Replying to a message of Richard Webb to Bob Klahn:

 RW>> THat's their problem.  THey still get to make up the
 RW>> shortfall.  OUt of their personal fortunes if nothing else.

Lloyd's of London works that way.  Many if not most of the 'names' there
make a lot of money from premiums - but it is a requirement that they
have *unlimited* personal liability for losses.

 BK>>  I can't seem to find a problem with that.

 RW> I can't either, it happens to the rest of us.  NOw I can
 RW> understand an insurance underwriter that gets bit hard by
 RW> hurricanes, etc.  even then, one should diversify, or be
 RW> careful what they underwrite.

Actually many if not most insurance companies buy reinsurance - IOW
insurance on the policies they've written - to soften the blow of losses.
One of the biggest reinsurance companies is General Re, which is now
a division of Warren Buffet's Berkshire Hathaway conglomerate (along
with GEICO and a host of other insurance companies - Buffett built his
conglomerate with the 'float' on insurance).  Berkshire's companies -
including General Re - took a severe hit with Katrina, and they've taken
some others in the past few years.

 RW>  Until state insurance
 RW> regulators got into the act many of them would charge me
 RW> more for insurance by virtue of the fact that I"m literally
 RW> a braille reading white cane carrying blind man.  NO
 RW> actuarial statistics can be pointed to which say I"m a
 RW> greater risk while just going about daily life, but they
 RW> could either refuse me altogether or charge me a higher
 RW> premium.  YEs, I understand the industry, used to sell
 RW> accident health and life insurance in a former life .
 RW> wHenever it serves the carrier they can always trot out such lofty
 RW> phrases as "feduciary responsibility" etc.  BUt, it doesn't look to
 RW> me as if AIG used any of that.

Insurance companies have always used actuaries to determine the degree
of risk posed by a particular insurance product and the risk(s) posed by
categories/groups of (potential and actual) policyholders.  They use that
risk assessment to decide whether or not to offer a particular product and
also to set premium rates for that product.

Insurance is not about anything other than assigning a risk to someone else.
That's why health insurors don't (want to) cover pre-existing conditions;
because the risk is 100% and not the number calculated by the actuaries.
It's also why you can't get a new auto insurance policy to cover the accident
you had yesterday, or a new homeowner's policy for your house that burned
down last week.

Government regulators and many of the leftish political persuasion want to
change the whole concept of insurance from risk management to what is
basically welfare.

In the specific case of the caterwauling about universal health care; the
bottom line is that the people (supposedly) want the care provided but they
don't want to have to pay for it.  If the universal health care the politicos
want is ever enacted, in order for it to be actuarially sound the premiums
for it will have to be astronomical and most insurors if not all of them will
abandon that market.  Bet on it.  In point of fact *many* insurors have
already abandoned the health insurance market.

IMO if the government wants to provide health care for everybody, the government
should build, staff and equip the facilities to do so and not *force* private
entities to do it for them (at a loss).  There have for decades been tax-supported
public hospitals in this country, usually they're owned and run by a
'hospital authority'
that has the power to levy property taxes in its service area.  Douglas
County Hospital
in Omaha is one such (although it has no acute care capability and a very limited
ability to handle emergencies), Highland Hospital in Oakland, CA, is another.
Other taxpayer-supported hospitals are affiliated with state college and university
medical schools, the University of Nebraska Medical Center in Omaha is one of those,
as are the University of Iowa Hospitals and Clinics in Iowa City.

--- FleetStreet 1.19+