From Alvin W Wolfe.
CORRESPONDENCE WITH REP GUS BILIRAKIS -- HAVE YOU WRITTEN YOUR CONGRESSIONAL REPRESENTATIVE? May 31, 2007
The Honorable Gus M. Bilirakis
Washington, D.C. 20515
Dear Congressman Bilirakis:
Thanks so much for responding on May 9 to my message of May 5 regarding federal regulation of insurance companies. I am concerned that you have decided not to cosponsor H. R.1081, the Insurance Industry Competition Act repealing the exemption congress gave to the insurance business in 1945. In my view, that exemption has brought us to the impasse we are in, where states alone have the responsibility to regulate insurance companies, but they simply cannot do it because the insurance industry is colluding nationally and no state has enough information or clout to do much about it.
Your reasons for not supporting the Insurance Industry Competition Act sound suspiciously like the talking points of the insurance lobby, which by the way, gives more to politicians than does the defense industry.
For example, you say: "Currently, insurance companies use their antitrust exemption to pool data, allowing companies to more accurately set their prices. If insurance companies set their prices too low, they may be unable to pay claims in the future, hurting consumers." I don't believe there is anybody in Lutz, or anywhere else in your district, who is concerned that their insurance company might set the rates too low. The industry had its two best years ever in 2005 and 2006, years when we suffered great losses, and the rates are rising still!
You use another insurance talking point: "Insurance companies also use the exemption to standardize policy forms, making it easier for individuals to compare and contrast rates." The way things are now there is no rational comparison – we have to have insurance, and we have to pay what the company demands.
That brings us to a third insurance industry talking point: "Under current law, antitrust laws still apply to insurance companies to prohibit coercion and intimidation." Actually, the actions of the insurance companies coupled with the demands of the home finance industry, come very close to coercion and intimidation.
And, fourth, you say, along with the insurance industry, "Moreover, the McCarran-Ferguson Act ensures competition within the insurance industry as more new companies can enter the market using previously collected data." Scientific data on probabilities and assessment of risks need not be held as private industry property. In fact the federal government does such studies and has mountains of data that could be used if the McCarran-Ferguson Act did not prevent its use to permit competition because "the insurance business is only regulated within each state."
Under the current situation, no state government alone has the resources to amass the objective data needed to properly regulate the insurance industry.
Finally, you say, "Until I can be assured that repealing the antitrust exemption will not adversely impact my constituents, I cannot cosponsor this bill." Now, Rep. Bilirakis, there is much to say here. This is the ONLY business (aside from Major League baseball) that is exempted from antitrust regulation. Your constituents, me included, are seriously adversely impacted because the insurance industry is free to do whatever it can get away with in all areas of insurance – property, automobile, life, health, business and professional liability, etc.
Think about the impact of all that. Witness Florida, and the hurt that your constituents are feeling in all these areas. Support H. R. 1081: Repeal this unwarranted exemption.
For the Lutz Democrats, sincerely,
Alvin W Wolfe, Ph.D.
Lutz, FL 33548
Attachment: URL to PetitionOnline: Repeal Insurance Industry Antitrust Exemption