Tuesday, 13 March 2007

Missouri Businesses Get $2.5 Million Insurance Refund

For 3 years, the National Council on Compensation Insurance (NCCI) miscalculated their expected losses — resulting in inflated premiums for many Missouri businesses’ workers compensation policies.

The error occurred due to the omission of historical payroll information in 2003, 2004, and 2005. Insurance companies use the payroll information to set premiums.

The Missouri Department of Insurance, Financial Institutions and Professional Registration was paid roughly $2.5 million to refund overcharged businesses throughout the state.

Approximately 51,000 workers compensation policies were reviewed by the Department of Insurance in 2006 find who was affected by the error. Of the 51,000, around 21,000 businesses received refunds. The average refund was $121 and the largest refund was $107,259, as reported by the Associated Press.

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Posted by Insurance Quote at 6:28 PM in Group Insurance

Michigan Looking To Reduce Urban Insurance Rates

Insurance rates in urban areas of Michigan — particularly in the Detroit city limits — are much higher than in the surrounding suburbs. Lawmakers recently met and discussed solutions to reduce rates for city residents.

One tentative proposal was to eliminate the use of zip codes when setting insurance premiums.

Michigan insurers have a long-standing practice of charging rates based on where people live. Many Detroit residents are paying significantly higher rates than people living just blocks away in suburban zip codes.

But the executive director for the Insurance Institute of Michigan, Peter Kuhnmuench, points out there is a greater risk of their car being stolen or their home being burglarized in urban areas. Insurance companies charge higher rates in city limits because of the higher risk.

It also may be difficult to get insurance companies to reduce rates because of Michigan’s unlimited medical benefits. Michigan is the only state in the U.S. with no cap on the amount of medical benefits a person can receive if seriously injured in an auto accident — another factor that drives premiums up.

“A cap of $500,000 might be a compromise,” said State Rep. Virgil Smith, who is the chairman of the House Insurance Committee.

“Governor Jennifer Granholm and Linda Watters, commissioner in the state Office of Financial and Insurance Services, are seeking other ways to reduce insurance costs,” said state spokesman, Ken Ross.

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Posted by Insurance Quote at 10:54 AM in Insurance