Seen at Insurance Journal:
A proposal by Michigan Governor Jennifer Granholm to create a state automobile and homeowner insurance consumer advocate is being called “unnecessary and duplicative,” by one property/casualty insurance trade association.
“We believe it is the role of the Michigan Office of Financial and Insurance Services (OFIS) Commissioner to advocate for consumers,” said Pete Kuhnmuench, executive director, Insurance Institute of Michigan (IIM). “Funding an additional position at taxpayer expense may not be the best use of the state’s limited resources.”
The IIM questions why the position is being suggested when auto and homeowners insurance rates and complaints against insurance companies are all declining.
I know I’ll be run out of the actuarial guild for saying this, but I actually think that a case can be made for the having a consumer advocate involved in the regulatory process. True, the consumer advocacy role is theoretically supposed to be borne by the Insurance Commissioner and his/her staff. But something can be said for having a particular individual to highlight, um, creative assumptions in rate filings, and to direct sunlight on insurer operations that don’t necessarily work as well as they should.
Of course, that being said, I do still believe that excess regulation and bureaucracy still should be avoided, where possible. In many cases, the free market should take care of many (if not most) games insurers might play.