Mississippi Again Weighs Making Insurers Disclose Area Costs

A group of lawmakers and residents from the Mississippi Gulf Coast are again pushing a bill that would require insurance companies to disclose, by geographic area, how much they are charging to insure property.

The idea, which originated in Alabama, is meant to provide evidence to people who are fighting for lower insurance rates. The theory is that coastal residents are being overcharged and that public data will prove it.

Whether rates are fair, though, is still a subject of dispute in places where data’s been published.

“What we want to see is some premium data on some geographic basis so we can compare it to loss data and see if we’re toting a disproportionate share of the risk,” said Charles Busby, R-Pascagoula.

Insurance Commissioner Mike Chaney, a Republican, has agreed to seek such data from companies on a one-time basis. But lawmakers say they want to ensure the data’s gathered over multiple years. Rep. Scott DeLano, R-Biloxi, said it was important to legally mandate a simple and cost-effective data collection.

Chaney said he is against the bill because it would cost money to seek the data every year and because some companies have threatened to stop writing policies if they have to disclose their data. He also said that the data is prone to misinterpretation because some ways of calculating leave out some reasonable costs that insurers face.

The cost to insure homes spiked in coastal areas following 2005’s Hurricane Katrina and has not fallen much since. Members of the Mississippi Affordable Wind Insurance Coalition say the cost of insurance is causing some people not to buy houses and is exhausting the savings of others.

Paulette Mowbray of Pass Christian said that the cost of insurance – more than $5,000 a year for her – threatens her ability to pay for her 1,500-square-foot house.

“We’ve all waited and waited for things to kind of readjust and that never happened,” said Mowbray, a member of the coalition.

DeLano said he has sponsored a bill seeking disclosure for three years. Last year, it came close to passage, but failed after the House and Senate could not agree. He said the concerns that held up the bill mainly came from Chaney.

He said the “clarity bill” would only be a first step toward lowering rates.

“It’s like we’re driving down the highway and we’ve got mud all over the windshield,” DeLano said. “What the clarity bill does is, it helps us clean the windshield off a little bit.”

Lawmakers said they would also like to renew efforts for coastal states to band together in a way that would lower insurance rates cooperatively, possibly by lowering the cost of buying reinsurance.