This could easily fit under CABO's "Obama and one world government" but since it is specific to insurance I felt it belonged in its own thread.

I would be interested in some of our resident "experts" on this stuff but it seems to me that the take over by the federal government continues unabated and frankly it is being done quietly and sort of in a sneaky manner with the fine print all over the place.

This has to do with the insurance industry...

"President Barack Obama’s plan to create a U.S. insurance office after the $182.5 billion bailout of American International Group Inc. may take powers from the states that have overseen the industry for more than 135 years. "

"Obama called for the creation of a federal Office of National Insurance within the Treasury Department to monitor the industry, represent U.S. interests in international insurance agreements, and look for gaps in state oversight. The proposal was announced this week as part of Obama’s planned overhaul of the U.S. financial regulatory system."

http://www.bloomberg.com/apps/news?p...d=apCXAt_EyyMg

XXXXXXXXXXXXX I have to go eat now

The system of state regulation, or no regulation, of the insurance industry got us in the fix we're in now. I don't think President Obama is trying to disguise his proposal to regulate insurance companies with a federal approach. It certainly deviates from the beliefs of those that believe in strong state's rights and a weak central government. But the results of the past couple of years have proven that the states didn't do a very good job of regualting insurance companies and assuring their financial stability. Then, of course, there's the problem of the AIG subsidiary which created a huge part of the current financial mess by purposely choosing to operate out of Great Britain, where they wouldn't be subject to any regulation at all.

As the financial industry has become far more multinational, does it seem reasonable that one or more of our individual states should attempt to regulate these businesses? States which have widely different levels of skill devoted to the job, and similarly inconsistent regulations. The change in the industry has created a recipe for continued disaster unless some strong, central player assumes the regulatory function.

I don't think there's any hidden agenda here at all. Just a recognition of what needs to be done in a 21st century financial industry.

vk - I agree and I worked in the industry for over 40 years. They are big campaign contributors both to the state reps and federal so lets see what actually happens.

Originally Posted by conn8757

vk - I agree and I worked in the industry for over 40 years. They are big campaign contributors both to the state reps and federal so lets see what actually happens.

At the rate we are going, why bother to have states at all? The fed seems to be trying to take over everything under the guise that "everything is now interstate and international" and states are incompetent.

I would not be surprised to see a federally-supported initiative for states to merge for cost-effectiveness (the Dakotas are obvious, add Rhode Island to Connecticut, let NH merge with Maine, Idaho and Montana could be next, and so on). In time, they all merge until there is one. And then the President, the 545 in Congress, and the 9 SCOTUS justices run everything for the 300+ Million. Now, that's power! Even the old Politburo members would be impressed.

I believe that much of what OB is doing is totally outside the powers the Constitution grants or rather limits the federal government to do.

Not that others haven't crossed the line but OB is blatantly disregarding it totally and I hear barley a noise about it.

If the Constitution doesn't grant the power, it's goes to the Sates ala the 10th Amendment.

Last time I checked the USA has Presidents not Kings although that seems to be changing lately.

Doesn't this bother anyone? Doesn't anyone filter what he is doing based on the oath he took and what the laws of our land are?

Originally Posted by Villages Kahuna

The system of state regulation, or no regulation, of the insurance industry got us in the fix we're in now. I don't think President Obama is trying to disguise his proposal to regulate insurance companies with a federal approach. It certainly deviates from the beliefs of those that believe in strong state's rights and a weak central government. But the results of the past couple of years have proven that the states didn't do a very good job of regualting insurance companies and assuring their financial stability. Then, of course, there's the problem of the AIG subsidiary which created a huge part of the current financial mess by purposely choosing to operate out of Great Britain, where they wouldn't be subject to any regulation at all.

As the financial industry has become far more multinational, does it seem reasonable that one or more of our individual states should attempt to regulate these businesses? States which have widely different levels of skill devoted to the job, and similarly inconsistent regulations. The change in the industry has created a recipe for continued disaster unless some strong, central player assumes the regulatory function.

I don't think there's any hidden agenda here at all. Just a recognition of what needs to be done in a 21st century financial industry.

You seem to imply that the only answer to our problems is the Federal Government; if that is the case, then allow them to control everything as they surely have proven how well they handle things.

I do not believe that FEDERALIZATION is the answer at all to most problems, without any attempt at any other solution. Seems today if there is a problem, well let the federal government be in charge.

