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20 J. Ins. Regul. 1 (2001-2002)

handle is hein.journals/jloins20 and id is 1 raw text is: Editor's Perspective The insolvency crisis facing the insurance industry inspired great innovative and strong regulatory measures to restore confidence in the financial solidity of insurers. The post-insolvency era of in- surance regulation is the opposite, focusing on simplification and dismantling old forms of control. The very justification and policy rationale for why we regulate insurance is in dispute. The tools for regulation are rapidly shifting from paper to expert systems and automated processes. New financial tools, new market structures, and competition among financial services have strained old regula- tory paradigms. As we will see in this issue, approaches to protecting consumers are being reassessed. This issue of the Journalemphasizes this rethinking of the core values and tools of regulation. Speed to Market has become the mantra of reform minded critics of state regulation. Needless procedures and reviews slow the in- dustries' ability to launch new consumer products. They add that higher costs and product limitations hurt consumers. So far, the speed to market proponents have been gaining ground, especially by comparison with the pace of change a decade or more ago. During the P&C crisis of 1989, laws and regulations were piling up to con- strain what was perceived as ruinous competition. The legacy of rate and form reviews, built up over most of the 20th century, is falling away with the speed of technological innovation. The regulation of personal auto insurance rates is a major hold- out in a U.S. deregulation trend that started the late 1970s with dis- mantling airline, rail, and utility rate regulations. A hodgepodge of rate regulations exists across all lines of insurance. There is no con- sensus on which products should be regulated, for what objectives, or how the job should be done. For personal lines, the research to date has generally shown that proactive rate regulation does not seem to lower consumer costs of insurance relative to more relaxed regulation. This finding puzzles both the regulators and the regu- lated. A trio of eminent academic researchers, David CumminS, Richard Phillips and Sharon Tennyson, take a fresh look at the evi-