Policy Documents

Analysis of the Consumer Federation of America Report: “Why Not the Best?”

David Appel –
December 1, 2001

In a recent paper entitled "Why Not the Best?" the Consumer Federation of American (CFA) claims to have “researched the results of regulation over the last decade in the 50 states” and concluded that “One state stands out as having the ‘best practices’ in the nation; California, under the remarkably effective provisions of Proposition 103.” This conclusion seems to be based on a qualitative appraisal of the Proposition 103 regulatory model relative to the CFA’s own "standards for excellence" in insurance regulation, as well as an alleged “objective analysis” of the results of insurance regulation across the nation. The National Association of Independent Insurers (NAII), National Association of Mutual Insurance Companies (NAMIC), Alliance of American Insurers, and American Insurance Association (AIA) have asked Milliman USA to review and analyze the CFA’s claims, and, to the extent we differ with the CFA conclusions, to provide an alternative analysis of the California experience.