By Marc Racicot, president, American Insurance Association - 04/15/08 05:05 PM EDT
The subprime lending crisis, rising gas prices, a recession and the collapse of Bear Stearns are, clearly and unavoidably, matters of grave concern to Treasury Secretary Henry Paulson, who has been focused for quite some time on the health of our financial institutions and our economy as a whole. But, what do these emergency circumstances have to do with the business of insurance?
Secretary Paulson released his much-anticipated “Blueprint for a Modernized Financial Regulatory System” last week. As the blueprint recognizes, insurance is interwoven into the fabric of our economy and is a critical interconnected part of the financial services sector whole. By allowing the efficient transfer and spread of risk, insurance enables consumers and businesses to promote ideas that are critical to advance society and to grow the U.S. economy.
The plan also presents a series of recommendations to improve and reform the U.S. financial services regulatory framework. Prominent among them are the establishment of a federal insurance regulatory structure and the creation of an optional federal charter (OFC) for insurers — now the only major financial services industry regulated through a fragmented and non-uniform state-by-state system.
When this antiquated, expensive and cumbersome system inescapably and adversely impacts our ability to participate in and lead the evolution of the global economy the need for a modern, uniform regulatory regime and a world-class insurance regulator is unmistakable. It’s all just a matter of common sense. For those insurance enterprises that choose to do business on a planetary scale, and for this country to attract — not repel — foreign capital, which makes more sense: one federal regulator with robust financial and market conduct oversight, or 56 state and territorial regulators doing 56 times differently what could be done once uniformly?
In addition, it is estimated the national charter option could save consumers billions of dollars, thereby reducing costs and making insurers more competitive. Consumers would have greater product choices, facilitated by a system that actually allowed insurers to bring those products to market, rather than the current bureaucratic structure where systematic state-by-state product review often delays product introduction by months and even years, limiting consumer choices and discouraging product innovation.
There must be a sense of urgency for participating in and leading the evolution of the global economy and for providing better products and more savings to consumers. The secretary’s inclusion of an OFC in his “Blueprint” is recognition of the overpowering logic of the recommendation.
Morris embraces fallacy
From Cynthia Chaffee
(Regarding column “Obama’s weakness is weakness” by Dick Morris, April 9.) Mr. Morris thinks that by repeating derogatory words over and over again that he can influence readers (voters) by unqualified remarks. For example, “weakness is weakness,” “female” vs. “male” values. The so-called “male” virtues actually apply to Obama also. Mr. Morris doesn’t get the idea that a balance of “male” and “female” virtues is healthier than only one approach.
Terms such as “weak,” “weakness,” “lack of sufficient strength,” “flip-flopping,” etc. are used at least 12 times in the column when referring to Obama.
Doesn’t Mr. Morris know that we have heard this kind of unsubstantiated labeling from Republicans so much lately that we recognize its fallacy — and we don’t buy it?
Huntington Station, N.Y.