EDITORIAL: There's a Red Flag Waving Here

By The Macon Telegraph, Ga.

Aug. 29--Seventeen years ago, the Georgia public, fed up with car insurance rates that almost doubled from the 1982 to 1988, voted an insurance commissioner out of office and replaced him with one who promised to fight automobile rate increases. And following the 1990 campaigns, the Georgia General Assembly changed the law, giving the state insurance commissioner approval power over rate increases. Because of that, Georgia now has the fourth lowest rates in the Southeast and is among the top 20 lowest in the country, according to Allison Wall, executive director of Georgia Watch, a consumer watchdog group.

Now comes state Rep. Bill Hembree, R-Winston, an insurance agent who wants to turn the clock back a bit with a proposal to permit insurance companies to raise rates without the insurance commissioner's approval. This is necessary, he told the House Insurance Committee (of which 10 of the 25 members are in the insurance business, according to the Atlanta Journal-Constitution) because a change "would encourage competition and reasonable rates." And state Rep. Rich Golick, R-Smyrna, a committee member whose job includes serving as legal counsel for Allstate Insurance, also questions whether or not the Georgia market is as competitive as it could be. They note that allowing companies to quickly lower or increase rates will increase competition and could drive costs down. And, under the proposal being considered, the insurance commissioner could still veto an excessive rate increase after it was announced.

Maybe, but it seems there is a small red flag waving in the distance. State Insurance Commission John Oxendine frowns on the proposal, noting the present system seems to be working very well. He points out that there is a good reason why auto insurers would want to be able to boost rates at will. Since auto insurance is required by law if one wishes to drive a car, he told the Journal-Constitution, with the proposed change, insurers "could charge whatever they want."

That seems to be a pretty good reason for keeping the insurance commissioner as the gatekeeper over vehicle insurance costs rather than the stacked, in favor of the industry, House Insurance Committee.

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