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- What is a CEO?
- How can they make so much money?
- How do I find out how much the head of my
insurance company makes?
- But don't lawyers take most of the insurance
money?
-
But aren't there like a bazillion personal
injury lawsuits that are taking all of my insurance money?
- But it's a free country. And as good
Capitalists, they should make as much money as they can, right?
- Why are only a few people reported?
-
Why does the health insurance guy make so much more money?
- What can I do?
1. What is a CEO?
A CEO is the Chief Executive Officer of a corporation. In every
corporation, there are shareholders. The shareholders vote according to
how much stock they have. The votes of the shareholders elect a board of
Directors. After they have been elected, the Directors of the Board select
a CEO. The CEO then selects the President and Vice-Presidents of the
company to run it. The CEO represents the ownership of the corporation,
and the President manages the corporation. The CEO runs the company.
The president does what the CEO tells him to do or he will be fired.
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2. How can they make so much money?
In theory, the Board of Directors is a control over the CEO. In practice,
most Directors agree with everything the CEO wants. There are friends of
the CEO and professional yes-men. The CEO recommends Directors at the
yearly shareholders meeting and stock holders almost always elect those
Directors if the corporation is making a profit. The Directors then select
the CEO again. Directors are not directly paid in most of the
insurance corporations, but only do one thing anyway. Select their CEO
friend at the yearly shareholders meeting.
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3. How do I find out how much the head of my insurance company
makes?
Some information is available online with the Federal Security Exchange
Commission, follow the footnote on the homepage, but the amounts are
relatively low. This may be due to more lenient reporting standard than
the states. Check back here for the addresses and fax numbers of the
records custodians of the various state departments of insurance.
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4. But don't lawyers take most of the insurance money?
Only according to the insurance company executives and the political
organizations they fund. Insurance company executives have actually said
that lawyers got most of the money, and then immediately changed their
statements when placed under oath. "During that (2003 Florida legislative
session), medical and insurance industry representatives blamed high medical
malpractice insurance rates on frivolous lawsuits, but conceded once they were
under oath that there were few such frivolous suits."
Source ¶9
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6. But it's a free country. And
as good Capitalists, they should make as much money as they can, right?
But they are not Capitalists, they are socialists.
Remember the definition, "Socialism is
government direction of privately owned businesses."
Wiki
Insurance companies are socialist. Insurance
companies as "a creature of statute," are allowed to exist because they are supposed to provide a
state function, that of "spreading risk," thereby minimizing loss to an
unfortunate citizen so that the citizen can return to a productive position.
Because they provide a state function, insurance companies have special
advantages. For example, if you are able to negotiate a better deal on a car
than the salesman intended, good for you. But to do the same thing with an
insurance company is a crime.
Also, the government guarantees customers
(required insurance). An insurance company has many benefits awarded by
the state, and therefore there used to be under state oversight. That is no
longer the case. Politicians are heavily supported by insurance
companies. Requests for rates increases are usually rubber stamped
approved.Also, people frequently say "it's a free country," when they mean "it's a
free market economy." But insurance is not free market. Because of
the benefits like the criminal law benefits that insurance companies, that is,
they can put you in jail if you lie about a loss, but you can not put them in
jail if they lie to you, insurance companies have to ask for rate increase
approval. These increase used to have to be approved in states and were
rigorously questioned. That time has passed. Frequently, a
legislator who soft pedals an insurance company rate increase gets financial
support from insurance companies and their employees for their next election.
Coincidence? Some would say. But insurance is not part of the
"laissez fare," "hands off" concept of government. Insurance, only exists
with government oversight. With government oversight, it works to spread
risk. Without oversight, insurance becomes the a primary source of
constant financial drain on an economy.
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7. Why are only a few people
reported?
The Securities Exchange
Commission only requires the reporting of the top 6 most highly paid
executives. Nebraska requires the top 9. There could be thousands of insurance company executives who
make one dollar less than the 9th top paid guy,.
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8.
Why does the health insurance guy make so much more money?
Primarily because there is no legal control over health insurance companies was
outlawed in 1974. Because of the
ERISA law passed by congress, you are not allowed to sue a health insurance
company. With no lawyers looking over their shoulders, health insurance
costs skyrocketed while services declined. Fewer people have health
insurance than just 10 years ago, pay more for it, get less, and have huge
deductibles. Again, medical malpractice is just a small portion of the
payouts.
MedMal premiums not related to lawsuits. Doctors income has increased slightly, but generally in line with
inflation. Now you know the name of a guy who gets your health insurance
money.
9. What can I do?
Call email your state legislator and send a link to this site. Ask what
they are doing to control insurance companies, and request an independent audit
of your insurance company. Contact us at InsCEO to see how else you can
help.
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