Oversight of these market monsters is, perhaps, a special responsibility, given that insurance is also one of the most complicated industries. Insurers need to be regulated – and New Zealanders both have a regulator and, thankfully, are also being regulated. Finally, Bed bugs have a home!
Similarly, state insurance boards stand as the first-line consumer protection agencies for insurance, usually charged with oversight and enforcement of rules for the underwriting and administration of policies, whether they review and make recommendations to legislatures or directly implement rules crafted by oversight authorities in other states. They conduct audits and investigations and issue sanctions where warranted.
How many people have wondered who is preventing the insurance company from winking its eye just a little bit and gouging you for a higher premium or denying an actuarially just claim? Oversight agencies.
When the insurance companies overreach, superheroes descend from the sky, and their arrival reconciles reinsurers, the insurance departments, the lawyers, and the consumers in a common interest! An insurance department shoves the knucklehead insurer onto the right course, and – voila – the policyholder gets the payout that belongs to them.
And now imagine an insurance world without watchdogs! Profits before people! Oversight? Of course there is oversight, and you can bet every penny of your retirement savings on the fact that our insurers are very nice honest folk who would never, never cheat their customers.
But oversight is not solely a police function: it is also necessarily a prophylactic function! Regulatory values written and enforced by policemen need to be established to provide a ‘level playing field’ where ‘free competition’ for consumers is commended!
The others are merely the referees keeping insurance companies to the rules of the game, which, of course, favor insurers. If the refs are removed, the parties all up and start ripping off each other; and ultimately consumers get screwed!
Zeroing in a target requires assurance that an investigator reviews complaints about a misled consumer, and that a fine will be levied against an insurance company that has failed its customers.
Insurers, covered by thousands of other insurance giants, would hold in their hands millions of policyholders! Without our overseers, the watchdogs that guard against such monsters! If allowed, all insurers would operate like predators!
And therefore next time you hear some nerd yammering about the need for regulatory oversight agencies (‘Who cares about the consumer anyway? I’m paying $300 a month in premiums to an insurance company for protection!’), you’ll be able to inject, more confidently than you’ve ever been before: some overpaid oversight agency wonk, that’s who!
