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The Insurance Crisis is Phony
Insurance companies are jacking up premiums for auto, home and business insurance. In some states, coverage for doctors, schools and non-profits is disappearing. The insurance companies say they have to raise premiums to cover huge increases in claims. But the truth is the insurers are trying to offset their recent losses in the stock market by boosting their prices. The insurance companies manufactured a similar crisis in the 1970's, and then again in the 1980's. But the insurance industry has given millions of dollars to state and federal lawmakers to make sure they forget the lessons of the past.
Creating the Insurance Crisis: Insurance Companies Cook Their Books to Justify Price-Gouging
Insurance companies make most of their money from investing premiums we pay them. So when their investments go bad, or interest rates drop (both are happening now), they try to offset their losses by boosting insurance rates. more...
Analyses of the Current Insurance Crisis
Insurance companies are hiking premiums to offset losses from their stock market investments. Many insurers invested in Enron, WorldCom and other losers, according to an analysis of major insurance companies by FTCR. Click below to read the study and the press release:
Risky Business: Insurers' Increasingly Risky Investments In Corporate America Cause Insurance Premiums To Skyrocket.
Press Release: Insurance Industry's Enron, WorldCom Losses Lead To Rate Hikes.
Background Material from the Last Phony Crisis
They say those who ignore history are condemned to repeat it. Insurers manufactured a crisis in the mid-1980s when interest rates dropped. We have assembled research and analysis produced by the non-profit National Insurance Consumer Organization (NICO) between 1985 and 1988 which chronicled the insurance crisis of the mid-1980's and documented that it was manufactured by insurers in order to boost their own profits.
Insurer Claims of Greatest Losses Ever A Fraud. NICO Press Release 1/6/86.
The Liability Crisis in Insurance. Testimony of J. Robert Hunter, NICO, Before the U.S. House of Representatives Committee on Public Works & Transportation, Subcommittee on Investigation & Oversight (1/22/86).
Premium Increases in the Insurance Industry. Testimony of Jay Angoff, NICO, Before the U.S. Senate Judiciary Committee (2/21/86).
Profitability of the Property/Casualty Insurance Industry. Testimony of Johnny C. Finch, General Accounting Office, Before the US House of Representatives Subcommittee on Oversight, Committee on Ways and Means (1986).
Washington's Tort Reform Experience - The Impact of Insurance from the Regulator's Viewpoint. Remarks submitted to the US House of Representatives Subcommittee on Commerce, Consumer Protection & Competitiveness by WA Ins. Comm. Dick Marquardt (10/7/87).
Insurance Crisis Creation Chronology. NICO 1986.
And Now the Real Facts on Insurer Profitability. NICO 1986.
How To Tame the Insurance Industry Cycle & Make the Legal System More Efficient: A Suggested Legislative Agenda for 1987 - Part 1 - NICO 8/8/86.
How To Tame the Insurance Industry Cycle & Make the Legal System More Efficient: A Suggested Legislative Agenda for 1987 - Part 2 - NICO 8/8/86.
Insurance Industry Income and Payouts. NICO 1986.
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