Insurance Industry

First of three parts Tiffany Lee wanted a car. She was weary of the two-hour bus ride to her job at a UCLA Health System clinic. She hated having to ask friends to drive her 7-year-old son to his asthma treatments. But as a single mother with three children, bad credit and a $27,000-a-year salary, she couldn't find a bank or dealership willing to give her a loan. Then a friend steered her to Repossess Auto Sales in Hawthorne. Another buyer might have balked at the deal she was offered.

California officials, setting their sights on life insurance companies, want to know whether executives are boosting profits by delaying or failing to pay death benefits quickly enough to heirs or to search aggressively for the beneficiaries. Unpaid life insurance benefits nationwide exceed $1 billion, according to the National Assn. of Insurance Commissioners. It's not known how much of that involves California policies. "I am concerned that the insurance industry is not holding up its end of the sacred bargain it stuck with its clients when it issued life insurance policies in the first place," state Controller John Chiang said at a hearing Monday.

Gov. Arnold Schwarzenegger's plan to raise $1 billion by selling part of the state's scandal-plagued workers' compensation insurance company is running into strong flak from small-business advocates, the insurance industry and the state's elected insurance commissioner. The governor wants to help reduce a $24-billion budget deficit by giving private insurers a chance to buy about half of customers' policies at the government-controlled State Compensation Insurance Fund.

The House Energy and Commerce Committee provided more ammunition to supporters of comprehensive healthcare reform last week, issuing a startling report about the market for individual insurance policies. The report found that the four top for-profit health insurers in the U.S. denied coverage to 1 of every 7 applicants from 2007 to 2009 based on their medical histories. This selectivity, which was intended to reduce the companies' costs and protect profit margins, makes sense from a business perspective.

Munich Re, trying to gauge insurers' potential exposure to risks after the Sept. 11 terrorist attacks, said a meteorite crash on Earth could lead to bigger-than-expected costs for the industry. "The effects of a 'bombardment from space' are to be carried by the insurance industry to a larger degree than has hitherto been assumed," Munich Re said. "This is because meteorite crashes will probably lead to explosions and fires which are covered in many insurance contracts nowadays."

A major source of health insurance for people who work for themselves is disappearing, casting thousands of contractors, freelancers and solo practitioners into the ranks of the uninsured with little hope of obtaining new coverage. Health plans offered by professional associations were once havens for millions of people who couldn't get coverage anywhere else.

One of the nation's biggest life insurance companies agreed to pay $206 million to settle allegations it overcharged millions of mostly poor, black customers for burial insurance because of their race. American General Life & Accident Insurance Co., based in Nashville, Tenn., settled after being hit with a federal class-action lawsuit and being threatened by sanctions from state insurance commissioners, mostly in the South.

As the task of turning a tentative pact on workers' compensation reform into legislation continued over the weekend, a divisive question remained unanswered. How can lawmakers ensure that the savings generated by an overhaul of the system are passed on to business owners besieged by rising workers' comp insurance premiums?

California officials, setting their sights on life insurance companies, want to know whether executives are boosting profits by delaying or failing to pay death benefits quickly enough to heirs or to search aggressively for the beneficiaries. Unpaid life insurance benefits nationwide exceed $1 billion, according to the National Assn. of Insurance Commissioners. It's not known how much of that involves California policies. "I am concerned that the insurance industry is not holding up its end of the sacred bargain it stuck with its clients when it issued life insurance policies in the first place," state Controller John Chiang said at a hearing Monday.

Re "New Law Aids Victims of Terrorism," Nov. 27: President Bush signed the terror insurance bill, saying that "should terrorists strike America again, we have a system in place to address financial losses and get our economy back on its feet as quickly as possible." This would ensure that insurance companies and real estate developers do not suffer overwhelming financial losses in a catastrophic terror event. Would that he sign a similar bill for the more than 40 million Americans who do not have health insurance, who may suffer overwhelming medical bills in a catastrophic event and who do not have a system in place to address their financial losses.

