They say the more things change, the more they remain the same. That certainly holds true for insurance. Looking over bound volumes of NU from 1985 (for a good laugh, note my column sketch from back then), seeking background for my column on our former managing editor, Tom Maher, I read our coverage of regulation, tort reform and health care costs in stories that could be reprinted today, with few noticing they were actually 23 years old!
For example, in a report from the Monte Carlo Rendezvous of 1985, our former assistant managing editor, David M. Katz (now a multi-award winning deputy editor at cfo.com), wrote the following in a story headlined: "Greenberg Attacks State Regulation."
"The current state system contains too many consumer advocates who are too little concerned with insurer solvency," according to Hank, then president and CEO of AIG.
"I'm not sure that the system of state regulation is capable of dealing with the complexities of our business today," he said, raising the possibility of an optional federal charter way back then.
"There is something to be said for having a choice of the regulatory system you want," Hank said. "State regulation that deals with consumer issues and does nothing about solvency is not helping anybody."
He added that banking, with players free to choose either a state or federal charter, is "a better system."
Mr. Greenberg roasted another old chestnut in that story--the need for tort reform.
"It's been very disappointing that business hasn't done much about the tort system," he said back in 1985. "The Business Round Table has not taken a strong stand on tort reform, and it must."
He added that "just going around and bitching about [the tort system] is not going to bring about change."
Hank called for the formation of a national task force to scrutinize the nation's tort system.
Meanwhile, David Katz, in his "Risk Management Beat" column, headlined "Getting A Leg Up On Medical Costs," wrote that "medical inflation has become such a big issue that it has crowded out just about every other concern on an employee benefits or risk manager's mind."
He noted that "the adjective 'skyrocketing' appears to have attached itself permanently to the phrase 'health care costs.' Corporations have become obsessed with the huge chunk that hospital costs were taking out of their budgets. Doomsday, or at least national health care, is surely at hand." He warned of a "titanic battle ahead" to contain medical care costs. (P.S. We are still fighting, and losing, that battle!)
Shifting back to regulatory battle, our former editor, John Cosgrove, penned a column in his retirement, headlined: "Federal Regulation Revisited: Time To Ask The Feds To Step In?" Writing in the midst of a hardening commercial insurance market, John opined that "perhaps no invitations are needed" for Uncle Sam to take over, due to the "widespread perception of the property-casualty industry, which offers alternating feasts and famines of coverage, the first featuring bargain prices and the second unaffordable charges."
Sound familiar?
John went on to say that calls for federal regulation were either "sinister or salutary, depending on the listener's viewpoint."
Meanwhile, he noted that the National Association of Insurance Commissioners was promising to do better in coordinating their oversight of the industry. Indeed, John Cosgrove reported back in 1985, "the NAIC, with an obvious stake in fending off federal intrusion, says it intends to upgrade its monitoring procedures and to get tougher in performance."
Haven't we heard that before? And many times since???
It's amazing how little has really changed in the industry when you get right down to the fundamental issues, isn't it???
Comments (3)
It is amazing how the same things that have never been dealt with continue to be a problem.
The OFC--notice the first word is "optional"--could be a good thing for some companies. The banking industry has state, national and federal-chartered banks, and it seems to work just fine. But the insurance commisioners are going to fight tooth and nail not to lose any power.
There is not even consistency on how they get the job--with some elcted and some appointed--which mean some may not be qualified.
Imagine if someone would have done some constructive work on the cost of healthcare back then, how much it would have saved this country now.
SAM RESPONDS:
There was some attempt to slow down growth in healthcare costs, via managed care, PPOs, pharmacy benefit management programs, etc., but they haven't seemed to have done the trick. The big question is, what will? Perhaps that will be a good blog topic!
Posted by Dave | February 22, 2008 11:44 AM
Posted on February 22, 2008 11:44
I've been working in the insurance industry, as a company man, for nearly 40 years now. Frankly, the only thing that has changed is that we now have computers on our desks, and so work goes faster.
But what we do, and the relationships among all the "players" in the industry, haven't changed a whit.
Posted by Mikk | February 22, 2008 12:28 PM
Posted on February 22, 2008 12:28
Being in this business for over 30 years, the main thing I have seen is the greater influx of the bean counter in upper management and the loss of knowledgeable leaders at the top.
As has been shown over the past few years, companies no longer base decisions on what is good for the customer and the company. Now it seems most decisions are based on what is good for the company, leaving out the customer. Note Katrina, Rita, Oklahoma tornadoes... to name a few.
I agree that the companies will fight to the death about federal regulation, and that many state insurance department offices are run by unqualified office holders who only want to use it as a step to move up to a higher office.
Computers on the desk now adds more work to the staff, as support staff has been deleted. As a result, ovetime lawsuits have popped up and many companies have lost in certain states and paid big.
Maybe we need to go back to the future. Get back the real insurance people into the top slots, staff underwriting and claims properly, support and train agents. Maybe even stop this crazy thing of trying to grab market share by slashing pricing and then crying when things blow up.
One last thing.
As I got older, the hair went by the wayside, the body started to rebel and the face will scare little children, and the feds will not post it in the Post Office as they are scared it will chase off patrons. Am I jealous of your 80s look and how you look today.
Posted by J R | February 22, 2008 3:56 PM
Posted on February 22, 2008 15:56