New Insurance Bill Helps Insurers and Consumers
NOTE: Due to the speed at which this press release was written, not all parties quoted reviewed it before it was sent. All quotations, however, are acurate. The American Consumer Institute should not have been described as a "free market" group. CEI, not The American Consumer Institute is responsible for the press release and the error. Members of the media should not describe The American Consumer Institute as a free market group.
Washington, D.C., July 25, 2007—A group of free-market public policy organizations today released statements on the National Insurance Act to be introduced today in the House by Representatives Melissa Bean (D-IL) and Ed Royce (R-CA).
The bill would let property and casualty insurers organize themselves under Federal rather than state laws and thereby overcome state-level regulations that many industry experts and consumers find burdensome.
The independent, non-partisan organizations include: the American Consumer Institute, the Competitive Enterprise Institute, Freedom Works, and the Independent Institute.
Statement by Alexander Tabarrok, Research Director for the Independent Institute:
Too many cooks spoil the broth and our current system of multiple state regulators is raising costs for insurance companies and consumers. An optional federal charter system has worked well for banking and could help to clean up the current mess of inconsistent, overlapping and costly state regulation.
Statement by Wayne Brough, chief economist for FreedomWorks:
The insurance sector has reached a critical juncture. Excessive litigation and archaic state regulatory regimes have made it difficult to provide consumers with the insurance coverage they desire. When carriers choose to abandon entire states rather than do business under existing regulations, there is a clear problem. An optional federal charter creates an opportunity to address rising regulatory burdens that provide little or no consumer benefit, and we are pleased to see Congress engaged on this important issue.
Statement by Eli Lehrer, a Senior Fellow who directs insurance studies at the Competitive Enterprise Institute:
We have a badly broken insurance regime in the United States. I’m not one who normally would endorse a proposal to create a new federal bureaucracy but, if it liberates markets from the tyranny of state regulation, I’ll support it.
Statement by Steve Posiak of the American Consumer Institute:
The chief economist of a free-market oriented consumer group offers similar thoughts. "It is time to give customers relief from duplicative and costly state regulations that ultimately saddle customers with higher prices and lower service innovation," says. "This legislation opens the door for increased price competition while providing necessary federal oversight and consumer protections."
Wayne T. Brough, PhD
David J. Theroux
The Independent Institute
American Consumer Institute
Competitive Enterprise Institute