Insurance Quotes & Advice

Earlier today, the U.S. House passed the Genetic Information Nondiscrimination Act of 2008(GINA) by a vote of 414-1.  The bill which was also approved by the Senate with a 95-0 vote last week is expected to be signed into law by President Bush when it crosses his desk.

GINA would prohibit employers and health insurers from discriminating against individuals based on information gained from genetic testing.  They would also be prohibited from seeking or disclosing any type of genetic information.

The proposed law could have a large impact on the health insurance industry in the future.  Health insurers would be unable to set premiums or deny claims to individuals that may have higher risks to certain diseases based on their genetic makeup.

While genetics is already a controversial subject, many doctors have claimed that research has been slowed due to the fear many patients have that this information could be used against them.  The passage of the bill along with the completion of human genome project could make genetic testing much more widespread, which could lead to medical breakthroughs in the future.

In a sign that the credit crisis maybe nearing an end, the financial services sector including the insurance industry is beginning to heat up with merger and buyout activity.  The insurance industry has faired better than their counterparts in the commercial banking and securities brokerage sectors, amidst the fallout of the sub prime collapse.

Insurance companies have taken their fair share of lumps and losses will eventually eclipse what was paid out for Hurricane Katrina.  For the most part it was in isolated pockets like bond insurance that chose to deal directly with mortgage backed securities.  However, the underlying nature of much of the industry has let it avoid most of the shortsightedness of the rest of the finance world.

Due to the type of financial products insurance companies sell, they must be much more risk adverse, which has served them well in a faltering economy.  The must also maintain much stronger capital positions in order to meet claims obligations, thus they have large cash reserves on hand and haven’t been affected as much by the credit crunch.

A growing concern for the future is the drop in investment income that makes up the bulk of the profits for the industry.  Though with stocks prices depressed, companies that have weathered this storm the best are out looking for deals.

As is with life, the strong will survive while the weak will get gobbled up by their larger brethren.

Last week a California Superior Court denied Allstate’s appeal on an auto insurance rate reduction ordered by the state’s insurance regulater.

“The court rejected Allstate’s efforts to delay immediate savings to consumers,” said state Insurance Commissioner Steve Poizner in a news release. The insurer sought a delay from the court while it appeals a state decision “that Allstate’s existing passenger automobile rates are 15.9 percent in excess of what the law permits”

Allstate, which is the fifth largest auto insurer in the state was disappointed with the court’s ruling and released this statement.

“Allstate wants to lower its auto rates and reduce the cost of auto insurance in California, especially during difficult economic times for our customers,” said spokesman Peter DeMarco in a news release. “However, the proposed auto rate reduction Allstate is being asked to take is neither fair nor reasonable. We are reviewing the details of the Court’s ruling and will continue to explore our options going forward.

California’s auto insurance regulatory structure requires state approval before any rate changes can be implemented.  California was cited as glowing example, in a study released last week by the Consumer Federation of America, which claimed that states which used prior approval for auto insurance rates had premiums rise more slowly over a sixteen year period.

The state ordered rate reduction is expected to save California drivers an average of $124 annually per vehicle.