Wednesday, May 6, 2020

The Federal Government Regulate The Insurance Industry

Background The federal government’s role is in regulating industries is to protect consumers and the market. There is an ongoing debate on whether the federal government should regulate the insurance industry as a result of the bailouts stemming from the Financial Crisis of 2008. Currently, state governments regulate the insurance industry. Proponents of federal regulation reason that states are inefficient in the duty of insurance regulation. Additionally, the federal government has economies of scale and may offer an increase in efficiency unlike state regulation. The federal government regulates industries due to inherent systemic risk to the country’s economic environment. Systemic risk is the risk of collapse of an entire financial system or market. (SOURCE) For example, banking institutions such as Lehman Brothers, Merrell Lynch, and Goldman Sachs were major contributors to the financial crisis in 2008 because these institutions were systemically significant to th e market. The insurance industry and the core activities of the industry, however, were not a major contributor to near-collapse of the American economy. The federal government should not regulate the insurance industry because it does not possess a systemic risk to the market economy, states have the ability and resources to regulate, and federal regulation would result in unnecessary costs from the federal budget. The Insurance Industry and Systemic Risk The first initial component to what constitutesShow MoreRelatedThe State Run Regulatory System942 Words   |  4 PagesThe Insurance industry is very heavily state regulated. According to the Government Accountability Office (GAO) study, the state run regulatory system is Federal verses State Regulation protecting the markets, insurance industry and policy holders and was evidenced during the financial crisis of 2008-09. The insurance business is highly profitable. â€Å"Well-run companies can make a lot of money, which breeds competition† from both â€Å"inside and outside competitors† (Property, 2013). Insurance companiesRead MoreThe Pharmaceutical Industry1566 Words   |  7 PagesAlong with saving lives and helping people live an ordinary life in comfort, the pharmaceutical industry makes billions of dollars every year; money that is invested in research/development as well as lining the pockets of shareholders. However, i n the past two years the system has been abused by those hoping to make a hefty profit from buying or acquiring a drug and then raising the price ten or twenty-fold, often with the simple reason of greed or matching what other companies do (Johnson). OccasionallyRead MoreInstallment Loans : Let The States Decide Essay964 Words   |  4 Pagesfrom their next paychecks despite industry warnings against the practice. This often leads some people to become trapped in a cycle of debt, which is a primary reason that industry critics give for opposing payday, auto title and short-term loans. Many of these payday lenders now offer installment loans to satisfy critics, consumer demand and losses of interest income due to payday lending restrictions. However, controversy continues to grow about whether federal regulators should have an expandedRead MoreUniversal Health Care At The United States1458 Words   |  6 PagesMedicaid into law during the early 1960s (Andrew and Walter, PBS). Anot her milestone of universal health care is when President Obama passed and signed the â€Å"The Affordable Care Act† in 2010, which opened a Federal healthcare marketplace and the requirement for all American to have a health care insurance (Andrew and Walter). However, the cost of health care dramatically increased. The Affordable Care Act (ACA) is not a good policy as health care cost is too high and many American are still uninsured. Read MoreGreat Depression and New Deal Study Guide1119 Words   |  5 Pagesbenefits for victims of industrial accidents, unemployment insurance, and air for defendant mothers and children, the blind and physically disabled. | Fair Labor Standards Act- This banned child labor and set a minimum wage. This law was a long awaited triumph for the progressive-era social reformers. | National Labor Relations Act (Wagner act) - Reestablished the NIRA provision of collective bargaining. The federal government again protected the right of workers to join unions and engageRead MoreThe Issue Of Universal Health Care1705 Words   |  7 PagesMedicaid into law during the early 1960s (Andrew and Walter, PBS). Another milestone of universal health care is when President Obama passed and signed the â€Å"The Affordable Care Act† in 2010, which opened a Federal healthcare marketplace and the requirement for all Americans to have health care insurance (Andrew and Walter). However, the cost of health care dramatically increased since the Affordable Care Act was signed. The Affordable Care Act (ACA) is not a good policy as health care cost is too highRead MoreObamacare And Affordable Care Act1728 Words   |  7 Pageshard working citizens and the God-given freedoms we possess. America has contributed countless scientific and medical discoveries and accomplished feat s deemed impossible by others. The wealth and progress in this country was not brought about by government intervention and supervision, but from individuals who had the freedom to do what they did best. Because of this freedom, America’s healthcare is currently unmatched anywhere in the world. Though other countries may tout free healthcare, they makeRead MoreThe Constitutionality Of The Affordable Care Act2997 Words   |  12 Pageson insurance coverage in the United States. According to Webster’s Dictionary, â€Å"insurance is a practice or arrangement by which a company or government agency provides a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a premium.† The statutory power to regulate the business of insurance comes from a 1945 ruling by the U.S. Supreme Court that prompts Congress to enact the McCarron-Ferguson Law giving individual states the power to regulate theRead MoreAnalysis Of The Health Care Industry1088 Words   |  5 PagesThe health care industry has the highest percentage of occupational hazards of any workforce industry (SIC division structure, 2015). To control these numbers, several state and federal agencies were established to regulate risks to health and personal safety. (OSHA) is one such agency was established to cover all workforce industries, including health services and insurance. The regulatory authority of OSHA is ranged to cover many types of occupational hazards and hazard communication. OSHA proceduresRead MoreWilson vs. Roosevelt: the Better Progressive President? Essay747 Words   |  3 Pageseconomic competition and permit small businesses once again to flourish. While the federal government was to use its power on a one-time basis to bust all trusts, the federal government was to have no role in regulating business. Any regulation would have to be done by state governments. This contrasted markedly with Roosevelts New Nationalism, which called for an even stronger role for the president and the federal government in regulating the economy and curbing the abuses of corporate power. New Freedom

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.