I have been a lifelong player and fan of tabletop role-playing games (RPGs). Remember Dungeons & Dragons? Games like that. Heck, I even used to write them for a living for a few years, so that gives you an idea of just how deep my geek roots run.
The thing with role-playing games is that they are complex. Even the simplest RPG tends to have rules that are an order of magnitude more complicated than the rules of your average board game. Most RPG books are nothing but rules, and nowdays, they run more than 200 pages thick. I remember one author produced a 900-page sourcebook that was, quite literally, thick enough to stop a low-velocity bullet. But, this is part of their charm to their intended audience. RPG geeks like myself enjoy digesting all of these rules and figuring out how to interpret them when the game is played. Often this leads to the games themselves being dynamic, unpredictable affairs that ensure no RPG session will ever play out the same way twice.
The dark side of this, of course, are what are derisively termed “rules lawyers.” These are players who like to parse the rules so closely that they never get into the spirit of the game. Rather, their every involvement is akin to trying to get ahead by exploiting loopholes, or falling back on technicalities. Once, it seems clever. Twice, it seems persistent. Three times, and it’s rules lawyering. And while the rules lawyer might take pride in gaming the system as he does, it’s a real buzzkill for everybody else in the game. This is why rules laywers typically have short careers in any given gaming group. This kind of behavior is a pretty sure way to get uninvited to future games.
I bring this up because it hit me today while on the road, an argument in favor of the secondary insurance market, given to me by somebody from a life settlement company. He said that the big reaon why life insurers are so against the secondary market in general and life settlements in particular, is not because of concerns that life settlements are just a pretext to stranger-owned life insurance. And it’s not out of a concern to protect consumers from the kinds of abuses often attributed to the secondary market. It is because the secondary market business model exploits inherent weaknesses in how life insurance is traditionally underwritten.
“It’s not my fault the life industry is so stupid,” I was told. “They’re just mad that we’re taking the opportunities that they won’t stop presenting to us.” He was speaking about the relatively low surrender value of life policies that get outbid by life settlement companies, who buy about-to-be-surrendered policies, thus botching the retention model for insuers, who price their products based, at least in part, on assumed wash-out rates. Policies charging X for policies that are worth Y in benefits deliver the most value back to the insurer only if Z policyholders drop the policies at some point along the line, paying premium into the system without ever cashing out in some way, shape or form.
For a rules laywer, this is a loophole so big you could fly a 747 through it. If insurers are offering A to folks about to surrender, then simple: offer them A+1 instead. It’s the equivalent of a gas station pricing war, only in reverse, and at least one of the stations is basically buying the other guy’s gas and marking it up.
The whole argument between the primary and seconary life markets is more complicated than that, of course. But whenever it surfaces, I cannot help but think that to some degree, this all boils down to a rules laywer situation. On one hand, you have to give the rules lawyer credit. If the rules are written in such an easily exploited way, then maybe the people writing the rules should have playtested them a little more rigorously before putting them out for general consumption. At the same time, rules lawyering often uncovers interpretations of the game that is technically legal, but wholly against the spirit of things. So the rules lawyer wins the legal argument with the referee, but earns the scorn of every other player. Which one is right? Which one is wrong? Impossible to say, really, since both are contributing equal shares to a seemingly intractable conflict.
The referee’s answer to this is typically to just push the game along, present the funky, polyhedric dice to the players and give them the cardinal commandment of any RPG that puts all arguments aside: Just roll, already.
Alas, there is no authority that can pull the warring sides of the industry together on this, but there is hope that some happy medium might yet be found. Eventually, I suspect the rules will be fine-tuned so that the secondary market, while legal, is no longer viable financially, and so it will vanish. I kind of wonder why the primary market doesn’t just start its own life settlement companies and buy up the policies that are about to lapse and keep everything in house. I’ve been told more than once by folks in the life settlement industry that they’re kind of waiting for that shoe to drop, but somehow the industry just doesn’t want to go there. Fair enough. But if there is a broken rule and some rules lawyer is rasing hell with it, the referee that lets it go loses their ability to gripe about it, after a while.