Don McNay quoted in Business Week
"Everyone recognizes the AFLAC duck, but I don't know anyone, including myself, who could identify the president of AFLAC," he wrote in his most recent column, which can be read at www.donmcnay.com.
"Spitzer, like Teddy Roosevelt, a New Yorker of an earlier generation, understands there is a road to the White House by taking on big business," Mr. McNay wrote. "Like Roosevelt, Spitzer comes from wealth and relishes a good fight. The bullying tactics that always worked for Greenberg backfired when he came up against Spitzer."
"I won't be surprised to see state attorneys general and members of Congress adopt the mantra of insurance reform as they seek higher offices. It is a no-lose political issue as long as `Hank' is the public face of the industry," commented Mr. McNay.
The CEO of a risk management consulting firm suggested the insurance industry's actions mean it won't win much sympathy from consumers. "Let us not forget the ill will the insurance industry causes with their perpetual swings from soft market to hard market and then back again....How many businesses, especially small businesses, have been damaged due to these maniacal market swings?" the consultant questioned.
The president of an actuarial consulting firm said of industry executives, "of course they're silent," for fear of becoming targets.
"Even if they've done nothing wrong and their companies are squeaky clean (and many of Spitzer's targets have done nothing illegal, immoral, or unethical), they will be distracted from running their businesses and will spend many millions of dollars defending against frivolous charges (and there is no sanction for an out-of-control prosecutor). In the process they may be ruined, personally and professionally, because they are presumed guilty until proven innocent, and even if proven innocent, the damage may be permanent.
"The end result of all of this is that a few bad apples will be punished, a lot of good apples will be ruined, and we all will end up paying more for insurance coverage," he wrote.
Several readers, however, suggested that where's there's smoke, there's fire, and that Mr. Spitzer's investigations are needed to uncover real and pervasive wrongdoing in the industry.
"Our leaders in industry had an opportunity to change their business practices after watching Enron, WorldCom, Tyco and some of the other companies who had chosen to defraud both individuals and businesses. Our leaders chose not to make changes and this had led to our current situation," a claims executive wrote. "I can only hope that we learn from this and go forward from here to set the business standard once again. Until we are willing to take a hard look at ourselves, I doubt that we will break free from times such as these," a claims executive wrote.
And, as Felix Kloman, editor of "Risk Management Reports," wrote in an April 4 letter in BI: "Perhaps the lack of insurance industry response is because too many of its practitioners, even the large majority who are free of direct corruption, acknowledge what Eliot Spitzer and the SEC have found: a system riddled with blatant conflicts of interest. True...only a few...have broken the law, but the entire industry, including the buyers, have willingly subscribed to a system that is basically unethical, one that has misaligned interests for more than 40 years. Perhaps it's the silence of embarrassment that you hear," he wrote.
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