charlie@cca.UUCP (Charlie Kaufman) (07/15/83)
Combining two recent news items... Should it be legal to charge a man
higher life insurance premiums if his wife went to college? After all,
this is a matter of life-style (like smoking or sky-diving) which he has
chosen voluntarily and could give up if he chose, and there is some
evidence it shortens life expectancy.
--Charlie Kaufman
charlie@cca
...decvax!cca!charliecharlie@cca.UUCP (Charlie Kaufman) (07/30/83)
A recent posting defended sex-based insurance rates on the basis that
insurance companies are not discriminating; only trying to maximize
profits. I would like to respond on several levels.
1) Insurance companies do not set insurance rates. The employees on
insurance companies do (with "guidance" from government regulators).
The management of a corporation does not always act in the best interest
of the corporation. It is not obvious, for example, that companies pay
men more than women because it is profitable to do so. It could well be
argued that this occurs because of the perhaps well meaning but
certainly biased judgement of the *men* who run virtually all
corporations.
2) The majority of the pension money in question is controlled by mutual
insurance companies. The goal of a mutual insurance company is not to
maximize profits but to act in the best interests of its policyholders.
In practice, the goal of insurance company management is to expand the
company as rapidly as possible, thus increasing the power of controlling
management. This may or may not be in the best interests of
policyholders, but leads to the same sort of competitive behavior as
seen in stock companies.
3) It is the proper role of government to constrain private
organizations from acting in ways which maximize profits but which do
not maximize the public good. It may be that discrimination is very
profitable, but that we as a society judge its costs not to be worth its
benefits. The court ruling should be viewed as a piece of legislation
regulating the conduct of business passed for the alleged benefit of
women. The interesting issues are whether there will actually be any
benefit, whether the benefit exceeds the cost, and whether court rulings
are the proper mechanism for enacting such legislation.
--Charlie Kaufman
charlie@cca
...decvax!cca!charlie