Coming to Sense
Misconceptions abound in Congress about the role and reputation of the insurance industry.
Independent Insurance Agents & Brokers of America (IIABA) President Alex Soto couldn't be more on the mark when he told a group of Maine agents that the insurance industry's reputation has never been more tarnished with Congress.
A couple of weeks ago, the Insurance Information Institute (III) updated its Firm Foundation report, outlining the ways in which the insurance industry contributes to the economy and provides a valuable service. I remember thinking that amid all the numbers and statistics were some fairly salient points that should be brought to the attention of policymakers.
Still, according to Soto, a Miami insurance agent, with one congressman, insurance professionals have little more credibility than the vilest criminals. I actually hope he's wrong on that point, because that would suggest there's at least one total raging moron in Congress and I never like to think the country's being guided in part by actual idiots. It's unsettling.
Inarguably, however, Congress and individual states seem far more likely to want to rein in the insurance industry than give it any more leeway to regulate itself.
Take Sen. Trent Lott (R-Miss.), for instance, who every week comes up with some option for punishing State Farm for denying his Hurricane Katrina claim. First, he harped on the antitrust exemption for insurers – a repeal of which would do absolutely nothing to hit State Farm, since it has a wide enough base of customers and data to function without sharing information among the industry.
Recently, Lott filed a bill that would require all insurers to include a "plain language" box that clearly defines what is covered by the policy. He complained that insurance policies are notoriously difficult to wade and therefore, he wants them to outline exclusions.
Hey, Trent, you know what else is complicated and seemingly unnecessarily wordy? Legislation. But lawmakers manage, don't they? (The PATRIOT Act notwithstanding, since it seems not even the FBI can figure what is and what is not allowed under that). But on insurance, give the public – and certainly their agents -- a little credit for knowing what is and what is not covered under their property policies. It also bears noting that most states have already thought of this provision and require insurers to clarify coverage for laypersons.
It's ironic, then, that at a time when so many federal lawmakers seem intent upon limiting the industry's freedom that anyone would worry about the idea of an optional federal charter. 50 or so eyes are better than one blurry one – and Congress will undoubtedly realize that.