State insurance department reviews net $41M

HARRISBURG – Pennsylvania Acting Insurance Commissioner Michael Humphreys last week announced that in the first quarter of 2023, the Pennsylvania Insurance Department (PID) has already saved consumers more than $41 million in annual property and casualty (P&C) insurance premiums through its review of insurance company rate filings.

PID regulates insurance products to ensure that rates are not excessive, inadequate or unfairly discriminatory. Insurance companies must file their proposed rate changes for review by PID actuarial staff before the rate changes take effect. PID then either approves, approves with adjustments or disapproves the proposed rate changes. The vast majority of these savings, or $34.2 million, have been in personal auto insurance premiums.

"Gov. (Josh) Shapiro and I will always come down on the side of consumers. In our analysis of rate filings, we are committed to providing Pennsylvanians with affordable options when it comes to insurance coverage on their cars, homes and properties," Humphreys said. "We also always encourage consumers to shop around and find the coverage that best meets their needs for the best price."

Since the pandemic, PID actuarial staff have been closely analyzing and challenging future assumptions, requiring recent claims experience with each rate filing. Auto insurance rates have seen increases across the country, driven largely by inflation; the cost of replacement cars, parts and labor for car repairs has increased dramatically.

PID continues to work to keep premiums as low as possible through its stringent analysis of rate filings, recognizing the cost drivers that justify rate increases. Rates may be increasing overall, but premiums are still being kept considerably lower than they would have been without the department's review.

"PID actuarial staff carefully review each rate filing, and the assumptions and procedures insurers use to justify their proposed rate change," said Humphreys. "Insurers use different types of data or methodologies to rationalize their rates, but when considering multiple factors such as insurer's experience, competitive experience, external trends, indications, and loss experience, PID challenges their assumptions and often gets the rates reduced below what the insurers had intended to charge. Most insurers cooperate with us when we disagree with their assumptions, but if we need to reject a rate increase request, we absolutely do."

Consumers who have a question about their insurance or need to file a complaint may contact the Insurance Department's Bureau of Consumer Services at 1-877-881-6388 or online.