PC360 brings our readers the top quotes from major industry players for the week of April 9. Industry leaders comment on topics ranging from recent government-regulatory efforts in the U.S. and Europe, to the potential for an active wildfire season, to new efforts to cap crop-insurance subsidies.
ACE Chairman and Chief Executive Officer Evan G. Greenberg commenting in a letter to shareholders about the trend toward over-regulation in the U.S. and Europe and what he sees as wrongheaded efforts to implement “one-size-fits-all” insurance regulations for risk management, capital and governance:
“In the U.S. and much of Europe, we face an unrelenting assault on business by government. [Some regulators and political leaders believe] the primary job of government is to protect its citizens from the evils of business.”
In a Willis report on commercial-insurance rates rising, Chairman and Chief Executive Officer Joseph Plumeri helps risk managers frame the conversation about the emerging reality of having to pay more for coverages:
“The role of the insurer is to make sure they survive the storms so that when their clients need them, they will be here. What insurers offer...is their own resilience.
“We suggest that risk managers and others in charge of risk mitigation and risk transfer may benefit by taking a similar view of your own work. That, ultimately, is your job as well: ensuring resilience.”
Federal Reserve Board Chairman Ben Bernanke discusses a "shadow-banking" system he says is responsible--even more so than the housing crisis itself--for the financial crisis and prolonged economic slump. He used American International Group as an example of how this system operated outside of regulators' authority:
“[I]nsurance operations of AIG were supervised and regulated by various state and international insurance regulators, and the Office of Thrift Supervision had authority to supervise AIG as a thrift holding company, [however] oversight of AIG Financial Products, which housed the derivatives activities that imposed major losses on the firm, was extremely limited in practice.”
U.S. Senator Tom Coburn, R-Okla. (pictured left) and Mike Becker, assistant vice president of PIA National (pictured right) offered very different assessments of a Government Accountability Office recommendation to cap crop-insurance-premium subsidies for individual farmers or reducing subsidies for all farmers, or both:
Coburn: “I applaud GAO for providing Congress with yet another way to save taxpayer dollars and reform government.”
Becker: “The program sustained multi-billion dollar cuts during the 2008 Farm Bill and additional multi-billion-dollar cuts during the most recent Standard Reinsurance Agreement. ...When it comes to budget cuts, crop insurance has already done much more than its fair share.”
California Insurance Commissioner Dave Jones commenting on his lack of authority to regulate health-insurance rates despite being able to regulate medical-malpractice rates:
“It defies reason that the insurance commissioner has the legal authority under Proposition 103 to reduce excessive medical-malpractice-insurance rates for doctors, dentists, and other medical providers, but I don’t have the authority to reject excessive health insurance or HMO rate increases for ordinary Californians, their families, or their businesses.”
Insurance Information Institute President Robert Hartwig issues the following warning regarding what could be an active year for wildfires in the U.S.:
“With more than 15,000 temperature records broken in the United States in March 2012 alone, combined with low precipitation and little or no snowpack across much of the nation’s lower 48 states, this year could be very active one for wildfires and brushfires, including parts of the Northeast where such events are relatively uncommon.”