Posted On: April 20, 2009, 6:39 am CDT

Posted By: Stat Guy

"...After the regulatory failure with AIG's financial products unit in London, and the huge international financial ramifications, Congress is clearly looking to a federal agency to coordinate and oversee the insurance industry" I point out your comment EDGE because it is just that pairing of the condition with the "solution" that makes this whole thing impractical. First because it was not AIG's insurance section that is underwater, nor is it the insurance section that required bailing out. The "solution" is in search of a problem; what Congress should stay on is a review of the banking industry. But let me point out that it was the banking industry which lobbied, successfully, to have the restraint taken off that engendered the current disaster. At the same time, even if these consumer advocates could be convinced of a need to regulate insurance at the federal level, special interest groups will water down any proposal to accommodate all concerned: nothing good will come of that. This is how politics is done in the US, attempting to please all, we'll please no one but the banks who will avoid additional scrutiny by mudding the waters.