“When the accepted market becomes bureaucratically mind-numbing or the insurance department does not approve anything, risk capital seeks alternative product channels, which may undermine consumer interests.”
regulatory reform questions
Clark points to recent California reforms as a potential turning point. Changes that make it easier to incorporate Frontier catastrophe model output into rate filings, and incorporate reinsurance costs into ratemaking formulas, create conditions in which approved carriers can price more accurately. “Insurance departments approve methodology updates in a timeframe that keeps pace with the science” This is how Clark outlines the need for the approved market to function as it should.
