Insurers Worry of Going Out of Business


While Democrat lawmakers in the House of Representative continue to lobby legislative amendments to lower insurance costs for customers, insurance providers continue to be alarmed that any further action to lessen premium prices can lead them to bankruptcy and move their businesses somewhere else. Providers attacked state Democrats by comparing Michigan’s activities to those of other states when it comes to how state officials interact with the auto insurance business.

Insurers Worry of Going Out of BusinessThe contrast in the actions of the states regarding auto insurance became very evident as the development department in Ohio sent out invites to private groups for the launch of the state’s new strategic business plans that will boost growth for its local financial institutions and insurance companies. Meanwhile, Michigan’s Democratic lawmakers continue to push legislation that will increase government intrusion in the insurance industry. Reports say that last year, Michigan lawmakers sponsored a bill that will create new reasons for drivers to file lawsuits and new policies as to fines and penalties to settle disputes resulting claim payments. This said bill was accused of opening the floodgates to legal actions against insurance companies.  Reports said that Gov. Jennifer Granholm, who is known to support the disciplinary proposals, does not seem to be bothered of the unforeseen damages that private agencies will soon suffer.

On the other hand, Iowa has long been known to appreciate the importance of insurance companies. Insurers in Michigan site Iowa capital city Des Moines as an example of a healthy economic engine where drivers and insurers work hand in hand to achieve growth and development.

According to a spokesperson from one of Michigan’s biggest insurance companies, claims that insurers are making huge profits is not at all true and even industry officials present testimonies and documents  to the contrary. He blames consumer advocate, Melvin Hollowell, who got a go signal from Granholm to lead a charge against insurers and the one who claims that Michigan insurers are generating extensive amounts of income.

Representatives of major auto policy companies say that Michigan Democratic legislators are making a move to drive home and auto insurance providers out of business. A spokesperson for one agency said that legislation is “okay” for big companies who operate branches in other states, since their income from other locations can offset losses they will incur in Michigan; but for small players, they will be forced to close their doors and rethink their business prospective. Major companies in the insurance industry in Michigan have cited Iowa, Ohio, and Indiana as states that take good care of insurers and even court them when necessary.