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National plan to review home insurers hits roadblock

A sweeping effort by state regulators to uncover why homeowners insurance is so expensive and difficult for customers to obtain is already running into trouble, as some crucial states say they may opt out of the call for data.

The National Association of Insurance Commissioners, an umbrella group representing state insurance regulators, said March 8 that state agencies are ask insurers for detailed data on how they treated their customers, including information on the types of coverage they offer in different zip codes, recent claims payment history in those areas, the amount of deductibles for customers insurance and their opportunities for reductions by fixing or modernizing certain parts of their house. At the time, a senior NAIC official said the goal was to “address the critical challenge of the affordability and availability of homeowners insurance and the financial health of insurance companies.”

The group said the data requests would reach more than 400 insurance companies and offer insight into about 80 percent of all homeowners' plans in the United States, measured by total insurance premiums. Some data would be shared with the Treasury Department to help it identify where homeowners face the highest risks and costs of living. State and federal officials called the effort a watershed moment for the insurance industry. It is the largest and broadest request for information that insurance companies have faced from a regulator in decades. Such granular data has never been collected at the national level.

But each state regulator can decide whether to participate in the data call, and some of the states where homeowners face the greatest risks of damage from severe storms and where insurance markets are the most turbulent – ​​like Louisiana, Texas and Florida, where Republican politicians regularly balk. to policies addressing climate change – can either share limited data or opt out of the program altogether.

Regulators say that even without full participation, the program still represents a huge step forward in their quest to understand what's going on with home insurance. But states' reluctance to participate could leave a significant hole in the picture that regulators are trying to piece together in homeowners insurance markets across the country. That could thwart their efforts to decide exactly how to resolve the tangle of problems, caused by inflation and increasingly severe weather brought on by climate change, that have pushed some big insurers to leave the states like Florida and California. In these places, and others hit hard by catastrophic events like windstorms and wildfires, some homeowners unable to afford the rising costs of insurance have had to reduces their coverage.

“It makes no sense to leave out the 20 percent of the country that faces significant climate risk and the resulting impacts on consumers, or to leave out the types of insurance impacting consumers the most vulnerable,” said Birny Birnbaum, an insurance expert and executive director of the Center for Economic Justice, a nonprofit focused on equal access to economic opportunity.

At a meeting of the Federal Insurance Advisory Committee on Wednesday, attended by Treasury officials, representatives of the insurance industry and state regulators, Mr. Birnbaum told attendees that he was concerned that until 10 states refuse to share their data.

Steven E. Seitz, director of the Treasury's Federal Insurance Bureau, declined to name or discuss states that were not participating, but said at the meeting that the data call was “a very positive first step toward data coverage”.

But Louisiana, Texas and Florida have already expressed reluctance to participate in this effort, with Louisiana withdrawing altogether.

John Ford, a spokesman for Louisiana's insurance regulator, said its commissioner, Timothy J. Temple, decided not to require companies operating in the state to share their data. Mr. Temple and his team “are focused this year on regulatory and legislative efforts that will attract insurers to our state and stabilize the market,” Mr. Ford said.

Ben Gonzalez, a spokesman for the Texas Department of Insurance, said, “Texas has no plans to collect any new information” because it already collects data from insurers that is “generally sensitive” to what the state was asking for. coordination group.

Florida is considering what information to share, according to a spokeswoman. A bill passed by the Florida Legislature this year would require the state's insurers to report zip code-level information on claims. But they wouldn't have to disclose the same type of details about the policies they offered to their customers, such as the amount of their deductibles, that the National Association of Insurance Commissioners' data appeal asks for.

Some information from states that have opted out of the data call entirely may still reach the coordinating group. That's because regulators in participating states, like Pennsylvania, require national brands that operate in their states, like State Farm and Nationwide, to share details about their proprietary plans wherever they are sold.

An NAIC spokeswoman said the group does not intend to release a list of participating states.

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