The Political Economy of Regulation: The Case of Insurance

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SUNY Press, Jan 1, 1988 - Political Science - 230 pages
This is the first comprehensive study of the history, politics, and economics of the insurance industry in the United States. It is designed as a theoretical challenge to the conventional wisdom in political economy which says that regulation benefits the regulated. In fact, Meier shows that because the insurance industry is far too divided to impose its will on the regulatory system, the political economy of regulation is actually the product of a complex interaction of industry interests, consumer groups, insurance regulations, and political elites.

Using both historical and quantitative approaches, the author examines a variety of insurance issues including the development of insurance regulation; the impact of regulation on the availability and price of insurance; the stringency of state regulation; and the product liability insurance crisis of 1985-86. The book concludes with a series of recommendations for reforming the regulation of insurance.
 

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Contents

The Insurance Industry
1
The Property and Casualty Industries
7
Summary
17
A Theory of Government Regulation
18
Political Theories of Regulation
27
Summary
32
Federal and State Government Roles in Insurance Regulation
33
Direct Federal Regulation of Insurance
35
Federal Issues in Insurance Policy
109
MailOrder Insurance
110
The Federal Flood Insurance Program
114
NoFault Automobile Insurance
118
The Unisex Issue
122
Federal Taxes
126
A Theoretical Recapitulation
134
An Empirical Examination of State Insurance Regulation
137

Federal Government Insurance Programs
36
State Regulation of Insurance
43
Summary
48
State Regulation of Insurance From Free Markets to Cartels to Free Markets Early Regulation of Insurance
49
The Beginning
57
Regulating Investment Decisions
61
Property and Casualty Insurance The SouthEastem Underwriters Case
64
The McCarranFerguson Act
67
The Growth of Competition
77
A Theoretical Recapitulation
84
The Liability Insurance Crisis of 19851986
88
Causes of the Crisis
90
Industry Internal Responses to the Crisis
93
External Demands on the Political System
95
The Opposing Coalition
96
Actions of Public Officials
98
Actions of Policyholders
99
Politics at the Federal Level
100
The Results of the Tor t Reform Effort
101
Cash Flow During the Liability Crisis
102
A Theoretical Recapitulation
107
Industry
138
Potential Consumer Groups
139
Bureaucratic Resources
140
Political Elites
141
Regulatory Stringency
143
Taxing Insurance Companies
147
Regulating Insurance Prices
150
The Impact of Regulation on Price
156
Litigation and the Price of Insurance
158
NoFault Automobile Insurance
159
Other State Restrictions on Automobile Insurance
162
The Impact of Price on Availability
163
Access to Insurance
164
Conclusion
166
The Political Economy of Insurance Regulation
167
Policy Recommendations
171
Conclusion
178
Notes
179
Bibliography
201
Index
221
Copyright

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Page 219 - 1978. Discrimination Against Minorities and Women in Pensions and Health, Life and Disability Insurance. Washington:

About the author (1988)

Kenneth J. Meier is Professor of Political Science and Public Affairs at the University of Wisconsin, Madison.

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