Consumer advocates are calling on state regulators to stop insurers and third-party organizations from using a revised computer catastrophe modeling scheme, which they charge leads to unjustified home policy increases for consumers.
In a letter to insurance commissioners, representatives of the Washington-based Consumer Federation of America and the Center for Economic Justice in Austin, Texas, cited recent actions by risk modeler Risk Management Solutions, Newark, Calif., that they contend will lead to unjust enrichment of insurers.
On March 23, RMS announced that it was altering its procedures for estimating the future risk of hurricane damage in a manner that could lead to a 50 percent increase in losses along America's coastline from Maine to Texas.
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