Economic Implications of the Fair Insurance Practices Act

Highlights

In response to a congressional request, GAO reviewed the economic implications of the proposed Fair Insurance Practices Act. Specifically, GAO reviewed: (1) how cost considerations vary by type of insurance; and (2) the effect that unfunded liabilities in pension plans would have on the ability of pension plans to meet the minimum funding requirements of the Employee Retirement Income Security Act.

Recommendations

Matter for Congressional Consideration

Matter	Status	Comments
To reduce the adverse effects of potential insurance company insolvencies, to make compliance with the bill more feasible, and to reduce the administrative costs of implementing the bill, Congress should consider eliminating the bill's applicability to existing individual insurance contracts.	Closed – Not Implemented	Congress has decided not to take action on the bill revisions GAO recommended.
To reduce the adverse effects of potential insurance company insolvencies, to make compliance with the bill more feasible, and to reduce the administrative costs of implementing the bill, Congress should consider increasing the transition period for implementing the legislation to at least 1 year.	Closed – Not Implemented	Congress has decided not to take action on the bill revisions GAO recommended.

Full Report

Full Report (46 pages)

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Chuck Young

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Topics

Retirement Security

DiscriminationEconomic analysisFunds managementInsurance cost controlInsurance premiumsInsurance regulationLiability (legal)PaymentsPension plan cost controlSex discrimination