An “unholy alliance”

An analysis of the campaign to advance federal regulation of insurance

As professional insurance agents, we might in a quirky way consider ourselves flattered that there are never-ending attempts to take our business away from us.

If we weren’t so successful at what we do, we would be ignored. Because we are successful, there are many others who would like to take our place. While this always poses a challenge, it is also important validation for us.

Banks have been trying to take over the insurance business for many decades. It must be incredibly frustrating to bankers that they cannot simply declare insurance to be a banking product, commoditize it and walk away with all of the earnings of our industry. Lord knows, they keep trying to do that, and they’re still at it.

The latest tactic from advocates of so-called optional federal charters for insurance is to repeat, ad nauseam, their contention that our state-based system of insurance regulation is broken, that it is horribly inefficient and therefore needs a massive restructuring. There is just one problem with that. It is not true.

Unfortunately, a tactic that sometimes works is to keep repeating something until people begin to believe it. A perception created by the media can easily become the reality to folks who do not know the whole story, as we see on a daily basis these days.

How in the name of all that is sacred can the insurance industry be so financially successful that some groups actually suggest imposing an “excess profits” tax on it, while at the same time being so “inefficient” that it must be radically reorganized? The answer is that these positions are being advanced by forces with their own agendas.

At the same time, some self-styled consumer activists want to tax the insurance industry out of existence so that the government becomes the only insurer; an unholy alliance of big banks, big securities firms and big life insurers wants to bring about a dual system of insurance regulation of its own design, for its own exclusive benefit.

I believe insurance is for the public good, thus we are held to a higher degree of care within each of our states through state regulation. State regulators are the watchdogs closest to the consumer and the agent. Free enterprise and the private sector can handle this industry much more efficiently than giving it to big government and creating a dependency by our citizens and a mindset that the government holds the only remedy to all the ills of society. That is not democracy, and that is not America.

Despite the money and power of this unholy alliance, which Len Brevik described as an “axis of self-interest,” I remain powerfully optimistic that professional insurance agents are up to the challenge. Why? Because the people are with us.

A recent survey of consumers commissioned by IBM found that three-quarters of insured Americans are satisfied with their agents and remain committed to working with them in the future.

Professional insurance agents have the trust and confidence of consumers. Despite all the attempts to win them over, people continue to turn to their Main Street agents for their insurance needs.

This is a powerful vote of confidence. Now is the time for all Main Street agents to use this support to let Congress hear our voices.

Donna L. Pile is president of the National Association of Professional Insurance Agents. Web site: www.pianet.org.

Topics Agencies Legislation