Insuring Your Future

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We
all hate insurance agents. They sell overpriced, misleadingly named
products (e.g., "Life" insurance); they pester us to buy
unentertaining things that will never benefit us personally (when
was the last time you saw someone enjoying their life insurance
policy?) And like most of today's "capitalist" industries,
insurance companies spend a lot of time lobbying state legislators
to drive out their competitors through regulation and price controls.
(Sometimes, as in Texas, they have overdone it and come close to
driving all auto insurance companies out entirely.)

However,
there is a good side to insurance companies. Once they have our
money, they don't want to give it back. This gives them the right
incentives; it makes their interests coincide with ours. Fire insurance
companies want to prevent fires, health insurance companies don't
want people to get sick, and life insurers don't want you to die.

The
National Board of Fire Underwriters (predecessor of today's American
Insurance Association) was founded in 1866 to study means of reducing
fire hazards; they helped push the installation of sprinkler systems
and other fires safety measures. In the late 19th century,
they founded Underwriter's Laboratory to test the safety of electrical
devices; in 2003, it tested over 100,000 items. In the 20th
Century, the Insurance Institute for Highway Safety was created
to encourage the construction of safer highways and safer cars.
UL and the IIHS operate in a voluntary fashion, by providing information
and approval ratings.

Insurance
companies can encourage safety in other ways without using force.
They can simply offer lower premiums for better-designed equipment,
or even for safer behavior. The lower premiums for nonsmokers and
the nonobese provide financial incentives for health.

So
insurance companies have actually done for over a century what government
agencies like OSHA, FDA, etc. only claim to do: make people safer.
The difference is that the insurance companies have the right incentives,
and none of the wrong ones.

Suppose
you are a low-paid FDA bureaucrat. You can improve your life by
taking bribes from one drug company to delay competitor's products;
you can make your life easy by just not approving anything. Or,
you can work long hours, trying to approve the right drugs in a
timely fashion… leading to the occasional inevitable mistakes and
career calamity. And no matter how many good drugs you approve,
you will still be a low-paid bureaucrat, despised by your wife,
in-laws, and cat. You can't do anything about the cat, but in a
private company setting your in-laws might eventually be forced
to respect your success.

An
Assurance Medical Association (AMA) funded by the life insurance
industry to review drugs would have the right incentives. They would
try to keep their life insurance clients alive and the premiums
coming. If they can do that by not approving drugs, fine; if they
can do it by approving them for sub-groups, or (eventually) individually
for each person, they will do that too. Individual workers might
be bribable, but not to the degree that FDA drones are captured
by the industry they "regulate"; and the AMA would have
every motive to use auditing, double-blind studies and cross-checking
to root out dishonest employees.

More
generally, the insurance industry is more suited to many jobs traditionally
done by government than is government itself. Government benefits
from calamity; the truism "War is the health of the State"
is one piece of a larger pattern. Any catastrophe creates a panicked
constituency for free help: crime, poverty, floods, fire, famine,
bad art, whatever. Anything bad is good for government.

Conversely,
insurance companies want people to be afraid, but they don't want
anything bad to actually happen. That is why insurance companies
are rarely caught funding and arming fanatic gangs of tornadoes
to ravage the Midwest, or encouraging anti-Western movements among
hurricanes.

Of
course you have to use the right kind of insurance company for the
right job. Using health insurance companies to review treatments
doesn't work… they don't want to approve anything that costs money.
Since that's what we're doing with HMOs, it's no wonder that the
system doesn't work… driving us ever closer to 100% socialized medicine.

And
now, a message from our sponsor: Solarpolitan Asteroid & Comet
Casualty and Life:

You
NEED Asteroid Insurance

Would
YOUR family be financially or molecularly secure today if
an Apollo-Amor asteroid destroyed all life on the North American
continent? No! And it's all because you haven't purchased Asteroid
Insurance from the friendly folks at Solarpolitan Life (our
motto: "Don't get hit by a piece of the Rock!"). Call
Today!

You
don't have asteroid
insurance
. You don't have war insurance, terrorism insurance,
plague insurance, or bad art insurance (you never know when you'll
be exposed to some new atrocity in front of a public building).
You pay three-quarters of your income in insurance premiums for
all these things, to… let's call them Union Static Assurance (USA).
But they don't protect your family. In fact, they actually attract
more risk, by using your premiums to fund war, terrorism, extra
costs and delays in the development of medical products, and bad
art.

So,
what you need is to transfer as much of your insurance business
away from USA as you can. Tell your insurance agent you don't want
any more "car insurance," or "property insurance"
with all those stupid exclusions. Tell her to get you some real
war, plague, terrorism, and asteroid & comet policies; then
you'll talk.

Insurance
companies have done some good work; saving some lives and thus keeping
some policyholders premiums. But the number of lives saved by UL
and IIHS are dwarfed by the numbers wiped out by the FDA alone,
let alone the rest of the worldwide government machineries. If the
insurance industry ever wants to make the really big bucks (by keeping
the ones it already has), it needs to found an Underwriter's Liberation
Movement: an institute that studies and popularizes the damage done
by government agencies. Let me suggest a slogan:

Insurers
Unite! You have nothing to lose but our claims!

April
19, 2005

Bill
Walker [send him mail]
works as a Research Associate in telomere biology at an undisclosed
(thanks to legal threats from his tax-financed employer) location.

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