Insurers reap profits as rates keep climbing

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SOCIALIST ACTION DECEMBER 1986 Restraining order In a move to block a national strike the National Railway Labor Conference, a joint railroad owners bargaining association, has gone to federal court to obtain a restraining order. On Nov. 13, U.S. District Judge Charles Kocoras heard arguments in the case and announced he would rule on the restraining order within 30 days.

However, the unions may not wait for the judge's decision. Richard Kilroy, chairman of the Railway Labor Executive Association, a group that includes leaders of several rail unions, said Nov. 13 that a decision on whether to strike could come within a week.

If allowed to go unchallenged these moves have dangerous implications for every craft in the rail industry. BN and other railroads have already indicated plans to subcontract out benchwork, to use non-union third party firms to do track maintenance, and to use the sale of branch lines and entire terminals to replace operating crafts employees.

In addition, the Railroad Retirement System that many rail workers have contributed to for up to as much as 30 years will be faced with bankruptcy and extinction.

In a broader management A biweekly magazine published under the auspices of the Fourth International. We offer a special introductory offer of three issues for $3. A six-month subscription is $22, and one year of International Viewpoint is available for $42.

Write to 3435 Army St., Rm. 308, For many months, the papers were full of bad news about the insurance industry. The news stories reported that profits had declined-the companies lost money insuring people. Naturally, the insurance companies had to raise their rates to insure the more risky applicants.

Now comes the good news. The Nov. 2 San Francisco Examiner proclaimed it in bold headlines: "Insurers pulling out of a 2year slide." "Big price boosts help make 1986 profitable." "Insurance industry on the mend."

After-tax profit soared to $5.7 billion, highest since 1982. Stocks of average insurance companies rose 50 percent in the past year. They are expected to rise another 100 percent by the end of this decade.

So is the great insurance crisis over? Can car owners and small businessmen now get insurance at reasonable rates? "No such hope," say insurance experts.

According to the Examiner article, "The industry's resurgence does not mean that liability insurance policies will be easier to find any time soon. Moreover, they agree that insurance is likely to get more expensive, not cheaper, for months and perhaps years to come."

This is after increases of 81 percent in professional liability insurance rates and 120 percent in other liability insurance over the past 18 months.

Voters in California and Florida were promised lower rates if they voted for limitations on victims' right to sue for damages. These laws are now on the books.

But the insurance companies will not lower their rates. Aetna Life and Casualty reported that the Florida limitation would reduce its costs only four tenths of 1 percent.

Other restrictions on the right to sue would have no effect at all, Aetna said. So its attempt to blame high rates on greedy litigants is proven to be a gigantic scam.

The insurance industry says it charged too little three years ago, and now we have to pay more for the bargain we got then. This is like a store saying, "We put a lot of items on sale last week, so now we will have to charge you double to make up for it."

Insurance companies can set their rates at almost any level they wish because they are exempted from anti-trust laws that bar price fixing. By continuing the squeeze on the public, the industry is putting pressure on legislatures to pass laws limiting accident victims' ability to collect adequate compen -sation.

So there is no relief in sight for the longsuffering premium payers. Many are fighting back. There are demands that the insurance industry be put under anti-trust laws, that no restrictions be put on the right to sue, that state insurance com -missions serve the interests of the consumers instead of the insurance industry.

The improved financial situation of the insurance executives only makes them more arrogant and greedy. It will take redoubled effort to put them on a leash.

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