Posted on 09/28/2008 12:15:12 PM PDT by kathsua
The financial crisis gripping our nation has many Americans on edge, and it may take some time before relative stability is restored. No crisis would be complete without someone trying to take advantage of it for political gain. Unbelievable as it may seem, the country's largest insurance companies are using the AIG liquidity crisis and subsequent federal bailout as a reason to deregulate insurance and move its regulation from the states to the federal level. It was federal regulation of the financial services side of AIG that failed. The AIG insurance subsidiaries were solvent, profitable and paying claims thanks to careful state regulation of insurer solvency. And it was state regulators and laws that prevented AIG's management from raiding their solvent insurance company subsidiaries to prop up the risky investments in collateralized debt instruments, such as credit-derivative swaps on mortgage-backed securities.
It would be a monumental mistake to transfer regulatory authority of the insurance business over to the federal government. For one thing, look at the track record of federal agencies when it comes to oversight of financial services. The commercial banks, investment firms and international holding companies (like AIG) that are at the center of the nation's financial crisis are all regulated by the federal government. The savings and loan mess of the 1980s, which cost billions to clean up, also occurred on the watch of a similar federal bureaucracy.
In contrast, most elements of the insurance industry are regulated today at the local level by state officials, and those leaders and policymakers do an excellent job. At a time when crisis and turmoil are the norm in the banking and securities sectors, state regulators continue to quietly ensure that insurance companies are solvent, that claims are paid and that consumers are protected. State officials have experience, outnumber their banking and securities counterparts, handle countless inquiries and questions from consumers, and understand the concerns and particular issues facing the citizens of their area. State oversight of insurance may not be perfect, but its record is far superior to that of the financial regulators at the federal level.
The only people calling for federal oversight of the insurance industry are the big insurance players who desire the same level of weak oversight, accountability and consumer protection that has produced this current crisis. To them, I say, "get real."
in health insurance, state regulation seems like an impediment to increasing access and controlling costs?
in health insurance, state regulation seems like an impediment to increasing access and controlling costs?
State regulations are subject to stupid decision from by state legislatures to encourage businesses to take risks et cetera. But since there are anywhere from 50 to 57 states instead of just one, it’s less likely that they can all be dead wrong all at once. For businesses whose operations span more than one state, businesses can adjust to some of the worst state government policies if they have the final option of voting with their feet, and consumers can as well if needed with less risk. So it does sound like a better idea to me.
I don’t think there is any government entity that can control the cost of anything (either government “goods and services” or private goods and services) without adversely affecting the supply of it.
I thought it referred to the individal being allowed to buy a health plan from another state that may not be licensed in his own; I think it’s going to mean some states load up plans with mandates like Christmas tree ornaments, like prescription drug coverage, etc., etc, while other states don’t have those requirements, so if you don’t want them (how many people do, with $4/ month generics at most pharmacies)you don’t have to have to pay for them. That’s increasing access but not socialistic to me.
confusing title
confusing title
I misunderstood you, and I agree with you.
It would certainly increase access if states allowed consumers to buy insurance without coverage for hair plugs, chiropractors, accupuncture, etc.
But probably national coverage would have even more Xmas ornaments.
jas3
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