1979 1011 and 1022 - GOV (House) - Small Business Problems with Insurance - Part 1 - John LaFalce (D-NY)

  • 1979 1011 and 1022 - GOV (House) - Small Business Problems with Insurance - Part 1,  John LaFalce (D-NY)  ---  [BonkNote]
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      • FTC Life Insurance Survey
      • Economatic
    • House - Committee on Small Business - Subcommittee on General Oversight and Minority Enterprise
  • John LaFalce (D-NY) - During the course of our product liability travails, we ascertained that there were very few people within the Federal Government with an understanding of the insurance industry. This lack of knowledgeability is illustrated by an article appearing this past Monday in the Wall Street Journal which recounted how the Department of Justice lost a taxation case involving a life insurance company in the U.S. Supreme Court as a result of its misunderstanding of the functioning of life insurance companies.
    • A staff memo, which referred to the decision as " demonstrably incorrect" stated:
      • "It appears that for many years the workings of the life insurance business have been misunderstood by those at the [Internal Revenue Service and Justice Department] associated with the question."
    • This past Tuesday, the Government Accounting Office released a survey it undertook of the functionings of the various State insurance regulatory bodies. That study raised serious questions as to the efficacy of State regulation as it is currently conducted. And I note parenthetically that the GAO report will be the subject of a hearing before this subcommittee on October 22. 
  • Given the veil of ignorance shrouding the business of insurance, this subcommittee believes that it is imperative to ascertain whether small businesses are being treated fairly in the insurance marketplace. To this end, we are attempting at this hearing to ascertain the types of problems that small businesses may be encountering.
  • We have with us this morning several witnesses who, hopefully, will be able to provide us some indication as to where the subcommittee should direct its future efforts.