Rhetoric and reality

Article Abstract:

Proponents of amendments to the McCarran-Ferguson Act appear to have based their opinions on rhetoric rather than on the reality of antitrust laws and the market for insurance. The insurance industry has been subject to federal antitrust laws since 1948. Life and health insurers function under antitrust laws, but property and casualty insurers have attempted to become exempt from these laws. State rating laws discourage competition, and these laws would be easier to amend than the McCarran-Ferguson Act.

Analysis, Antitrust law, Rate regulation

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SAFE-T to the rescue

Article Abstract:

The Solvency and Financial Enforcement Trust, a proposal to ensure the financial solvency of insurance companies, would require each company to fund a custodial account at an unaffiliated institution with liquid assets enough to cover loss reserves and loss adjustments. The account's value would be based on a certification of loss reserves, an annual statement and an audit by a certified public accountant. A detailed discussion of the benefits of the plan is presented.

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The residual market detour

Article Abstract:

Some states require subsidized residual market insurance be given preference over voluntary excess and surplus lines carriers, thereby restricting competition and the buyer's freedom of choice. State insurance departments should strive to decrease the population of these assigned risk pools by raising rates, allowing surplus lines carriers to accept the risks for which they were designed and buyers to receive coverage from a solvent company at a reasonable rate.

Subsidies, Risk (Insurance), Surplus lines (Insurance)

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