Insurance Companies May Be Over-Reacting with Unjustified Rate Hikes After September 11th
Marketplace Morning Report
September 6, 2002

CHERYL GLASER, anchor:
Also under the heading of potential cashing in, state insurance regulators are looking into whether insurance companies over-reacted with unjustified rate hikes after the September 11th terrorist attacks. MARKETPLACE's Sam Eaton has that story.

SAM EATON reporting:
Insurance regulators say it's a common practice in the industry--disaster strikes, and insurance companies increase rates, cancel insurance contracts and introduce new coverage limitations to cover their losses. But Americans for Insurance Reform spokeswoman Joanne Doroshow claims this time, insurance companies went too far.

Ms. JOANNE DOROSHOW (Americans for Insurance Reform):
I think there's a lot of evidence that the insurance industry has exploited 9/11 to increase their own profits and--and to really price gouge customers.

EATON:
Beginning next week, the National Association of Insurance Commissioners will examine how much the disaster has affected insurance rates. Doroshow claims insurance companies greatly exaggerated the impact of September 11th and sped up rate hikes as a way to boost profits. She says freezing current premiums would help, but in order to stop the cycle from repeating itself, she says stronger state regulations are needed. In New York, I'm Sam Eaton for MARKETPLACE.