OpEd by Mike Stenhouse
Will Rhode Island’s insurance Superintendent prevent retirees from being the next victim of government’s assault on families? The Covid lockdowns, rampant spending, oppressive regulations, and misguided green energy mandates have eliminated jobs, destroyed our education system, and led to hyper local inflation. Let’s hope the retirement security of Ocean Staters is not next to be attacked.
Given our state’s volatile economy, sound retirement planning is more crucial than ever. Yet, a recent study revealed that Rhode Island ranked in the bottom-3, nationally, when it comes to access to employer-based retirement plans. It was also recently reported that Rhode Island is the most expensive state in the nation for families needing life insurance.
And, it could quickly get worse because of the lobbying efforts of a coalition of “Big Insurance” corporations. They are backing a proposed new rule by the Biden Administration that will impose a near 50 percent “capital charge” tax that will negatively impact smaller life insurance companies. This steep new cost for doing business will drive many smaller insurers out of business and will raise the cost of life insurance for Rhode Island’s working families. The tragedy is that the National Association of Insurance Commissioners, which recommends regulations for the insurance industry, is standing with Big Insurance on this issue.
The dirty game of corporate cronyism involves giant companies who create, push, and support burdensome regulations for their smaller competitors. Under the guise of protecting consumers, Washington and Providence politicians and bureaucrats usually end up doing their bidding. The life insurance industry is no exception.
Last April, the largest publicly-traded insurance companies in the world (MetLife, Equitable, New York Life, Northwestern Mutual, and others) petitioned the NAIC to support the proposed new capital charges, which would destroy many of their smaller, privately-held competitors. The NAIC working group approved the big insurance companies’ requests almost immediately by voice vote. Should it come as any surprise that many NAIC staff members come directly from the trenches of big insurance giants?
In short, the NAIC has targeted 2024 for full adoption of the new rules that target one class of insurers for the benefit of others – the crony insiders.
This situation reveals a troubling pattern where regulations, ostensibly designed to safeguard the public, are co-opted and manipulated to serve the interests of the powerful few. Such actions jeopardize the principles of free and fair markets, damage the reputation of our institutions, and ultimately harm consumers who face fewer choices and likely higher prices.
So what happens now? Inflation and over-regulation is already hurting Rhode Island’s consumers, and there is little doubt that they will be paying more for life insurance unless near-term action is taken.
The good news is that Beth Dwyer, Rhode Island’s Insurance Commissioner, was recently appointed to the NAIC’s Financial Stability Oversight Council. As a consumer advocate, Ms. Dwyer should recognize how this proposal will limit competition. She has the authority to ignore NAIC’s recommendation; and she should do so.
Americans and Ocean Staters are not blind to the crony corporatism that has become so prevalent in Washington and here in Providence. A recent poll by respected Pew Research found that 73 percent of voters believe lobbyists and corporate insiders influence our system too much.
It’s now up to Rhode Island insurance Superintendent Beth Dwyer to put the interests of working families and retirees first … and reject the proposed rule that will make it easier for billion-dollar insurance companies to reduce their competition and increase prices on the rest of us.