Homogeneous society. Opposite of individualism. In my humble opinion, there has been an effort to make everybody so equal as to lose all human identity.
Children are taught that there is no losers or winners.(children's baseball for example) All kids in school are thrown together (the talented and the dullards) and taught at a comfortable ( read:low) level. Incentive to excel has sometimes been discouraged.(everybody passes the grade)
Instead of celebrating the individuals special talents, we are encouraged to think that all people are interchangeable . Homogenize...bring the smart down and raise mediocrity.
The first President Bush actually had a phrase in his speech about "One world Power"

Start with the States. Melt them all together to take away their identity and have one federal power. Why stop there??? Why have the USA, Mexico and Canada??? Lets combine them and call it U-Mex-ada.
After 20 years or so we can then extend it to melting all Nations and have one single Ruler of the Earth. All advancement must stop. Converge all the military into one. (United Nations) Cease all space exploration as it will take all available funds to feed everybody. No more American farmers supporting the world...no incentive to excel.
Whewwwwwwww Rant Over.... Thanks for reading about the nightmare I had last nite.....Back to reality...I have a softball game today...hope it doesn't end in a tie score.......

Originally Posted by Bucco

...I do not believe that FEDERALIZATION is the answer at all to most problems, without any attempt at any other solution....

Bucco, I don't disagree with you on your suggestion. But I think we're getting our politics tangled up with trying to understand what alternatives are available to prevent a recurrence of the financial crisis we're only now beginning to work our way out of. We shouldn't forget that the ineffectiveness of regulation and oversight of financial institutions, including insurance companies, has resulted in the loss of trillions of dollars of worth owned by individuals and companies. Avoiding a recurrence of that kind of problem is what needs to be addressed.

Limiting out discussion to the initial post--what needs to be done to regulate the insurance industry? You say that other solutions should be tried before we revert to federalization to resolve the problem, regulate the insurance companies. I'd certainly be willing to consider such alternatives...but what are they?

Large insurance companies purposely create individual state subsidiaries to write policies in individual states. The states have a wide range of regulations and regulator abilities to properly insure the financial stability of each of those "state subsidiaries". Their principal purpose is to assure that the state insurance subsidiary has the financial wherewithal to pay claims, presumably to residents of that state, when they are presented. Some insurance companies are incorporated in particular states, even though they do business nationally or even internationally, because a particular state has favorable regulations or weak regulatory oversight.

In addition to any regulatory powers of the individual states, a private company A.M. Best, provides "risk ratings" of insurance companies. Typically, risk ratings of the parent company are provided by both A.M. Best as well as the other national credit rating agencies like Standard & Poors or Moody's. Obviously, the credit ratings provided by all those "experts" were woefully lacking in the proper recognition of the financial stability of insurance companies like AIG and others effected by the recent financial crisis.

As evidenced by the events of the last year or so, this entire system of regulation and credit rating failed. This should lead one to believe that some change in regulation and a system of financial transparency is needed to prevent recurrences of what we saw happen to AIG as well as other financial institutions that in essence wrote "insurance policies" in the guise of financial derivatives--credit default swaps written by banks and investment banks are a good example of totally unregulated "insurance policies".

So, following on with your criticism of the proposed "federalization" of regulation of the insurance industry, I ask again--what other alternative is there? It seems unwise to me to have the federal government regulate banks, thrifts and other "bank-like" institutions, leaving the insurance companies which also act like banks in many ways, to be regulated by individual states. In the last couple of decades the financial services industry has changed dramatically and become a muti-national industry with real "fuzziness" in the types of products and risks assumed by companies in that industry.

Should we separate the regulation of insurance companies from that of other financial institutions? Should we continue to attempt to regulate the insurance industry using a system that dates back to the 1930's? In an industry that has become significantly amalgamated in recent years, would that present too great an opportunity for problems to "fall thru the cracks"?

Again I ask, if not federal regulation which integrates regulation of insurance companies into the oversight of other financial institutions--then what? What are the other solutions you suggest be considered?

I'm not expecting you or anyone else on this forum to be able to come up with a better alternative by themselves. But maybe someone else, an academic, a politician, a pundit...anyone, might have an alternative to more federal regualtion. If anyone can find real suggestions--not just the "no, more federal regulation is no good"--please enlighten all of us here.