Bill would let regulator claw back insurers’ excess auto profits after repeated over-performance
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Summary
HB1274 would require insurers to disclose expected profit in rate filings and permit recovery of excess profits if companies exceed that expected profit in three consecutive years; proponents cited Florida’s experience, including a recent $1 billion refund in one case.
Representative Jim Reeves presented House Bill 12-74 to the House Insurance Committee as an "auto insurance excess profits" measure developed from the Blue Ribbon Insurance Rate Study Committee. Reeves said the bill would require transparency in insurer rate filings about expected profit and provide a mechanism to require companies to remit excess profits to customers if they exceed their stated expectations for three consecutive years.
"This is the way to do it," Reeves said, arguing the provision would ensure excess profits are passed to customers when companies understate expected profits in filings. Reeves cited a model used in Florida and told the committee that in one Florida case an insurer’s excess-profit review produced approximately $1,000,000,000 in refunds. He said those funds translated to an average of about $300 per affected policyholder in that instance.
Bryce Ross, director of legislative affairs for the Georgia Insurance Commissioner's Office, told the committee this would be new legislation for Georgia; currently there is no look-back on insurer profit filings. Committee members asked whether Georgia has a historical recoupment figure; presenters said comparable Georgia data were not available because the state lacks a comparable statutory mechanism.
Reeves and witnesses framed the change as a consumer-protection and market-stability measure that would encourage accurate rate filings and help sustain recent rate decreases in Georgia. The committee took the bill as a hearing only; no vote was taken.