust investigation into nine insurance companies that are requiring homeowners to install costly hurricane shutters or risk losing their coverage.[.]
The requirements could be coordinated, which could constitute illegal “concerted activity among carriers or their reinsurers,” Blumenthal said. He singled out one company, Andover Cos., which he said gave its insured customers 45 days to comply.
I think it’s far more likely that home office management and/or product managers got wind of what one company was doing, and jumped on the bandwagon, either thinking it a good idea or not wanting adverse selection. However, that wouldn’t have made quite as impressive a headline. (Again, pure speculation on my part; I haven’t worked directly with personal lines coverages in a few years.)