I very much enjoyed your column headlined "Toasting the Quiet Players" (Risk & Insurance® January 2005, page 11.) I occasionally speak to classes of juniors and seniors at the University of South Carolina's Moore School of Business, in the Insurance and Risk Management Department. The professors ask us to give our perspectives on the real-world experience of actually building a career in insurance, as well as challenges we face today. I think your perspective and comments would add greatly to my own personal reflections on the subject and be a benefit to the students, as well as give them some much-needed humor.
Karen N. Basso
Senior vice president
Your column headlined "More Regulation Be Damned" (Risk & Insurance® December 2004, page 12), plucked at my capitalistic heart. It also piqued my interest in a trend we have been noticing here in Florida. The Department of Financial Services has been assuming more and more risk since Hurricane Andrew in 1992.
The creation of the Florida Catastrophe Fund began this trend by acting as a reinsurer for insurance companies. But it has now been dipped into to pay the insureds back for the deductibles charged due to Charley, Frances, and Ivan passing through. Florida has also created a mediation program that helps keep the attorneys out of the game.
I have heard rumors that the California Dept. of Insurance and the Florida Dept. of Financial Services are working together to try and create a national catastrophe fund which would spread their risks among a larger pool. I fear a national catastrophe fund, however, would be unfair as it would tax states with less exposure to risk.
Property claims adjuster
I feel compelled to express to you my appreciation for your column headlined "A Cure for the Fraud Virus" (Risk & Insurance® January 2005, page 10).
I have been a multistate workers' compensation administrator for many years. Those who know me can easily quote that I have been echoing your sentiments for at least that long. I could easily state who the doctor groups are by name that are knowingly abusing a system that was designed with good intent.
This only proves that the root of all workers' comp evil is greed. I do not believe that these abusive overtreaters realize the net effect on society as whole when they bleed employers out of business.
I have been asked by many of the Fortune 500 companies that I have administered claims for as a self-insurance administrator, "How can we manage risk in a state like California, where literally 33 percent of every risk dollar we spend is in that one state alone?"
My answer, while not very popular, has proven effective. It is this: Don't take on the risk. Relocate your business to a more employer-friendly state, do away with unionized employees, offer excellent benefits, and enforce the use of the contributory benefits--HMOs, long- and short-term disability. Sadly, this has cost in excess of 20,000 jobs that I know of here in California. Yet, I would still give the same advice.
Ronald M. LoBue
Sr. claims consultant
April 1, 2005
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