About every three weeks I pay a visit to my local barber and without fail, toward the end of my clip, and the approach of her tip, she purrs the phrase “All for you,” in her broken Russian accent.
Now, I like Lana and respect her work, but when I hear her utter her signature sign-off, I get an uneasy feeling: of someone who is about to be fleeced.
At the spring meeting of the National Association of Insurance Commissioners, the phrase ‘what’s good for the consumer’ came up a lot. I didn’t take an official count. But a good baker’s dozen seems about right. Actually, that might even be conservative.
The phrase seemed to come up whenever the topic of the Paulson report surfaced. The report, among other points, calls for an optional federal charter and the establishment of a national insurance office.
Proponents of an optional federal charter say that by allowing companies the choice of being regulated on a federal level or by states, consumers are better served. Companies can operate more efficiently and cost savings are passed on to consumers.
State regulators say they are nearest the consumer. Mr. and Mrs. Consumer can pick up the phone and call their local insurance department for help. They assert that a 1-800 call to a federal regulator will do little to help a consumer who is trying to sort out an insurance problem.
Well, I’m a consumer, so I should feel good, right? Sure. Except, the phrase sounds too good. It rolls off the tongue. And, perhaps that’s the problem. It rolls off just a little too easily.
In theory, consolidation is supposed to make things more efficient. So, one is better than 50. And that can be true. Except for the inclination of federal projects to mushroom into bureaucracies that ultimately cost taxpayers who are also consumers.
Instead of advocating for the consumer by calling for a new insurance regulatory structure that is untried, perhaps there are more immediate ways companies can help consumers. For instance, companies could support including more data, if it is not tied to a trade secret, in the annual statement filing. Wouldn’t it benefit consumers to have more information?
Or companies could increase the cash surrender values in their products. Had they chosen to do this early on, it’s possible that the path that led to the huge STOLI battle at the NAIC, NCOIL and now in state houses might not have occurred.
Or they could offer better disclosure of commissions associated with insurance products. That would help consumers make better choices.
Or how about not making people jump through hoops and wearing them down when they try to get a medical claim paid. Now, that would really be good for the consumer.
And if state insurance regulators really want to benefit the consumer, and in most cases I believe they do, then there are a number of things they can do.
For one, they can continue their efforts to establish state programs, such as Iowa and Wisconsin are developing, to create better annuity protections.
For another, they can try to keep more of an arm’s length distance from accepting too much from industry representatives. At least one commissioner won’t even accept a bottle of water from industry. That is laudable, although I don’t think it need be that draconian. Few consumers would deny a hungry regulator or legislator an hors d’oeuvre or cocktail after a day of NAIC or NCOIL sessions. In fact, after some of those sessions, a cocktail is in order. Just be reasonable and not over the top.
If both sides can look to what they can do right now, then maybe they really will have the right to say ‘All for you.’