The insurance industry is pouring money into Republican campaign coffers in hopes of scaling back wide-ranging regulations in the new healthcare law but preserving the mandate that Americans buy coverage. Since January, the nation's five largest insurers and the industry's Washington-based lobbying arm have given three times more money to Republican lawmakers and political action committees than to Democratic politicians and organizations. That is a marked change from 2009, when the industry largely split its political donations between the parties, according to federal election filings.

It's a civics lesson Re "Judging the judiciary," Opinion, Aug. 13 It's about time that people like American Family Assn. President Tim Wildmon read the U.S. Constitution accurately. There are three branches of government, not two. The judiciary has as important a role to play as the executive and legislative branches. When the majority oversteps its bounds, the judiciary has to make decisions when asked whether a law is constitutional or not. It fulfills its role remarkably well when compared with the other two branches.

Health insurance giant Anthem Blue Cross of California announced the hiring of a former Aetna executive as its new president and general manager. Pam Kehaly, who has worked in the health insurance industry for more than 25 years, was named Monday to replace former President Leslie Margolin, who resigned a week ago. Kehaly will take the helm Aug. 30. Anthem, a unit of Indianapolis-based WellPoint Inc., is California's largest for-profit health...

Democrats and Republicans validly debate the size and reach of government. But certain services have always been considered fundamental. During California's pioneer days, rudimentary municipal services sprang up when communities of settlers agreed to chip in to provide common law enforcement, fire protection and, usually, basic public education. In the latest efforts to close the gaps in public budgets, though, an increasing number of California cities are ripping holes in the fabric of local government.

And now for the closing of the loopholes. Last month's enactment of healthcare reform, after more than a year of political cabaret, has led quite rightly to copious commentary proclaiming that this is not the end of the reform process but the beginning. Most commentators seem to think the rest of the process involves convincing the American public that Congress' medicine is good for them. I personally doubt that's the case; I'm confident that most people recognize instinctively that a law that places real limits on the health insurance industry's ability to play them for suckers is worth having.

Greener grass Re "Parents find it harder to ditch L.A. Unified," March 29 It is unfathomable that L.A. Unified has reached such depths that it needs to construct a Berlin Wall to prevent families within city limits from seeking educational opportunities elsewhere. Whose interests is it really taking to heart? This new policy will only increase disparities between the haves and have-nots, as those with resources are already in private schools or will flee there.

The insurance industry, stepping up its support for the no-fault auto insurance bill backed by Gov. Pete Wilson and the Consumers Union, plans to spend $1.2 million on advertising to increase pressure on four key state senators to vote for the measure at a legislative hearing scheduled for this month. "In a state as big and diverse as California, that's actually a very small amount," said Robert Gore, spokesman for the Assn. of California Insurance Companies, on Thursday.

I find it very disturbing that [Robert T.] Heineman (Letters, June 21) fails to mention that he is a Farmers' Insurance agent. However, his fatal flaw is the same as most of the insurance industry. He fails to mention over how many years the $3 billion in earthquake premiums were collected. Heineman is forthright in mentioning the industry has paid out $20 billion over 25 years. I have read many reports from insurance companies and the insurance industry which state they are losing money.

Giant health insurers could see revenue jump under Washington's new health overhaul that will require millions of additional customers to sign up for coverage in the coming years. But large insurers and Wall Street analysts say the prospect of a revenue bonanza may be tempered by the escalating costs of medical care and by provisions of new legislation that could eat into profits. The extent of the benefits to consumers is also unclear. The bill approved by the U.S. House on Sunday will require most Americans to buy insurance starting in 2014, with the federal government providing subsidies for many who can't afford new policies.

If there is one thing in the proposed congressional healthcare overhaul that sets Michael Cannon's libertarian teeth on edge, it's the requirement that all Americans get health insurance. "The federal government does not have the power to force you to purchase a private product," said Cannon, a health policy analyst at the Cato Institute, a free-market think tank in Washington. But with Congress poised to do just that, the mandate for near-universal coverage is generating opposition not only from libertarians like Cannon, who object to the guiding hand of government regulation in almost any form, but from some liberals -- and even from some members of the insurance industry, which stands to gain millions of customers.