Insurance Companies Significantly Overstating Their Losses

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A recently published study by The Foundation for Taxpayer and Consumer Rights demonstrates that insurance companies have been significantly overstating their losses and then revising them downward in later years.

The study showed that the insurance companies reported "incurred losses," what they expected to have to pay out on claims, averaged 46% larger that what they actually paid out. The study concludes that the insurance industry is in need of regulatory and accounting reform and calls for a moratorium on rate increases and legislative limits of damages (called "tort reform") until the public can be sure decisions are being made on reliable data. The report also calls for regulatory and law enforcement investigation to determine if there has been a deliberate effort to mislead the public and lawmakers.