Close Close

Life Health > Life Insurance

To The Point: The Cure May Be Worse Than The Disease

Your article was successfully shared with the contacts you provided.

The Cure May Be Worse Than The Disease

Lately, I have noticed a spate of TV and print ads by drug companies touting their latest miracle drug for a variety of diseases or conditions. Invariably, the list of virtues of the drug is followed by a litany of side effects, which leaves you wondering whether the cure is better than the side effects.

I am sure that drug companies going direct to the public in this manner would prefer not to have to mention such drawbacks, but at least the public has a chance beforehand to weigh the odds between the cure and the disease.

Such is not always the case when well-intentioned lawmakers attempt to mandate a cure for a perceived problem. A case that immediately comes to mind is the required use of so-called “child-proof” medicine containers that was initiated by the federal government some years ago.

These pesky containers were particularly vexing to the elderly who had a problem opening them. I recall my mother being so frustrated by one particular bottle cap that she put it on the floor and stomped on it to get at her medication. Before the availability of an option for non-conforming tops, there were horror stories of people who collapsed before they could get to their medicine.

Several years after the introduction of child-proof bottles, I met an employee of the federal agency overseeing this law at a party in Washington. In a discussion regarding these bottles, he stated that more children had actually died from ingesting prescription drugs after the enactment of the “cure” than in the period prior to its passage. He further said that with “child-proof” medicine bottles, people became careless and no longer stored their medicine out of the reach of children.

Moreover, children, unlike their grandparents, had no trouble opening the bottles.

More recently, at a local level, the city of Cincinnati, Ohio, reacting to an incident of racial turmoil, imposed stringent controls upon their police activities. As a consequence, crime has had a spectacular rise in that city, with murders up something like 600%. Prior to the riot that precipitated the change in police activities, Cincinnati had a better record than many of the neighboring cities of comparable size.

Ironically, the people who were expected to benefit most from this cure are the ones now suffering the most. Again I believe the “cure” here is worse than the original disease and many observers of the scene tend to agree, based on the articles written about the present situation.

Comes now another government cure, in the form of the convoluted Gramm-Leach-Bliley Act, aimed at the lack of privacy Americans have today. For the past several months, I have been inundated with declarations and forms from all sorts of companies. I guess the common denominator of all these companies is that they all have information about me for which there may be a market.

I have received notices from companies that include those insuring my appliances, Merry Maids LP, property and casualty insurers, life insurance companies, banks and stockbrokers. I even received one from a bank with which I no longer do business, which tells me they still keep information about me in their files.

Now I have no problem with attempts to assure confidentiality of my personal and financial records. However, it seems to me that GLBA is so wide of the mark in effectiveness that the only beneficiaries of the act are the mills that produced this mass of paper. I am surprised by the silence of the Sierra Club on this issue, for I am certain that a good-sized forest has been sacrificed for this effort.

A July 9 editorial in USA Today complains that banks and credit card companies have sent out notices pursuant to GLBA requirements that are written in graduate level language, are too long (one bank notice was 10 pages) and whose telephone opportunities to “opt out” are too limited.

Articles in other publications complain that the notices are buried in multi-message packets, making them hard to notice. Even an American Bankers Association survey revealed that almost half of consumers never noticed them. They also complain that the language is often ponderous and legalistic.

Unquestionably, the most egregious aspect of GLBA is that if a person wishes that their own information be held confidential, they must affirmatively “opt out” of the system. USA Today states that fewer than 1% of consumers notified have exercised the “opt out” option. If the lawmakers had really been serious in their effort, they would have adopted an “opt in” choice for consumers.

It is worth noting that during the decade this legislation was under development, $200 million was showered upon politicians and their parties by financial services companies, again according to USA Today.

But my concern is, where does this legislation leave the agent who gathers much of the information that is forwarded to insurance companies? I have read conflicting information as to the agents dilemma and I dont know the answer and I am not sure that anyone else does. Uncertainty is the gateway to misunderstandings and lawsuits. Most agents are operating under the assumption that they are covered by the declarations of the companies they represent. I hope they are right.

It is also worth noting that some law firms that have people engaged in estate planning are sending out privacy notices even though there are legal and ethical prohibitions against their sharing client information.

I believe this law needs a lot of changes to make it user-friendly, but it would be even better if this “cure” were repealed.

Reproduced from National Underwriter Life & Health/Financial Services Edition, September 3, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.

Copyright 2001 by The National Underwriter Company. All rights reserved. Contact Webmaster