As I mentioned in my last post, I currently work in the life insurance industry.  Today at work I was sent an article on Coventry First and life settlements (Here it is).  Coventry is an excellent company, I’d love to work there (Ihear their employees get a trip to the Bahamas every year!). The idea behind what they do is pure genius.  Alan Buerger, the CEO, is a real champion of the free market. As he explain in the article, they really created the secondary market for life insurance policies.  Life insurance is an asset, if 10 years from now you do not want it, you can sell it.  Before Coventry was around a policy owner only had one buyer, the insurance carrier.  The owner of the polcy had no neogotiating power!  Now that companies like Coventry exist, insurance policy owners who no longer want or need their policy can shop it out to several buys to get the best price.

The reason I decided to write a post on this article is not to thank Coventry for what they do for consumers, it is to point something Mr. Buerger says in his answer to question number 6.  I’m not sure if this is just a sign of where we are as a society or if Coventry has an alterior motive.  Here is the quote:

“…we had carriers that did not want this market regulated, which sounds, on its face, somewhat strange. But that is because they wanted to be able to say that life settlements are an unregulated market.”

Does the public really trust government so much that the largest player in an industry wants to be regulated by the government so that the public has confidence?  Does Mr. Buerger think regulation will help drive his business? He is a much smarter and way more successful man than I am, he is definitely doing something right, but I just don’t understand this.  If the client agrees to sell his policy to a third party, why should the government be involved?  Isn’t a fair price a price that is agreed upon by both parties?  Even if Coventry made $300k on a settlement (I’m just using a large number, I don’t know that they have) and the the client made $100k, isn’t that still fair because both sides are happy?

Is it possible that maybe he wants more regulation to create a barrier for competitors to stay out of the market? I don’t know the answer, but I do know that we assume individuals and companies act rationally and in their best interest.  I just don’t see how the government regulating another industry is good for either the consumer or the producer.  How could the public have confidence in the government, the same people who were given tips, but refused to investigate Bernie Madoff years before his ponzi scheme blew up?

God bless freedom, liberty, and personal property,

Slappy Jones II