How to collect billions of $$ in revenue yet claim losses

[redrumloa]

Just operate an insurance company in Florida!

http://www.sun-sentinel.com/business/fl ... 1654.story

"Now we know how insurance companies with the highest rates in the country, expecting hurricanes, can [appear to] make no money even when hurricanes do not strike," said Chip Merlin, a Tampa attorney who represents policyholders and was on a state task force last year to examine how to shrink Citizens. "We would have been better off just keeping those policies in Citizens if this is how the private market operates."

State-appointed Insurance Consumer Advocate Sean Shaw plans to release a report on MGA fees. Part of his analysis found that Florida policyholders pay 50 percent more for overhead costs than the national average. They pay $434 per policy for operating expenses while the national average is $289. "Consumers don't know exactly what the benefits are of these MGA agreements and if it's true that these MGAs are a way for profits to be siphoned out," he said.

The problem is for all too long the regulators were in the insurance industries back pocket. Before Hurricane Andrew in 1992, there were no major storms for 25+ years. All free profit for the insurance companies, rates went up. Between 1993-2003 there were no major storms. All free profit for the insurance companies, rates went up. We all know that 2004 and 2005 were extremely active seasons, even though there was nothing with Andrew-like damage (in Florida). These companies who had decades of free profit claimed it was impossible to stay in Florida, regulators let them jack up rates 60%-1,000%(+++) almost over night. Despite Gov Charlie Christ's (R) campaign promise that he would take on the insurance industry, rates went UP on his watch.

With rates at the among the highest in the nation and no major storms from 2006-present, these insurance companies are claiming a loss by playing a shell game. How else do you explain a couple dozen companies raking in countless billions for 4 years, paying out nearly zero and yet reporting losses? Nice racket they have going here :x