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Maybe the wrong question? Legislation could fix this, making state-backed guarantees available only if insurance company is a stand-alone corporation, or some variation thereof. The guarantee is valuable socially. It's the untoward use of it as a financial refuge that isn't.

the guarantee is essential. that’s not the issue. the issue is what role private investors serve given the necessity of the guarantee. they do not, cannot, bear the downside risk. why should they skim from the upside before any downside materializes? 1/

it doesn’t matter whether they are a standalone company or not (although obviously becoming a capital source for private equity is particularly abusive). the risk is borne either by the state or by policyholders if the state absented itself. 2/

12/8/26, 11:42 am0 reposts5 likes

Unreconstructed Curmudgeon

you could have regulators insist on safe portfolios, but then what’s the advantage in having regulators make investment decisions indirectly vs a state-owned corporation making those decisions itself? /fin

@ems1944.bsky.social

It’s worked well in NY. Many insurance companies avoid ny because of regulation. Also, government has enough on its plate already. Insurance is a choice, not a part of the commons. Making it part of the government won’t inure it to corruption.

Unreconstructed Curmudgeon

it’s a question, not advocacy, but i think it worth thinking about where we want the boundaries to be and why. i don’t think “enough on its plate” is an answer, the public sector like the private can scale, different ways have different problems. 1/

@ems1944.bsky.social

1) No, not right now The immensities confronting government now, whether Federal or state, don't leave room for much beyond a steadfast restructuring, none of which involve insurance other than health insurance. There's no Federal government any more, at least in the way