Auto insurers don't need the green light

Nobody likes paying their car insurance bill. But if you want to drive legally in Georgia, insurance is required. And across much of the state, you must have a car in order to get around.

It's a pretty good deal for car insurers. From year to year, they know that millions of Georgia drivers will have to buy their product. It's like shooting fish in a barrel.
So why are state lawmakers trying to make it easier for these companies to raise your rates?

House Bill 867 by Rep. Bill Hembree (R-Winston), would allow car insurers to raise your rates without getting "prior approval" from the state insurance commissioner's office.

Currently, because of prior approval, Insurance Commissioner John Oxendine has the authority to examine the company's finances, and the power to reduce or stop a rate hike altogether.

This safeguard is especially important in Georgia and in 46 other states where car insurance is required because it keeps companies honest when they put a price tag on a product they know you have to buy.

It also helps prevent race-to-the-bottom price wars that can lead to unpaid claims, and even bankruptcy for insurers who don't maintain appropriate reserves.

The Georgia Legislature set up the "prior approval" system 20 years ago when auto insurance rates almost doubled during the 1980s. As a result of the oversight and accountability, insurance rates fell and remained flat through the 1990s.

According to online independent insurance broker Insurance.com, Georgia now has the fourth cheapest auto insurance rates in the Southeast.

The average rates in Georgia dropped in 2005 and 2006, and have decreased by almost 5 percent so far in 2007.

However, if House Bill 867 passes, insurance companies will be able to hike rates whenever they want, without getting approval and without anyone looking over their shoulders to check their math.

When some state legislators tried to pass a similar bill in 2005, insurance lobbyists claimed that it would make it faster and easier for them to lower your insurance rates. But I've never known the insurance commissioner to delay or stop a rate reduction.

The fact is that Georgia has a thriving insurance market, one that boasts hundreds of carriers and very affordable rates when compared with other states.

The system is working; consumers are getting fair rates and insurers are competing with one another to sell you coverage.

Our leaders would be wise to not tinker with an approach that has proved so successful.

www.ajc.com