ALBANY, N.Y., November 29 – Auto insurance companies are profiting at unprecedented levels from New York drivers who are spending more on insurance premiums while the industry pays out less in claims, according to a new report by New York City Comptroller William C. Thompson, Jr.

In a letter, Thompson called on Governor-elect Eliot Spitzer to address the impact of unjustifiably high rates on New Yorkers. These onerous rates " and the notable absence of a justifiable reason for them " are simply unconscionable, he wrote.

Thompsons report, Highway Robbery: The High Cost of Automobile Insurance in New York, reveals that premiums in New York have ballooned even as insurance companies claims payouts have dropped.

The auto insurance industry needs to put the brakes on these increases and take immediate steps to reduce premiums by at least $1.5 billion, said Thompson.

Auto insurers reported $10.5 billion in earned premiums in New York in 2005, a jump of nearly 29 percent from $8.2 billion in 2000. Meanwhile, during the same period, incurred losses plummeted by more than 20 percent, from $6.4 billion to $5.1 billion, according to the report.

In contrast, premiums increased 33.8 percent nationally, moderately faster than New York, yet losses increased 12.9 percent nationally, Thompson noted.

An insurers profitability is based on its premiums, losses, expenses, and investment income, Thompson said. In the last three years, the automobile insurance industry has become very profitable in New York, largely because premiums continued to climb even as losses moderated and declined. The result has been declining loss ratios and historically very high profitability.

Thompson made the following recommendations to Spitzer:

Auto insurers should lower their overall New York premiums by at least 15 percent, or about $1.5 billion per year. Insurers did modestly lower rates after 2004, but the total savings is only about $500 million a year;

Municipalities should be allowed to petition the Insurance Department for rate reductions;

To help consumers shop for lower cost auto insurance, the Insurance Departments annual consumer guide should provide a comprehensive list of pricing information. Similarly, insurers should be required to publish their loss ratios according to a uniformly defined rating territory, thereby providing New York drivers with a means to track comparative costs;

New York State should create an Office of the Insurance Consumer Advocate within the Department of Insurance. This office would represent insurance consumer interests at the Insurance Department.

For too long, auto insurance companies have been price-gouging New Yorkers, Thompson said. Rising premiums are becoming cost prohibitive, and squeezing New Yorkers even more as they struggle to pay their rent, food, gas, and other necessities. A reduction in premiums is the right direction, so that drivers can afford to stay on the road.

The consumer group, Center for Justice & Democracy, joined in Thompsons criticism of the industry, with the groups communications director, Laurie Beacham, stating, Once again, across the board, the insurance industry is raking in record profits on the backs of its policyholders. While insurers celebrate, consumers continue to suffer with oppressive premiums. Theres something wrong with this picture.

Beacham said that CJ&D supports Thompsons recommendations, including the establishment an Office of Insurance Consumer Advocate within the Insurance Department to represent policyholders on insurance rate issues.