Implementing Car Insurance Reforms

Your editorial on the insurance industry must have been written by one of your writers who never took a course in economics. If the insurance companies were making too much money, why have insurance stocks been the biggest laggards in the bull stock market?

Public utilities are regulated because they have a monopoly position; I have to buy gas, electricity, and telephone service from the company that serves my area. We can’t have 10 competing systems of wires attached to our poles.

But insurance is competitive. I can shop to my heart’s content, and companies will be most competitive if allowed to calculate rates based on whatever criteria they chose. If they can’t make money in a given area, they should be allowed to leave. That’s how capitalism works.

As you say, the rules may change, but the laws of economics don’t; your editorial writers haven’t learned that lesson.

ALLAN MacDOUGALL

Los Angeles