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There is a third option for insurance companies that used to be pretty common in the US, a mutual insurance company.  In this type of company, the policyholders held partial owner rights and input into management.  Many insurance companies de-mutualized in the 80s so they could grab more profits and pay higher salaries/bonuses.

posted 3 years, 9 months ago
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As I understand insurance, it's original purpose was to share risk so that any single large calamity would not destroy a company or person's finances not as an engine of profit. Shippers would band together and pool their money so if a ship was lost, the ship's owner(s) could continue in business.

Today, publicly traded insurance company's primary fiduciary responsibility is to it's shareholders so wouldn't it be not only immoral, but unethical and illegal, for an insurance company executive not to take actions denying as many claims as possible? Examples of such actions include paying bonuses for claims denials or policy rescission for any reason whenever and wherever profits may be adversely affected.  Insurance companies take these actions regardless of the consequences to the insured and even when illegal.

Further, just as an automobile insurance company will go after the driver that caused an accident for damages, why are insurance companies not attempting to get companies that create added health costs to pay for those added costs?

The problem we face today with medical insurance companies, as well as with pharmaceutical and other medical companies, is that they exist to provide profit to their shareholders, not to provide health services to their customers. Just as a pharmaceutical company will bury a safer and more efficacious drug in favor of a more profitable one, health insurance companies continue to accept premiums while having full time staffs of doctors, lawyers, and bureaucrats to ensure their ability to fight and decline payments regardless of the adverse affects on the claimant and her/his family.

posted 3 years, 9 months ago
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