Readers Have Their Say
It's no surprise that my May 9 column, "Spitzer's No McCarthy," drew many responses. The surprise was that the overwhelming majority backed me up.
If you missed the editorial, I chastised Ernst Csiszar for characterizing the tactics of New York Attorney General Eliot Spitzer as "corporate terrorism," and saying his technique "smacks of McCarthyism." (Mr. Csiszar is president of the Property Casualty Insurers Association of America, and former president of the National Association of Insurance Commissioners.)
"Mr. Csiszar seems to suggest that insurance operations need to stay inside a black box, and that sunshine would bring death to the monster within," wrote one CPCU. "What Mr. Spitzer has exposed is the frightfully weak regulation at the state level. I would be very surprised if this whole episode does not bring a renewed cry for national regulation. The crime is that most insurance departments are trying to do the right thing, but are understaffed and mostly politicized."
"Considering the smokescreen being blown toward Mr. Spitzer, one wonders if it is to hide the fact that [Mr. Csiszar and fellow state regulators] were sound asleep while all this activity was taking place under his watch," e-mailed an agent and former underwriter.
Another agent wrote: "Mr. Csiszar's comments relative to Mr. Spitzer–and I am a conservative Republican–indicate not only is there a rotten apple, but worse, the barrel is rotten to the core in regards to the regulation of the industry and the industry's self-regulation. One can argue [Mr. Spitzer's] zealousness–even overreaching–but the industry is confusing cause with effect. The industry–including regulators and industry groups–is the cause, or there would be no Spitzers."
There were about a dozen more e-mails and calls of support, but I did take some heat from two insurers. "Count me as one reader who regards Ernie Csiszar's view of [Mr.] Spitzer as being a far more realistic one than the 'just doing his job' analysis in your editorial," wrote one executive.
"…His enforcement objectives could have, and should have been accomplished with far less turmoil and collateral damage. Instead, motivated by political ambition, his methods have resulted in thousands of innocent workers losing their jobs, tens of thousands of innocent investors having their net worth ravaged, and an entire industry being put under suspicion for the acts of a relative few," this insurer added.
"You say Spitzer's not a terrorist because he didn't kill anyone," he added. "A terrorist is someone or some group that uses the illegitimate threat of violence to accomplish its political goals. I would submit that [Mr.] Spitzer fits the definition. [Mr.] Csiszar was just telling it like it is."
One criticism from the two insurer e-mails hit home. "It is appropriate for you to caution people from the insurance industry against demonizing our critics–yes, even Eliot Spitzer, who has hammered our whole industry when he uncovered wrongdoing by a few," wrote one company president. "But it is troubling to see you, editor of a credible publication serving our industry, follow suit when you write, 'He caught the industry red-handed in outrageous criminal misdeeds.'"
He's right. I should have said Mr. Spitzer caught a number of individuals at high-profile firms red-handed–not the entire industry. But please don't forget these were huge players, over $1 billion has been set aside for restitution, and a massive overhaul of industry practices has been launched.
That's a pretty big shadow hanging over the entire industry that neither the guilty nor the innocent can afford to ignore.
Sam Friedman
Editor-In-Chief
"One criticism hit home. I should have said Mr. Spitzer caught a number of individuals at high-profile firms red-handed, not the entire industry."
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