The lawsuit against Marsh and the statements of New York AG Spitzer are getting major attention in the press. The October 18, 2004 Wall Street Journal has an article that calls into question whether state regulators are up to the task of policing the insurance industry. The article states, in part, “State regulators in general haven’t shown the strength or initiative to investigate abuses. They also have shown a tendency to yield to industry pressure and a questionable cross-pollination of regulators moving in and out of the industry they oversee.”

The fact is that the NY action is a joint venture engaging both the NY State Insurance Department working with Mr. Spitzer’s office.  These actions demonstrate that the system of state oversight is working the way it should. State regulation is by far the most effective and expeditious means of protecting consumers. We are also concerned by the tendency on the part of some to think that the best way to improve something is to let people in Washington, D.C. decide how to do it.

For the record: PIA supports functional state regulation of insurance. A PIA member survey published last week demonstrates the depth of PIA members’ support.

October 19, 2004