The insurance industry prides itself on a promise that it makes to every policyholder–to compensate them for their loss within the terms of the contract the parties have agreed to. From the beginnings of insurance to the present, this arrangement–to make the policyholder whole again–has worked well most of the time.

This promise has allowed entrepreneurs to take risks they might have been reluctant to consider otherwise. It has given solace to families who have suffered after the loss of a home, a car or a family member, as well as those with medical problems.

Yet for all its benevolence, insurance is a business, and those who engage in business have a primary intent–to make money.

But many in this industry, agents and carriers alike, pride themselves on their altruism. Whether it is the Main Street agent aiding a local charity or a carrier sponsoring the good works of an aid organization, the industry makes an effort to be more than just a faceless financial institution.

Back in December, Joe Plumeri, the chief executive of insurance broker Willis, addressing the Insurance Industry Charitable Foundation (for which he was the evening's honoree), told those in attendance that the industry does not get enough credit for the things it does right.

More recently, at a January meeting sponsored by the Property Casualty Insurers Association of America in San Antonio, Texas, executives discussed reputational risk. While not breaking any new ground, there was at least consensus among the executives in attendance that something should be done to address the poor standing of the industry in the eyes of the public.

One point of action would start with the rank and file, giving them some talking points to defend their industry. There was also talk about launching a campaign to illustrate how insurance makes the lives of people better.

However, for every good deed, there seems to be a contract dispute with a homeowner or an inexplicable denial of a health insurance claim that puts the industry in a bad light.

After 9/11, the industry stepped forward by not invoking its war exclusion. But this act of comity was to be overshadowed by the legal wrangling over whether the coverage of some insurers was for one or two acts of terrorism.

After Hurricane Katrina, despite settling thousands of claims, a theater of the absurd ensued in the coverage dispute between Mississippi Sen. Trent Lott and State Farm that only served to cast the industry as being more concerned with the dotting of “I's” and crossing of “T's” than the welfare of individuals caught up in a tragedy.

This is not a judgment on whether the insurers were justified in their actions, but my observance of the consequence of the contradictory mission of the insurance industry–how to fulfill the interests of the greater good while meeting the self-serving interests of running a profitable business.

The current dilemma for the industry is health care reform. There is really only one meaningful question for everyone to consider: How can the United States provide health care coverage for more than 45 million Americans who don't have it?

Instead of developing a workable plan, the issue has become entangled in the narrow concerns of special interests and selfish political stratagems.

For health insurers, the concern is obvious. Even the property and casualty side of the industry cannot escape the ripple effects, as some aspects of the legislation could impact sales within benefit practices and p&c insurers could one day see more cost-shifting.

The industry here is really caught in a quandary, one that goes to the industry's contradictory mission: Is health insurance about health or profits? Can it be both?

For the pundits and critics, the answer seems to be both and neither. Where we should be building consensus, there is instead fear and panic, misunderstanding, lies and hyperventilating from commentators on both sides.

For the insurance industry, it is time to stop being reactive and long past time to take some initiative. Few legislators understand insurance, but they do understand an elderly voter's fear over losing their benefits or a parent's pain when a child's coverage is denied.

This industry should realize that it would be in its best interest to devise a comprehensive plan that serves the greater good while answering business demands. It is time for imagination and invention.

Despite the recent passage of the health care reform act, there are still areas for improvement. Instead of denial and delay, a little imagination could make this nation's coverage of health care the envy of the world. For example:

o Why isn't there a federal reinsurance plan that limits insurers' major losses?

o Why weren't assigned risk programs set up to subsidize coverage for the uninsured and make it affordable so the government didn't need to step in?

o Can we please get past demonizing government and arguing that cutting taxes will solve every problem?

o At what point do we do the truly hard work by making tough decisions in terms of cutting costs, streamlining bureaucracy and dealing with the reality that we have to pay for the reforms needed?

Passage of health reform by Congress does not guarantee this legislation will take effect. The courts will have their say, based on the actions planned by a number of state attorneys general to challenge mandates. If they successfully gut the reform law, costs will continue to rise unchecked, and the growing number of uninsured will keep putting pressure on the government to act.

The band-aid solutions offered by Republicans on health reform do little to alleviate the dilemma of the uninsured. Insurers must lead on this issue and stop posturing. People need workable, affordable answers to their health care insurance needs.

With the ranks of the uninsured on the rise, a growing wave of discontent is building that has already begun to envelope the insurance industry. If the status quo would have been allowed to continue, it would have eventually made the Tea Partiers look like Boy Scouts, and made a total government takeover inevitable.

It's not too late for insurers to make a difference. What will you do?

Associate Editor Mark E. Ruquet may be reached at mruquet@sbmedia.com.

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Health Reform Debate Is Likely Far From Over

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