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FORTUNE INSURANCE FORUM I MCMLXXXIX
There has never been a time in recent history when the insurance industry has been under attack by so many diverse interests. Certainly plaintiffs' attorneys and consumer advocates have been engaged in "insurance bashing" on and off for years. But, more recently they have been joined by Attorneys General from several states (who have filed suit against the industry alleging antitrust violations), the Small Business Legislative Council (which recently came out in support of repeal or amendment of McCarran Ferguson) and voters in California (who passed Proposition 103, which called for, among other things, a 20% across-the-board rate rollback, elimination of territorial rating and election rather than appointment of the insurance commissioner).
Not surprisingly, the number one concern voiced by all participants at the FORTUNE Forum was the lack of consumer confidence in the insurance industry. At the same time, participants admitted that restoration of this confidence would be difficult to achieve and would take a long period of time, during which it will be imperative that insurance rates remain relatively stable and coverage remain available.
It was agreed that much of the problem stemmed from a misunderstanding by the public of the insurance process. The insurance industry has begun to revise the thrust of both its advertising and public relations efforts to focus on education of the public. This may prove to be too little too late to stem the ever-growing anti-insurance sentiment.
The arguments on both sides have been repeated in many places, not the least of which was in the California media prior to the vote for Proposition 103. The fact that the insurance industry-supported measure, a true no-fault proposal that would have resulted in long-term savings to the public, received only 26% of the popular vote is a good indication of how much work needs to be done by the insurance …