Reportedly, Insurance is one of the hangups in Federal Regulation of the Institutions responsible for the currrent Credit Collapse. One of the supposedly "difficult and unresolved" questions "is how the federal government should more aggressively regulate insurance companies, which are now exclusively" regulated -- successfully, for Centuries it should be pointed out -- by "a patchwork" of State Insurance Commissioners. Stephen Labaton, "An Overhaul of Financial Rules is Taking Shape" p. B1, col. 3 (New York Times Nat'l ed., "Business Day" Section, Tuesday, June 2, 2009). There seem to be at least three problems with the idea of the Federal Government expanding into the business of Insurance Regulation.
One is that the Federal Government has no experience in it.
A second is that the Federal Government's record on Regulation stinks.
The third problem is that Insurance Companies had next to nothing to do with causing the current Credit Collapse in the first place.
Still, "the financial lobby is lobbying hard against" regulation of Derivatives, including regulation of Credit Insurance Policies which were not so cleverly disguised as Credit Default Swaps, "arguing that too much regulation would thwart financial innovation." Id. Right. Their "innovation" is what has caused this painful economic situation, a pain which they do not seem to realize exists, let alone share.
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