GA lawmaker asks for investigation to see if major insurance companies are hiding profits
State Sen. Nabilah Islam Parkes sent a letter to Insurance Commissioner John King asking that his 'office undertake a comprehensive investigation into Georgia's insurance market.'
'Working families cannot continue to afford rising premiums, and we need to find out what the real cause of these rising premiums are, and whether or not it's because insurance companies are running a shell game,' Islam Parkes told Channel 2 consumer investigator Justin Gray.
The letter comes after the release this month in the state of Florida of an analysis ordered by the Florida Office of Insurance Regulation back in 2022.
The report examined the relationship between many insurance companies in Florida and affiliate companies they own and use to provide everything from accounting and underwriting to claims investigation.
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Republicans and Democrats last week in a Florida House of Representatives hearing expressed concerns about the findings that indicated that insurance companies in Florida may be using those affiliates to hide profits as they raise rates.
'Our purpose today is to find out if insurance companies have been allegedly ripping us off ripping the citizens of Florida off,' said Florida Republican state Rep. Mike Caruso.
The Florida report found that while the insurance companies they examined claimed losses of $432 million, their affiliate companies made $1.8 billion in income.
'I think we'd be fools to think similar practices aren't happening in the state of Georgia,' Islam Parkes said.
In his response letter, King said his office regulates those agreements between insurance companies and their affiliates and that the 'review of these agreements is performed on a case-by-case basis to determine what is 'fair and reasonable.''
In a statement to Channel 2 Action News, King's office says affiliate agreements in Georgia require prior approval by the Insurance Commissioner before going into effect and require regular review.
The statement also said Georgia's market is different than Florida's, with fewer affiliate companies.
'Florida's insurance market presents unique challenges which are not prevalent in Georgia. Specifically, due to the prevalence of intense natural disasters in the state, many if not most of the larger insurers seek to form a state-specific insurer in Florida. In the Georgia property marketplace, most larger insurers operate under the national corporate structure, with premiums paid directly to the national insurer, rather than through that of a subsidiary and then through to the parent insurer,' an Insurance Commissioner spokesperson wrote.
Rising insurance costs in Georgia are one of the main reasons Gov. Brian Kemp has cited for pushing for tort reform this legislative session.
'As a small business owner for 40 years now, I've seen it in my own escalating insurance costs. Insurers that are pulling out of the marketplace so that people can't have access to insurance even if they have the ability to pay for it. So, we are simply trying to stabilize the market,' Kemp said.
But Islam Parkes counters there should be more data about those insurance companies' fee structures before any laws are changed.
'What are the reasons that auto insurance, homeowners' insurance is going up? We need to make sure that these insurance companies are not taking advantage of Georgians,' Islam Parkes said.
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