While we are most grateful that the NAIC will undertake this important research and we look forward to working with the NAIC P/C Committee on this effort, the NAIC is not considering, and indeed has no authority to initiate, a number of urgent actions that AIR�s letter requests of you to control excessive prices today.� Therefore, while we await the results of the NAIC analysis, we would like to know what you plan immediately to do to help those who are being gouged now and need your assistance right away.

You will recall that our July 30 letter contained a list of steps that we asked you to take.� The following is a list of actions that we ask you to take immediately.� Please let us know what your insurance department plans to do with regard to each of the following:

 a. Regulate excessive pricing.� One cause of the cycle is the lack of regulatory action to end excessive and inadequate rates during the different phases of the cycle.� Please start now by regulating the excessive prices being charged by insurers today in your state.� At least hold the necessary hearings to determine if the prices are not excessive.�

b. Advise your legislators that the solution to prevent shock rate increases such as we are now experiencing is insurance reform, not �tort reform.�

c. Freeze particularly stressed rates until the examination of the prices and remarkable jumps in loss reserves can be fully analyzed.� For instance, medical malpractice and homeowner rates should be frozen.� A rollback of unjustified rate increases that have already taken effect should then be in order.

d. Require that risks with poorer experience pay more than good risks in lines of insurance where such methods are not in use today.� For example, require medical malpractice insurers to use claims history as a rating factor, and to give that factor significant weight.� Auto insurers use an individual�s driving record as a rating factor; workers� compensation insurers use the employer�s loss experience as a rating factor� so-called �experience mod.�� Malpractice insurers should do the same.� In addition, you should require all medical malpractice insurers to offer all �good� doctors�� i.e., all doctors meeting an objective definition of eligibility based on their claims history, their amount of experience and perhaps other factors � the lowest rate.

e. Create a standby public insurer to write risks when the periodic cycle bottoms and hard markets occur, such as a medical malpractice insurer funded by a start-up loan from the state to compete with the existing malpractice carriers.� Several states have created such carriers to write workers� compensation, and in many states such carriers have helped bring down workers� comp rates.� Similarly structured medical malpractice insurers should have similar success.

f. More strongly regulate auto and homeowners insurance to prevent shock price increases and insecurity for policyholders.� For example, you must prevent insurers, like State Farm, from overreacting by not writing new business in some states and by adopting draconian underwriting rules for renewal business.� If the rate increases are shown to be high due to corporate policy (such as State Farm holding down prices as a marketing strategy), prices should not be allowed to go up suddenly but be spread over at least a three-year period to avoid �sticker shock� for your state�s citizens.

g. Ask the NAIC to stop implementation of the deregulation of commercial rates and forms that the NAIC is unwisely pushing at this time.� Oppose the implementation of such deregulation in your state.

While the above measures are by no means the only actions our July 30 letter requests, they are the most urgent.� Please advise us, Citizens for Consumer Justice, Dalkon Shield Information Network, Pennsylvania Citizens Consumer Council, Pennsylvania Public Interest Research Group, and People�s Medical Society (see addresses below) of actions you are taking to help your stressed commercial and individual consumers of insurance.

Thank you for your prompt response. 

Yours truly, 

J. Robert Hunter
On Behalf of Americans for Insurance Reform

Lauren Townsend, Executive Director
Citizens for Consumer Justice, Philadelphia, PA

Karen Hicks, Chair
Dalkon Shield Information Network, Bethlehem, PA�

Dr. Louis Meyer, President
Pennsylvania Citizens Consumer Council, Edinboro, PA

Beth McConnell, State Director
Pennsylvania Public Interest Research Group, Philadelphia, PA 

Charles Inlander, President, People�s Medical Society, Allentown, PA  

Americans for Insurance Reform:

