They say the more things change, the more they remain the same. That certainly holds true for insurance. Looking over bound volumes of NU from 1985 (for a good laugh, note my column sketch from back then), seeking background for my column on our former managing editor, Tom Maher, I read our coverage of regulation, tort reform and health care costs in stories that could be reprinted today, with few noticing they were actually 23 years old!
For example, in a report from the Monte Carlo Rendezvous of 1985, our former assistant managing editor, David M. Katz (now a multi-award winning deputy editor at cfo.com), wrote the following in a story headlined: "Greenberg Attacks State Regulation."
"The current state system contains too many consumer advocates who are too little concerned with insurer solvency," according to Hank, then president and CEO of AIG.
"I'm not sure that the system of state regulation is capable of dealing with the complexities of our business today," he said, raising the possibility of an optional federal charter way back then.
"There is something to be said for having a choice of the regulatory system you want," Hank said. "State regulation that deals with consumer issues and does nothing about solvency is not helping anybody."
He added that banking, with players free to choose either a state or federal charter, is "a better system."
Mr. Greenberg roasted another old chestnut in that story–the need for tort reform.
"It's been very disappointing that business hasn't done much about the tort system," he said back in 1985. "The Business Round Table has not taken a strong stand on tort reform, and it must."
He added that "just going around and bitching about [the tort system] is not going to bring about change."
Hank called for the formation of a national task force to scrutinize the nation's tort system.
Meanwhile, David Katz, in his "Risk Management Beat" column, headlined "Getting A Leg Up On Medical Costs," wrote that "medical inflation has become such a big issue that it has crowded out just about every other concern on an employee benefits or risk manager's mind."
He noted that "the adjective 'skyrocketing' appears to have attached itself permanently to the phrase 'health care costs.' Corporations have become obsessed with the huge chunk that hospital costs were taking out of their budgets. Doomsday, or at least national health care, is surely at hand." He warned of a "titanic battle ahead" to contain medical care costs. (P.S. We are still fighting, and losing, that battle!)
Shifting back to regulatory battle, our former editor, John Cosgrove, penned a column in his retirement, headlined: "Federal Regulation Revisited: Time To Ask The Feds To Step In?" Writing in the midst of a hardening commercial insurance market, John opined that "perhaps no invitations are needed" for Uncle Sam to take over, due to the "widespread perception of the property-casualty industry, which offers alternating feasts and famines of coverage, the first featuring bargain prices and the second unaffordable charges."
Sound familiar?
John went on to say that calls for federal regulation were either "sinister or salutary, depending on the listener's viewpoint."
Meanwhile, he noted that the National Association of Insurance Commissioners was promising to do better in coordinating their oversight of the industry. Indeed, John Cosgrove reported back in 1985, "the NAIC, with an obvious stake in fending off federal intrusion, says it intends to upgrade its monitoring procedures and to get tougher in performance."
Haven't we heard that before? And many times since???
It's amazing how little has really changed in the industry when you get right down to the fundamental issues, isn't it???
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