Study Shows Insurance Industry Creates Crises
Americans for Insurance Reform released a new study earlier this week showing how the insurance industry periodically manufactures crises to boost profits. The study, titled “Repeat Offenders: How The Insurance Industry Manufactures Crises And Harms America” shows that property and casualty insurers work together to create periods of crisis, known as “hard markets”. The industry often uses these periods of manufactured crisis to have their lobbyists argue for “tort reform”, feigning ignorance of the fact that the crisis and the resluting rate hikes were created by collusion amongst the insurers themselves. The study’s authors say that the cycles of boom and bust “are national in scope and occur in every state irrespective of a state’s ‘tort’ law. Because the legal system is not responsible for creating hard markets, enactment of so-called ‘tort reform’ has done nothing to prevent them”. A thorough summary of the AIR report’s findings, as well as a link to the complete report, can be found here. The report warns that in recent months the insurance has been trying to create a new hard insurance market. The study has been sent to all 50 state insurance commissioners and the newly formed Federal Insurance Office, urging stronger regulation of the insurance industry and a repeal of the anti-trust exemption granted under the McCarran-Ferguson Act. For a good idea of how Florida has been affected by these insurance industry manipulations, read the Sarasota Herald-Tribune’s Pulitzer Prize-winning series on property insurance in Florida here.
This entry was posted on Tuesday, December 20th, 2011 at 2:37 pm and is filed under Insurance and Consumer Rights, Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.
