- 4,096
I never heard of any state laws that addresses loss ratio's.
Do you know the specific law?
Is this in a particular state?
Reality Emerging
- Thread starter Winter_123
- Start date
I never heard of any state laws that addresses loss ratio's.
Do you know the specific law?
Is this in a particular state?
- 9,744
All DOI's that I know of monitor loss ratios in all lines. If you're not paying out a certain amount in claims - no premium increase!
- 4,096
Interesting I did not know that.
This bill would force the carriers to give back most of any unused portion of the premium to the insured.
As I said earlier, they won't get any players willing to join that game.
As Paul said, the DOI in every state reviews and set's loss ratios and statutory reserve levels. If they don't meet the guidelines they go into receivorship or rehab.
If Obamington declares and 85% PLR they will not have any takers. That leaves nothing for reserves.
No takers means no premium taxes.
No premium taxes means the states will collapse without another major source of revenue. Even moving folks from insured plans to govt plans further erodes the premium tax collections.
Your elected idiots, save for a few former governor's, have no clue what happens at the state level.
- Thread starter
- #25
- 2,908
As you noted many carriers will not sign up. However, even with those who sign up it will be a crap shoot because most of them have no realistic claims history with GI plans to be able to calculate rates. Even if they were trying to be fair or just trying to make a certain margin, they will go a long time before they know what the premium should look like. So there is tremendous pressure on the carriers to come up with a competive/low premium but then that will be followed by years of gyrations as they try to find a workable number. And of course with GI you cant trap a client into a policy because they have a pre-x and can't move or get into another one. You raise the rates, they just switch at will. Lots of gyrations ahead.
- 15,041
That'll be a hoot. They will gyrate right into bankruptcy. The next big bailout will be for health insurers. Be interesting to see how that goes over!
But of course they'll just let them fail, and Americans will lament how good they had it with the insurance companies. Instead, they'll have the government run public option putting the screws to them.
- 868
Oh Please
I personally expect a landslide of business with a mandate and a guaranteed issue plan. Commission will probably be 10-20%. 10% on your marquee carriers/20% on your 2nd tiers with GA contracts.
These changes wont be enacted till 2012 or so. The plans and actuarials and pricing dont exist for this yet.
Remember what we get as a commission is generally not correctly called a commission its a finders fee (1st year) and a service fee (renewal). They will still need us to find business for them; only BCBS could potentially rely on an exchange as primary marketing so they will still need to compensate us well.
I personally expect a landslide of business with a mandate and a guaranteed issue plan. Commission will probably be 10-20%. 10% on your marquee carriers/20% on your 2nd tiers with GA contracts.
These changes wont be enacted till 2012 or so. The plans and actuarials and pricing dont exist for this yet.
Remember what we get as a commission is generally not correctly called a commission its a finders fee (1st year) and a service fee (renewal). They will still need us to find business for them; only BCBS could potentially rely on an exchange as primary marketing so they will still need to compensate us well.
Sure they do.
Most, if not all of the major med carriers are also in the small group business. Many of the rules that apply to small group may transition over to individual.
They can also access actuarial and underwriting services through folks like Milliman.
Doesn't take that long if you know how to trend your experience. A smart carrier will have an idea within 18 - 24 months. Some may over-correct sooner or later but it is not that difficult.
I doubt it.
Carrier have a much better track record on managing health insurance than the elected idiots in Obamington do.
- - - - - - - - - - - - - - - - - -
Sure they do.
Most, if not all of the major med carriers are also in the small group business. Many of the rules that apply to small group may transition over to individual.
They can also access actuarial and underwriting services through folks like Milliman.
Doesn't take that long if you know how to trend your experience. A smart carrier will have an idea within 18 - 24 months. Some may over-correct sooner or later but it is not that difficult.
I doubt it.
Carriers have a much better track record on managing health insurance than the elected idiots in Obamington do.
Last edited:
In good years, a carrier can actually run a combined ratio of over 100% and still make money. For those not familiar with the term combined ratio, it is:
(Incurred losses + Expenses) / Earned Premium = Combined Ratio.
So you would think that if you are over 100%, you are losing money (spending more than you bring in), and in the insurance world, you are.
What is left out of this equation is the income generated by the billions of dollars in reserves that most carriers have.
Why is this relevant? Because a carrier will not give up their reserves, where they might actually make more money than they do on the insurance side, without a big fight. They are obligated to have the reserves, and need to have the reserves. Doing so has a side benefit that if they do not have catastrophic losses, they can make money off of the investments where they have placed the reserves.
Now, in reality, most carriers invest pretty wisely, very conservatively. Unfortunately, a good portion of it was in mortgages that were thought to be pretty safe. Ooops...
A governments plan reserves are your pockets.
Dan
(Incurred losses + Expenses) / Earned Premium = Combined Ratio.
So you would think that if you are over 100%, you are losing money (spending more than you bring in), and in the insurance world, you are.
What is left out of this equation is the income generated by the billions of dollars in reserves that most carriers have.
Why is this relevant? Because a carrier will not give up their reserves, where they might actually make more money than they do on the insurance side, without a big fight. They are obligated to have the reserves, and need to have the reserves. Doing so has a side benefit that if they do not have catastrophic losses, they can make money off of the investments where they have placed the reserves.
Now, in reality, most carriers invest pretty wisely, very conservatively. Unfortunately, a good portion of it was in mortgages that were thought to be pretty safe. Ooops...
A governments plan reserves are your pockets.
Dan
- 14,808
One thing is certain, we are not Canadians and I don't mean any disrespect to Canadians. But again, they can pass whatever they want to pass. If it doesn't work every trial lawyer in this country will file suit.
