R-67: Postman on the Milliman Study

Wednesday afternoon, David Postman at his blog took a look at the credibility of the report by actuarial consulting firm Milliman that is used by the Reject 67 campaign to contend that enactment of the law could result in an increase in the average consumer's insurance rates of up to $205 per household in Washington, or $650 million in the aggregate, each year.

Postman points out that Milliman is also involved in the Insurance Commissioner's efforts to pencil out a universal health care plan.  So, he ponders, if Kreidler is aligned with the pro 67 campaign saying insurance rates will not increase, but Milliman says rates will increase, where is the credibility, and does criticism of Milliman's impartiality over its R-67 projections call into question its impartiality in any of its projects, including Kreidler's universal health care plan? 

Good question.  He also posts a response from the pro campaign's spokeswoman, who predictably objects that the Milliman report was commissioned by the Reject 67 group, and that national "consumer groups" don't think Milliman is an independent source.

Well, now.  Of course the report was commissioned by the campaign.  And if its findings came out otherwise, no one would have ever heard about it.  Not much different from a candidate's campaign commissioning a poll, and then releasing its results when it finds out the results confirmed the candidate's lead.  Why would anyone else spend the money to obtain a consulting report to test the hypothesis the campaign hopes to establish?  And then reference the report when it turns out to confirm it?

And of course Milliman works with the insurance industry.  It's an consulting firm made up of actuaries.  They provide independent reviews of ratemaking and reserving decisions that insurers make.  I know from sitting on the Labor & Industries Workers' Compensation Advisory Committee that L&I has for years used Milliman to obtain outside actuarial advice on its $12 billion industrial insurance fund. 

Milliman, based in Seattle (not Wisconsin, has some reports have suggested), is one of the largest property & casualty actuarial consulting services in the world.  I have a hard time believing it would stake its professional reputation and credibility on cooking up a dummy report to parrot the preferred positions of a political campaign on a statewide issue in an election year.

To dispute the report's conclusion, critique the merits or reasonableness of the methodology and data.  Hire another actuarial firm to review the reasonableness of the approach.  The other stuff -- red herrings.

Comments

[William]

It may have been mentioned already but, lawyers can't file a law suit without a client. So called frivolous law suits have no chance of making it to court, it is hard enough to get a legitimate claim into the courts, I know from experience.
After calling the claims adjuster many times, after months of being asked for the same information over and over, (a delay tactic). After months of no answers, I filed for binding arbitration, which was scheduled a year out. The Insurance Company did all they could do to delay it (and they did for almost another year). They made an offer the day before the arbitration hearing with a low ball offer. I declined and went forward to find in hindsight that binding arbitration is controlled by arbitrators that are used by the Insurance Companies regularly if not exclusively. The Insurance Company used a doctor as an expert witness that had 5 malpractice suits in the past. The doctor accused me of drug abuse, alcohol abuse, Etc., which was false and had nothing to do with their liability, even if it were true. One of the Insurance Company lawyers’ was caught sleeping during the hearing. The Arbitrator and the Insurance Company lawyers’ were obviously chummy, very appalling. The verdict, as you may have guessed, was not close to fair, it did not cover the cervical fusion that I was scheduled to have, due to the accident. I filed a bad faith claim against the Insurance Company 4 years ago. They have done everything to postpone it, withhold evidence, failed to respond and blatantly told us that we would have to work for a settlement. Still scheduled for Feb 2008, I have incurred over $8000.00 (my choice to assist my attorney who has a private practice and is a long time acquaintance) in costs for expert witnesses, depositions, etc.
I am still out of work and in chronic pain. If I had not had good credit to borrow money on my property I would have gone bankrupt.
With the laws the way they are now, the Insurance Company will only have to pay $10,000 for consumer protection violations, my attorney fees and costs. If I was of weak character, I would have given up a long time ago. I will never be compensated totally for my damages (due to the current laws and emotional trauma that I have endured so far).
It is very important for policy holders to see that R-67 passes, so that their attorneys can get them what they deserve or get a settlement without needing an attorney. Clients typically receive 2/3 of the award and attorneys 1/3. R-67 is a tool for policy holders to be able to make the Insurance Companies accountable for their actions. If Insurance Companies investigate and settle promptly (no fear), if they don't they may be sued for their misconduct. FYI as it is now in Washington State, we are not even getting our moneys worth from the Insurance Companies in most cases. I would prefer (if it were true) to pay higher premiums and get my claim settled promptly.
State law requires that companies submit request for rate changes to Insurance Commissioner’s office along with enough statistical and financial information to justify the rates requested. If the Insurance Commissioner’s rate analysts are satisfied with the facts provided, the law requires Insurance Commissioner’s office to approve the request. If the Insurance Commissioner’s ignored evidence that a rate was too low, they would be violating the law. The Office of the Insurance Commissioner is obligated to make sure there is enough premium collected to pay possible claims.
This shows that Insurance Companies can not raise rates without the Insurance Commissioner’s review. So all the talk of Rates going up just because R-67 passes, is a untruth. Since the Insurance Companies have plenty of money they will not be able to justify with the Insurance Commissioner a rate increase due to R-67 passing. There are Insurance Companies that treat their policy holders relatively fair and have few bad faith claims filed. Their liability would be low and therefore no justified rate could be increased. It is ridiculous to think rates will go up because Insurance Companies are paying their claims fairly.
Remember, Triple Damage Awards are not guaranteed; they would only be awarded by judges or juries in the most severe circumstances. If the Insurance Companies are guilty, I believe it will not make it to trial. Under the current laws, it is only a consumer protection violation, which does not compensate the policy holder for all damages caused by the Insurance Company’s behavior, in delaying or denying claims. An insurance policy is a contract, when a contract is breeched it should be dealt with severely. The Fact is, many people have been severely hurt by the conduct of Insurance Companies, for the sake of the all mighty dollar.
R-67 will be of no help to my case, because R-67 is not retroactive that far back. I just don’t want what happened to me to happen to anyone else.
I summons all of you to look at your home and auto policy, read it carefully (written by Insurance Lawyers). Also, look at who the no campaign contributors are, find one that did not contribute and get a policy with them. I Did!
Vote YES R-67.