R Street Institute releases annual insurance regulation report card.
Louisiana earned a “D” grade and 49th nationwide ranking for insurance regulation, according to the 2015 report card released by the R Street Institute.
R Street, a nonprofit dedicated to free market solutions, seeks to answer three fundamental questions with this annual report: 1) How free are consumers to choose the insurance products they want?, 2) How free are insurers to provide the insurance products consumers want? and 3) How effectively are states discharging their duties to monitor insurer solvency, police fraud and consumer abuse and foster competitive, private insurance markets?
Politicization was the key factor leading to Louisiana’s abysmal rating. Insurance commissioners are elected in the Pelican State, which is an automatic 20-point deduction in scoring. “Insurance regulation is a technical matter and, by and large, should be insulated from the political process and prevailing political concerns…the introduction of political pressure to the process of insurance regulation inevitably leads to negative consequences,” the report said.
Louisiana also scored low on other factors, reported The Times-Picayune, including fiscal efficiency and not monitoring the financial strength of insurance companies it regulates frequently enough.
The full report can be found here.