Spitzer Probe Should Not Prompt Federal Oversight

Broader issues of public policy are being raised in the wake of the actions by New York Attorney General Eliot Spitzer to combat alleged wrongdoing by a major insurance broker and a number of the prominent carriers with which they do business. Anytime alleged abuses spawn reform efforts, there is a risk of getting some aspects of the reforms wrong and creating a new set of problems.

We are amazed at how many people, speaking with what appears to be scant knowledge of the insurance industry as a whole, have cited the Spitzer lawsuit to assert that compensation arrangements in insurance are "like no others," that insurance is non-competitive, that state oversight of insurance is a failure, and that the clear path to salvation is federal oversighta refrain also being echoed by some insurance executives. We disagree with all of these assertions.

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