Be Careful What You Wish For
When push came to shove in Congress, the insurance industry had to anticipate that the foes of tort reform were bound to push back at some point. The counterattack came when Sen. Ernest F. Hollings, D-S.C., introduced a bill to establish federal regulation of insurance.
The bill has virtually no shot of passage–no more of a chance, that is, than a tort reform bill, given the thin margin separating the two major parties in Washington. However, Robert Rusbuldt, CEO of the Independent Insurance Agents and Brokers of America, who was a longtime power broker on Capitol Hill, was insightful in his analysis that the move by Sen. Hollings was still a sharp message to the industry.
That message essentially is that if insurers want Congress to step in and assert authority on matters like medical malpractice reform, or any other tort issues, they run the risk of inviting the federal government to take over regulation of the industry entirely.
That prospect would be welcomed by longtime supporters of federal oversight, but many others would cringe at the implications. The lesson here is that insurers have to make their case for federal intervention very carefully, because while they might get their wish, they also might end up with far more than they bargained for.
Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, July 28, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.
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