P. M. BRIEFING : Firm Halts Advisory Insurance Rates

The insurance industry’s biggest rate-making organization, facing demands from consumer groups and Congress, announced today that it will no longer provide advisory rates to its 1,400 participating companies.

Fred R. Marcon, president of Insurance Services Office Inc., said that instead of rates, ISO will provide insurers with estimates of future loss payments, on which they can then calculate their own rates.

Robert Hunter, head of the National Insurance Consumers Organization, said the change is insufficient to satisfy his organization’s complaints about the rate-making procedure.

“I don’t think this is a solution,” Hunter said. “It’s an admission, but not a solution.”

Marcon, on the other hand, said his organization was not conceding that it engaged in price-fixing.

“While ISO continues to believe that our providing advisory rates fosters competition and lowers insurers’ prices, others have expressed doubts,” he said. “Individual insurance regulators, state and federal legislators and some consumer groups have expressed differing perceptions of our rate-making process.”