1. The model is inherently corrupt: For Profit Insurance sells only one thing, a promise to pay claims. It is therefore in its interest not to pay claims. This is a major problem.

2. For Profit Insurance is regulated by state insurance commissions, typically made up of former insurance executives. This is a clear case of the fox guarding the henhouse.

3. For Profit Insurance spends huge amount of money on advertising and executive bonuses (remember AIG?). These make no contribution to paying claims.

The solution must encompass all of these problems.

1. Mutual insurance companies began the industry, until the executives subverted them and converted them into For Profit Corporations. We need to abolish all For Profit Insurance and convert all insurance companies to Mutual Insurance companies. A Mutual Insurance company is owned by the policyholders. This eliminates the conflict of interest in the first issue above. Clearly, it is against the interest of policyholders to refuse valid claims.

2. State insurance commissions need to be purged of all insurance professionals and be reconstituted from the ordinary public without ties to the industry.

3. Advertising and executive bonuses need to be regulated by the reformed insurance commissions to be reasonable. Some health insurance companies spend 30% of their incomes on advertising, and another 10% on bonuses. This leaves only 60% for paying claims. Insurance needs to be regulated so that 90% of income (at least) is used to pay claims (or as a reserve against future claims).

David F Mayer