A "third rail," for those unfamiliar with subways or rapid transit—or even a Lionel toy train set—is the power source for the train. The current that runs through one is so charged that one touch is fatal.
Readers over 55 may recall the old radio sitcom, Fibber McGee and Molly. Fibber had a closet, and whenever he'd go near it, Molly, in her old Irish (or maybe it was Boston?) accent, would shout, "Don't open that closet, McGee!" He would, of course, and all the junk would come clattering out.
One of the things that fell from the closet was a 10-foot pole. "What's that for?" Molly would ask. "Why, that's the 10-foot pole I use to not touch certain projects around the house," Fibber would say. When the show ended its run, not making the transfer to 1950s television, the sponsors auctioned off all the stuff from Fibber McGee's closet. I bid on that 10-foot pole, so that I'd have something to use so as not to touch any dangerous third rails.
There are a number of potentially fatal third-rail subjects that columnists for business publications such as this should never touch, even with a 10-foot pole. One of those untouchable subjects is politics, as past Iconoclast columns have been duly scolded by readers who have disagreed with suggested political positions. Another is sex, and a third is religion, yet here I sit at my keyboard. I'm stretching out Fibber's 10-foot pole toward a forbidden topic or two, so get ready to e-mail the editor with your complaints!
Up First: Congress and Insurance
If health insurance or AIG's credit default swaps were the only kinds of insurance, then it would be a sad time for our industry. Insurance company executives would be called to the carpet in front of some Congressional committee daily to explain why their premiums are so high, or their profits in the billions, or why they took risks that bankrupted the company.
Thankfully, that's not yet the case, so Congress seems to have put the P&C industry on the back burner for a while. However, the move to take back regulation from the states is still out there, and it will affect all of us if and when Congress gets around to it again. One of the health-care bill features—selling across state lines—apparently was not included in the bill President Obama signed. That may or may not have been a good thing. It was, after all, the same issue that was involved in the 1869 case of Paul v. Virginia (75 U.S. 168), a dispute over taxation on an out-of-state agent.
Yet, look at the hullabaloo the post-Katrina mess created. Congress was ready to execute insurance executives, kill the McCarran-Ferguson Act, and create federal insurance regulation. Well, they regulate federal flood insurance, and that was part of the mess, so exactly what the hotheads in Washington wanted to accomplish isn't quite clear.
Ah, but there is always another hurricane season. We may be overdue a biggie, and with the BP oil spill still floating around in the Gulf, President Obama, FEMA, and Homeland Security may have their chance to see if they can do any better than George W. Bush did with Katrina. ("Hello, Big Easy? Are you still there?")
Those of us who have been in the risk and insurance business for more than 20 years may recall when insurance was a respected profession and policyholders held a loyalty to their insurers, similarly to the way many hold a loyalty to their political party or religious denomination. No longer does that seem to be the case. Many of us would drop our insurer or place of worship in a second if some pied-piper played a seemingly better tune. Churches may spend millions of dollars on a new church organ, but people will turn out much faster for a rock band than for an organ recital.
Is Insurance a Religion? Click Next!
Good heavens, what a question! "No, of course not," you say. But then, what is a religion? Having spent a number of years in theological study—my business card ought to read Risk Theologian—I have come up with a list of characteristics of a religion, a sort of collection of criteria. Here it is, at the end of that 10-foot pole.
First, there has to be a set of rules that generally implies ethical behavior, and is publishable as some sort of holy script. We think of the Bible or the Koran, but it might also be the well-litigated and carefully worded insurance policy, a PAP, CGL, or HO-3.
Second, there has to be ritual. It may be implied or detailed. Fraternal lodges or other organizations often have secret handshakes or an established process for doing things. There is generally some sort of special dress or uniform, a costume of sorts that may be in the form of vestments or specialized clothing. George Washington wore his Masonic apron to his swearing in as our first President, yet he did not approve of military medals for his soldiers—it reeked too much of monarchial ritual.
Third, there must be a leader and a hierarchy. It might be a priest, imam, monk, or shaman, a captain, judge, coach, or referee. There has to be someone who is officially in charge of the process, usually the one who knows—and perhaps interprets—the rules of the holy script.
Lastly, there must be a temple, a place where the religion's adherents gather to participate. It may be a stadium, theater, arena, courtroom, or other specially designed structure.
There must be sacrifice—perhaps even blood sacrifice—and a sense of combat between good and evil, darkness and light, the yin and yang of life. The battle must be compelling in order to attract worshipers, but there is a price of admission.
Sometimes there is a test that must be passed in order to attend the service, and payment of dues—as much as 10 percent of income—is often requested, if not demanded. There is also a sense of secrecy, where only the insiders know the rules and what is happening and why. Usually there must be a daily commitment made by the group's members.
Well, all of this could describe a football game! It's all there: the ritual, the "good" team versus those other rascals, the sacrifice, the officials, the music, the yelling. Is a stadium not a temple of sports?
This could also describe a courtroom trial. There's the courthouse, which is even called "The Temple" over in London. There's drama, ritual, costume (the U.S. lacks the lawyers in silk gowns and wigs found in England, but the judge still wears a robe), and the requirements of membership in order to practice before the court. Is not every criminal case a battle of good versus evil, with a possible death sentence as the blood sacrifice? It even describes medicine, where physicians and nurses, decked out in blue or green scrub suits, fight the evils of disease and injury.
By these standards, the insurance industry comes up just short of qualifying as a religion. Those of us in the vocation don't wear a special costume any longer (a hat and briefcase used to be standard), but we do have that holy script of policy language to follow, and we tend to match good against bad, especially in third-party liability cases.
We fight the elements and sacrifice our time, but we lack ritual, membership, and a crowd of adherents. Perhaps we would be more satisfied as adjusters if we did have some of those other aspects of a religion, such as loyalty to ethically handling every loss, regardless of obstacles such as company mandates and financial interests. Maybe adjusting would be more respected if we wore special uniforms and had ranks and rituals like a fraternal lodge. I don't think that's going to happen any time soon, though.
Change is always upon us. Every year, the vocation of claim adjusting changes, often due to technological "advances." The more it changes, though, the more it remains the same. Regardless of the type of insurance, even self-insurance, the six words of investigation, evaluation, and negotiation (or resolution) of coverage first, then liability, and finally damages remain sacrosanct.
Like an Islamic call to prayer five times a day, the Sunday church bells, or the weekly and annual holy days, every claim must be handled in this manner. It is more than tradition; it's a mandatory procedure, and without it, that claim, or any claim—if not the adjuster—will go to hell, or some version of it. For insurance adjusters, that hell can be an adverse court decision. You do not want to go there!
So we've now bravely touched those third rails of politics and religion, hopefully without fatalities or heart attacks. Also, for those of you wondering, no, we won't be tackling sex in this column today. That would surely send out too large of a shock.
