Pres. Obama is about to roll out a proposal to address the regulation of some elements of insurance and of large financial institutions. Fortunately for all of us, the proposal will leave the regulation of most insurance largely to the States, where it historically has been and should remain. There will be an increased Federal presence with other financial products which, if left to their own devices, could have negative national economic effects. Although it looks like Mr. Obama's proposal may leave the door open to greater Federal insurance regulation down the road, we can hope he will learn more about insurance, and its regulation, during the rest of his term and leave it, and us, alone.
Overall, the States have done a very admirable job in regulating insurance. The exceptions have mainly been when States have tried to over-regulate (Florida??), and stable insurance companies cease to write new business because they cannot get approval for actuarially sound rates for the risks that they undertake. When the market then gets "hard", scams (fake insurance companies) often surface that are ill-capitalized, not designed to provide the protection they promise, and the consumer ultimately loses. Agents also lose, as in their desire to help customers obtain insurance, they fall victim to the scams.
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