Alabama Watch, AL
Arizona Coalition Against Domestic Violence, AZ
Arizona Consumers Council, AZ
Boston Women�s Health Collective, MA
California Advocates for Nursing Home Reform, CA
Caribbean Women's Health Association, Inc., NY
Center for Economic Justice, TX
Center for Insurance Research, MA
Center for Justice & Democracy, NY
Citizen Action/Illinois, IL
Citizens� Committee to Protect the Elderly, VA
Citizens� Environmental Coalition, NY
Citizens for Consumer Justice, PA
Citizens' Health Advocacy Group, WA
Coalition for Consumer Rights, IL
Colorado Progressive Coalition, CO
Colorado Public Interest Research Group, CO
Community Food Resource Center, NY
Concerned Citizens of Clarence, NY
Connecticut Public Interest Research Group, CT
Consumer Federation of America, DC
Consumers for Civil Justice, NJ
Consumers United/Minnesotans for Safe Foods, MN
Cornerstone, MN
Dalkon Shield Information Network, PA
Democratic Processes Center, AZ
DES Action, CA
Jennifer Dingman, PULSE of Colorado*
Disabled in Action of Metropolitan New York, NY
Empire State Family Farm Alliance, NY
Families Advocating Injury Reduction, IL
Families for Improved Care, OH
Florida Public Interest Research Group, FL
Foundation for Spinal Cord Injury, Prevention, Care and Cure, MI
Foundation for Taxpayer and Consumer Rights, CA
Free Hand Press/Mouth Magazine, KS
Georgia Coalition Against Domestic Violence, GA
Georgia Public Interest Research Group, GA
Good Old Lower East Side, NY
Gray Panthers National Office, DC
Greater New York Labor-Religion Coalition, NY
Headway for Brain Injured, Inc., NY
Homeowners Against Deficient Dwellings, MO
Illinois Public Interest Research Group, IL
Indiana Public Interest Research Group, IN
Joint Public Affairs Committee for Older Adults, NY
Massachusetts Public Interest Research Group, MA
Mental Health Association of New York State, Inc., NY
Michigan Consumer Federation, MI
Minnesota Consumers Alliance, MN
Regene Mitchell, Consumer Federation of California, CA*
National Community Reinvestment Coalition, DC
National Gay and Lesbian Task Force, DC
National Hispanic Council on Aging, DC
National Women�s Health Network, DC
New England Patients� Rights Group, Inc., MA
New Hampshire Public Interest Research Group, NH
New Jersey Public Interest Research Group, NJ
New Mexico Coalition Against Domestic Violence, NM
New Mexico Consumer Action, NM
New York Public Interest Research Group, NY
New York State Coalition Against Domestic Violence, NY
New York State Tenants and Neighbors Coalition, NY
New York StateWide Senior Action Council, NY
North Carolina Hunger Network, NC
North Carolina Public Interest Research Group, NC
Ohio Domestic Violence Network, OH
Oregon Consumer League, OR
Oregon State Public Interest Research Group, OR
Patient Information Alliance, NY
Pennsylvania Consumer Council, PA
Pennsylvania Public Interest Research Group, PA
People�s Medical Society, PA
Progressive Tenants Association, Inc., NY
Public Interest Research Group in Michigan, MI
Rhode Island Public Interest Research Group, RI
Safetyforum.com, VA
Senior Action in a Gay Environment/ Queens, NY
SmokeFree Educational Services, NY
Statewide Emergency Network for Social and Economic Security, NY
Texans for Public Justice, TX
Texas Watch, TX
United Policyholders, CA
USAction, DC
U.S. Public Interest Research Group, DC
Utah Citizens Alliance, UT
Vermont Public Interest Research Group, VT
Washington Public Interest Research Group, WA
Western New York Committee for Occupational Safety and Health, NY
West Harlem Environmental Action, Inc., NY
West Virginia Citizen Action Group
Woodstock Institute, IL 

* Organization name for purposes of identification only.

(Endorsement of AIR does not imply endorsement of other Center for Justice & Democracy programs.)