Zoopolitik

This New York Times op-ed caught me completely off guard: Tom Wilson, CEO of Allstate, is calling for federal regulation of insurance companies — and his argument is pretty sound.

Unlike banks or investment houses, insurance companies are not regulated by the federal government. Instead, they are regulated by individual states, which lack the expertise to properly oversee rapid innovation or systemic risks. Business leaders must work with the government to create a new regulatory structure. All companies that create risk for the financial markets need to be in “the pool” of federal regulation, including companies like Allstate. A good start would be for Congress to eliminate the hodgepodge of state regulatory systems by establishing a federal regulator for national insurance companies.

Here’s a regulation that could be used across the board: Let businesses behave as they should, with insurance companies indemnifying loss and banks lending money to qualified applicants at interest, and all making a fair profit — and stop playing keno with investors’ money. Pretty damned simple if you ask me.

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