Allstate CEO Draws the Ire of Insurance Regulator
April 21st, 2009 by Jeb Foster
Illinois insurance director Michael T. McRaith takes Allstate’s Tom Wilson to task in today’s Insurance Journal (”We’re in Good Hands With State Regulators“).
Writing in response to Wilson’s recent op-ed in the Times, McRaith minces no words: “the myth-laden pleas of an otherwise prudent Tom Wilson, CEO of Allstate, in search of federal regulatory relief should be viewed cynically.”
Apparently I wasn’t the only one who thought Wilson’s rationale for ditching state-based insurance was disingenuous. Here’s a recap: earlier this week, Wilson argued that the current chaos in the financial markets (which is largely the result of ineffectual federal oversight) is evidence that we need to ditch state-based insurance regulation and replace it with–get ready for it–federal oversight.
Such a move would constitute a de facto deregulation of insurance markets, says McRaith.
By remaining local, state insurance regulation evolves without caving to the whimsical profit fantasies that drove AIG and others to taxpayer support. Federal bailouts and loans painfully reveal the costly outcome of failing to put consumers first. Mr. Wilson’s industry deregulation ideal is not viable.
McRaith’s best case for state regulation lies in the fact that the only parts of the AIG behemoth that have managed to stay afloat throughout this crisis–the 71 US-based insurers–are the ones that were under the watchful gaze of state regulators.
Tags: Allstate
