By Mark E. ruquet
There are a few words in the English language that have the power to evoke powerful emotions. Many a speaker has found himself in no small sea of trouble for generically using historically charged verbiage to illustrate a point, only to become mired in controversy. The resulting cacophony of criticism has prompted apologies, explanations and retractions, and ends up undermining the best of intentions.
Consider one occasion, early in the most recent Iraq War, when President George W. Bush used the word "crusade" during an informal press conference. There was an eruption of resentment in the Arab world and hasty clarification from the White House. Words do mean a lot.
Recently, Ernst Csiszar, president of the Property Casualty Insurers Association of America, addressed the contingency fee and bid-rigging scandal that has rocked the insurance industry–and more precisely, New York Attorney General Eliot Spitzer's probes into industry practices.
Mr. Csiszar–while admitting there was wrongdoing by some, resulting in several guilty pleas and over $1 billion in settlements by the world's three major insurance brokers–chose to criticize Mr. Spitzer for his seemingly unbridled digging into the industry's business. He used two words to characterize Mr. Spitzer's continuing inquiries that evoke bad memories and strong feelings–"terrorism" and "McCarthyism."
My editor, Sam Friedman, already has taken Mr. Csiszar to task in an editorial for his characterization of Mr. Spitzer in those terms. (For reader reaction, see page 5.)
However, at the end of Mr. Csiszar's diatribe–leveled during a recent meeting of the American Association of Managing General Agents in Orlando–it was interesting to see the reaction of those in attendance after he finished. There was a gasp in the room, a pause, and then applause that turned into a standing ovation.
Witnessing the event, there were several impressions I came away with. One, Mr. Csiszar is intelligent, and two, he is purposeful in his rhetoric. It was no accident that he used the phrases he did, and he did so not just to be critical of Mr. Spitzer's motives in his quest to unearth malfeasance, but to tap into a vein of frustration on the part of many in the industry.
When he first unveiled his suit against Marsh & McLennan Companies in October last year, Mr. Spitzer broadly proclaimed that the industry is ripe with corruption–a harsh generalization that many in the business found hard to fathom.
Both insurers and brokers have been forced to rack up substantial legal fees to respond to queries by Mr. Spitzer's office, other attorneys general and regulators. This has made a lot of people unhappy–especially the vast majority of those who conduct all their business honestly.
One might suspect that the applause among those at the AAMGA session had less to do with an endorsement of the characterization of Mr. Spitzer's actions as McCarthyism and a form of terrorism, than the venting of frustration over brokers and carriers being broadly viewed as crooks.
To be told your business is corrupt, to be put under a microscope, to hold everyone in your industry in suspicion, and to have to stew with your resentment with no outlet to protest what you feel is misguided and mischaracterized descriptions of the profession you love, must be maddening.
However, were Mr. Csiszar's comments also an attempt to shoot the messenger–Mr. Spitzer–and evade the issues he raised?
Critics are painting the actions of the New York attorney general as an attack on the insurance industry for purposes of political exploitation–to fuel Mr. Spitzer's run for governor. The credibility of this argument would have more substance if the attorney general did not have a track record of uprooting corruption across the financial services industry. Remember the scandals in mutual fund trading and corruption among investment analysts he unearthed?
There also would be more substance to the argument of overkill if, after months of investigations, nothing came of it. But much has, and the results have not been minor.
Over $1 billion in restitution and sweeping changes in standard operating procedures have been promised by brokers. Two of the three Greenberg titans–Hank at AIG and Jeff at Marsh–have been forced to step down. Ten guilty pleas have been entered. That lends some credence to the attorney general's efforts.
Critics also are forgetting that Mr. Spitzer's office did not wake up one morning and say, "Let's start an investigation of the insurance industry." Someone, or some group, complained to his office, and he responded under his mandate to protect his constituents–the people of New York he hopes to lead as governor.
Without resorting to name-calling, I'll concede that Mr. Spitzer has a responsibility to the agents and brokers who fear they are being swept up in a conspiracy in which they took no part. There are a few agents who say that–privately–the attorney general has reassured them he is not after the "little guy." If this is true, it's only fair that Mr. Spitzer publicly narrows his rhetorical brush. Such an acknowledgement would put to rest agents' fears that they might be next in what some perceive as a witch hunt, and discredit criticism about his motives.
The industry, however, must remember it deals in a business that remains fundamentally arcane to the public at large, which can prompt misunderstanding, suspicion and distrust. Instead of attacking its chief accuser, the industry's time would be better spent making clear to the public that its major focus is service to the customer and fulfillment of the promise that the client's best interests always come first.
Mark E. Ruquet is NU's agent/broker editor. He may be reached at mruquet@nuco.com.
Quotebox, with Mark's mug:
"Were Mr. Csiszar's comments an attempt to shoot the messenger–Eliot Spitzer–and evade the issues he raised?"
Mark E. Ruquet
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