Responding to a shocking report on skyrocketing car insurance rates in New York State that appeared in the New York Daily News, Senator Serphin R. Maltese, (Queens) Chairman of the Senate Cities Committee, urged the State Insurance Department to issue an immediate moratorium on any rate hikes for the remainder of 2008.

Senator Maltese said, "With gas prices soaring, the last thing New Yorkers need is a huge insurance rate hike. At a time when working families are having a difficult time making ends meet, we're not going to stand by and let insurance companies gouge New Yorkers.

"People are driving less, putting fewer miles on their cars and getting into fewer accidents, so insurance rates should be going down, not skyrocketing through the roof. I believe we need to send a loud and clear message that insurance companies will not be allowed to burden New York drivers with excessive, unfair and unwarranted rate increases."

Maltese called upon State Insurance Superintendent Eric Dinallo to immediately declare a moratorium on any rate hikes for the duration of 2008. At a minimum, he asked that a moratorium be placed on any hikes that exceed either the rate of inflation, or the national average of rate increases being sought in other states. The Senator also called upon the Department to investigate insurance industry claims that rising medical and repair bills are driving the need for higher rates.

The State Insurance Department has already approved a series of rate increases this year, including one hike that exceeded 7% -- or more than twice the rate of inflation. In addition, there are nearly 50 other companies with new requests for rate hikes pending.

In fact, according to the Daily News report, -- the average increase being sought by these firms is approximately 7% -- far higher than the 2.6% average hike requested by insurers in other states.

Under a new law that is scheduled to take effect in 2009, auto insurers will be able to raise or lower their rates without department approval. Under this proposed law, the Insurance Department will still reserve the right to proactively step in and reject or reverse any increase that is not justified on an actuarial basis.

Senator Maltese said that this law can be revisited and he pledged that it will be revisited and toughened further if insurers fail to act to reduce rates and bring their rate requests down to a sane and responsible level, more in line with those in other states.

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