Daily Bread for 9.19.22: Insurance is No Assurance

Good morning.

Monday in Whitewater will be partly sunny with high of 77. Sunrise is 6:39 AM and sunset 6:56 PM for 12h 16m 42s of daytime. The moon is a waning crescent with 35.3% of its visible disk illuminated.

 Whitewater’s Library Board meets at 6:30 PM

  On this day in 1796, George Washington’s Farewell Address is printed across America as an open letter to the public.

 In a nation of hundreds of millions, with a thriving press, a common person can find, as if by synchronicity, a story that means something both nationally and locally. Consider Kimberly Kindy’s reporting that Insurers force change on police departments long resistant to it (‘The high cost of settlements over police misconduct has led insurers to demand police departments overhaul tactics or forgo coverage’):

ST. ANN, Mo. — A patrol officer spotted a white minivan with an expired license plate, flipped on his lights and siren,and when the driver failed to stop, gave chase. The driver fled in rush-hour traffic at speeds of up to 90 mph, as other officers joined in the pursuit. Ten miles later, the van slammed into a green Toyota Camry, leaving its 55-year-old driver, Brent Cox, permanently disabled.

That 2017 police chase was at the time the latest in a long line of questionable vehicle pursuits by officers of the St. Ann Police Department. Eleven people had been injured in 19 crashes during high-speed pursuits over the two prior years.Social justice activists and reporters were scrutinizing the department, and Cox and others were suing.

Undeterred, St. Ann Police Chief Aaron Jimenez stood behind the high-octane pursuits and doubled down on the department’s decades-old motto: “St. Ann will chase you until the wheels fall off.”

Then, an otherwise silent stakeholder stepped in. The St. Louis Area Insurance Trust risk pool — which provided liability coverage to the city of St. Ann and the police department — threatened to cancel coverage if the department didn’t impose restrictions on its use of police chases. City officials shopped around for alternative coverage but soon learned that costs would nearly double if they did not agree to their insurer’s demands.

Jimenez’s attitude swiftly shifted: In 2019, 18 months after the chase that left Cox permanently disabled, the chief and his 48-member department agreed to ban high-speed pursuits for traffic infractions and minor, nonviolent crimes.

“I didn’t really have a choice,” Jimenez said in an interview. “If I didn’t do it, the insurance rates were going to go way up. I was going to have to lose 10 officers to pay for it.”

Where community activists, use-of-force victims and city officials have failed to persuade police departments to change dangerous and sometimes deadly policing practices, insurers are successfully dictating changes to tactics and policies, mostly at small to medium-size departments throughout the nation. 

Although Kindy is writing about policing (and Radley Balko wrote for the Post along similar lines in 2016), the influence of insurance companies extends to all parts of government that are under an insurance company’s contract.

There’s a good result when a private company restrains government (of any type, not simply police departments) from its own errors. If all other lawful means have failed, at least there is reform. Note well, the fount of this reform: a private free market of insurers deciding lawfully that government insurance premiums are to be set at a market price. Government is free to act, but private insurers have a right (and duty to their own shareholders) to price their insurance premiums to account for public employees’ risky conduct. Behavior comes at a market price, for police, fire, teachers, school administrators, or any other public employees.

And so, and so, should we feel better for insurance companies’ influence?

Only in part. Private insurers have a duty to their shareholders, and while they must properly price premiums for risky behavior, they need only concern themselves with informing the public when to do otherwise would violate the law. They can and must act to raise premiums for public employees’ expensive conduct, but they have no need to inform the public about policy changes.

On the contrary, from a private company’s perspective, too much open talk about policy changes may invite attention to other public mistakes and public misconduct that might mean bad publicity or lawsuits.

A private insurer has a right and duty to raise premiums for risky public behavior, but it has neither an obligation nor an incentive to publicize that risky behavior. It has an incentive to reform without public discussion or awareness of prior problems. (Outside legal counsel sometimes plays a similar role, although their ethical obligations are different, if sometimes ignored.) 

Insurers are not, so to speak, open-government advocates. That’s not their role and certainly not their duty. It’s the duty of public employees and public officials to preserve and advance open-government principles. 

In our community and others, one hears about municipal investigations, or cost savings to  our public-school tech ed program, with no public information about those investigations or the basis of those costs savings. 

A fix, without sharing information on the risks supposedly avoided, is an inadequate governmental response. Government’s obligation is to residents from whom its authority, limited and restrained under law, derives.

There’s so much talk — again and again — about how public employees are not merely working, but are instead serving, the public. A reminder: not telling, so to speak, is not serving the public. It’s self-service, and no more.  

This is, however, the situation in which many communities find themselves: reform comes, if at all, covertly through the insistence of private companies unwilling to discount the costs of public employees’ conduct. 

Insurance, however, is no assurance of open government. 

 Hurricane Fiona seen from space over Puerto Rico & Dominican Republic in time-lapse:

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