While Virginia ranked in the top 10 nationally on a new report regarding insurance regulations in the property-casualty industry, officials said it is just one of many analyses looking at how states operate.

Virginia received a letter grade of “B+,” according to the study compiled by the Competitive Enterprise Institute and Heartland Institute.

Both groups bill themselves as non-profit, public policy groups dedicated to free enterprise and limited government, and make no attempt to hide their thoughts on state-based insurance regulation in the report.

“America’s state-level insurance bureaucracies make it difficult – sometimes impossible – for insurers to offer consumers the products they need, want and deserve,” states the report. “No state does a perfect job of regulating insurance, but some do better than others.”

Better than last year

The letter grade and numerical score of 13 for Virginia was higher than the “B” grade and -3 score the state received in 2008.

Ken Schrad, a spokesman for the State Corporation Commission, which oversees the Virginia Bureau of Insurance, said there are a “number of such analyses conducted by various organizations that apply differing criteria.”

“The Bureau’s sole criteria is to apply Virginia insurance laws and regulations to ensure that citizens of the commonwealth are provided with access to adequate and reliable insurance protection; that the insurance companies selling policies are financially sound to support payment of claims; that the agents selling company policies are qualified and conduct their business lawfully; and that the insurance policies are of high quality, are understandable and are fairly priced,” Schrad told IFAwebnews.com.

‘A’s rare in report

The policy groups only gave out four “A”s, to Arizona, Idaho, Utah, and Vermont and said Maryland, Louisiana, Florida and Massachusetts earned “F”s, the lowest score.

Virginia finished 8th in the nation with its score of 13, tying for that spot with Wyoming.  New Hampshire, Ohio and Illinois all finished between those receiving an “A” and Virginia.

The grades are based on several variables, including political oversight, regulatory environment, and concentration of auto and home insurance market, weighed “on their importance to preserving a free and competitive marketplace,” the report states.

“On the whole, freedom to buy and sell insurance exists in only a few places in the United States,” the report claims. “Most Americans cannot buy the insurance products they want and most states make it impossible for insurers to sell them.”

Virginia’s letter grade improvement came largely by scores of 5 in the categories of regulatory environment and territorial restrictions, where it got scores of 0 last year.

This story originally appeared in the August 2009 print edition of Insurance & Financial Advisor.