Bob Graham, Executive Editor

The Consumer Federation of America is at it again, this time setting its sights on a meaty target, indeed: New Yorkers.

In its latest attempt to tarnish the reputation of the insurance industry, the organization is saying that New Yorkers are being overcharged by insurers for their home and auto insurance. In a press release, the group alleges that insurance companies aren’t just overcharging, they are lowering reimbursement rates.

“In the last quarter century, New York has gone from being one of the best to merely mediocre in protecting consumers from unfair insurance rate hikes,” said J. Robert Hunter, director of insurance for CFA. It is unclear if Hunter and the CFA blame New Yorkers, the state insurance department, insurers or all three.

Hunter is an actuary, former state insurance commissioner and former federal insurance administrator, the press release points out. He also seems to be bitter, bitter man. It is as if all those years of earning an income as a result of the actions of the insurance industry were a bad experience for which the industry must pay a couple of times a year in the form of these type of stories.

Somehow, Hunter, the CFA and a host of other organizations who gave their names to the press release have figured out that insurers have overcharged each New York household an average of $870 each since 2004. That figure is “among the worst” in the country, the press release states.

What it should have said is that by finding a way to be critical of New York’s insurance means instant media attention in the country’s largest media market — a market that tends to stretch itself all over the country. If it happens in New York, the media argues, then it really happens to everyone by extension.

Hunter’s act always plays well with the media.

If there were an “Access Hollywood” or “Entertainment Tonight” type show for insurance, Hunter would be the star. If he could, Hunter would spend his half-hour program telling innocent consumers about all the evil things insurance companies do. They earn profits (without mentioning that a free-enterprise system requires that all companies generate profits or else fail), that they set rates designed to ensure they make a profit (what choice do they have) and that consumers are the unfortunate victims of these horrible, horrible acts (doesn’t a free market system mean consumers have choices and can, therefore, select another company’s products or services?).

At a time when all sorts of insurance reform is being weighed – by Congress, the Bush administration and the industry – it is unfortunate that the CFA clouds the issues and shifts public attention away from the real issues with these types of reports.