We’ve been posting a lot about big insurers’ cynical plot to win deregulation as part of the federal financial overhaul — e.g. Auto, Home and Other Insurers Pushing Deregulation Proposal To Opt Out of State Rate Regulation, Consumer Protections. A few weeks ago the New York Times published an op-ed by Allstate’s CEO making the pitch with the ironically titled piece "Regulate Me, Please."
The legislation that Allstate (and State Farm and the other bigs) wants would create an optional federal charter for insurers, in which companies could opt out of traditional state regulation and instead select a new federal overseer. The New York Times editorial rightly calls this "Regulator Shopping." Earlier in the year, Treasury Secretary Tim Geithner explained why this is crazy (and then awkwardly offered some support for it, see our video and our action page.
In this May 21, 2009 editorial the Times makes the case against this proposal and against the broader effort to use the national banking crisis (itself a result of deregulation) to leverage the weakening of state oversight of the insurance industry.
At play here is the power of the insurance industry that has
clamored for federal — weaker — regulation for nearly a decade. The
industry, and its Congressional supporters, are trying to use the
current upheaval to advance a predetermined agenda.
The effort is disingenuous — and a shame.
I couldn’t agree more.