THE INSURANCE INDUSTRY is showing signs of being its own worst enemy.

How can an industry that spends millions on advertising and contributes heavily to state and federal campaigns to reform tort law not recognize the public relations debacle associated with telling a state, which reformed its tort law, that the reforms are worth zero in the pricing of insurance products?Essentially this is what Aetna Casualty and Surety Co. and St. Paul Fire and Marine Insurance Co. did in their recent filings in Florida.

The American Insurance Association comes closest to explaining insurer reluctance to project savings in Florida by noting that the tort reform law is being challenged in court, both by insurers who do not like insurance reform features and trial lawyers who object to tort reform.

If the Florida Supreme Court overturns the law, insurers would be left with lower rate filings and no liability law reform.

But projecting no savings from the actions of the state legislature plays into the hands of trial lawyers and others who have maintained that the insurance industry is interested in abrogating the rights of citizens to sue, even though changing liability law will not affect insurance prices.

It is no surprise that the filings by these two companies were made public by J. Robert Hunter of the National Insurance Consumer Organization and Ralph Nader, two of the trial lawyers' staunchest supporters in their fight against liability law reform.

So now we have the public spectacle of Aetna and St. Paul saying that limiting non-economic damages to $450,000 will produce no savings. Likewise, reducing the monetary incentive for lawyers to take punitive-damage cases will have no effect.

Limiting joint and several liability to economic damages alone will have no effect either, the two companies told the state insurance commission.

Elizabeth Krupnick, a spokesman for Aetna, responded that Florida's tort law changes were more diluted than those in some other states, and she suggested that savings from tort law reform are only as good as the law that is passed.

But this is the voice of a corporate spoiled child. If the legislature does not give insurers the entire pie they will pretend they have not been offered a hefty slice.

We expect insurance companies to be risk adverse (not affected by risk) but still to size up risks and determine whether they are a good gamble.

Just for public relations alone you would think these two companies would have projected at least modest savings.

With many consumers and businessmen convinced that Ralph Nader is right and liability insurance availability and price are being manipulated for insurer ends, why would major industry players provide ammunition to critics demanding that Congress and the state legislatures move to further regulate the industry?

This is generally called shooting yourself in the foot. In the case of the insurance industry the wound may be more serious.

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