1980 0320 - GOV (Senate) - Cancer Insurance and the Elderly, Birch Bayh (D-IN)
- 1980 0320 - GOV (Senate) - Cancer Insurance and the Elderly, Birch Bayh (D-IN) --- [BonkNote]
- Senate - Subcommittee on Antitrust, Monopoly, and Business Rights conducted joint hearings with the House Select Committee on Aging
- (p32-) - Statement of Herbert Denenberg, Former Insurance Commissioner of Pennsylvania
- (p32-33) - I would summarize by saying cancer insurance is an expensive form of junk, gimmick, Mickey Mouse, limited coverage that gives little value for its premium ; that is inherently inefficient and uneconomical; that often contains tricky, deceptive and unfair provisions, loopholes and fine print : that has often been sold not by fact but by appeals to fear, superstition , and the irrational ; that has been frequently mis-represented in advertisements and sales presentations, and that is often sold to those that are least likely to need its limited protection .
- (p35) - When a product is sold irrationally, out of fear, not reason, people buy it who will never benefit from it.
- (p35) - We found our guides created an embarrassing glow of publicity that often forced high cost and Mickey Mouse companies to change their ways.
- (p36) - We can survive even if we are free to get information to the public and to freely discuss and criticize abuses and problems in the marketplace. The one thing that is intolerable is a stifling and muzzling of criticism and discussion.
- (p36) - American Family Life, of Columbus, Ga., has apparently decided that it has to end the criticism and discussion of its products. So it has virtually admitted it is going to try to silence the critics by filing libel and slander suits.
- Earlier this year I was sued by American Family Life Assurance Co. for $5 million for making this statement to a Changing Times reporter: "It makes no more sense to take out a cancer policy then it does to take out a leprosy or a chickenpox policy."
- Incidentally, I afterward told a reporter that that was the kindest thing I ever said about cancer insurance.
- I would say if that is libel, virtually everything insurance experts have said about cancer insurance is libel, everything you gentlemen have said in Congress about cancer insurance is libel, and everything in that great 200-page report is libel.
- In fact, my statement is quite mild compared to what other critics have said. Ralph Nader, for example, described cancer insurance as one of the biggest frauds in the insurance industry.
- My statement was mild, true, and not libelous.
- The suit filed against me was clearly frivolous. The intention of the suit was perhaps best suggested by the public statement of John P. Amos, chairman and chief executive officer of the American Family Life Assurance Co., at the time he filed another $275 million suit against ABC for a series it did on cancer insurance.
- Mr. Amos then said, according to the National Underwriter of January 19, 1980, "We are prepared to answer malicious stone throwers with cannon fire."
- When Mr. Amos sued me, he also sued Changing Times and other defendants and made this statement: Anyone who did not and does not now take American Family seriously is a fool and should be fully prepared legally to defend its position. Protecting the integrity, good name and reputation of our company and the equity of our policies from being further maligned must at all times receive top priority. These threats cannot go unanswered and they will not.
- (p36) - Mr. Amos is saying in effect anyone who criticizes American Family Life Assurance Co. has to be prepared to defend legally his position and to face " cannon fire. " Mr. Amos has apparently decided it is cheaper to file frivolous lawsuits and to attempt to silence critics than to defend cancer insurance in the marketplace of ideas.
- I think Mr. Amos knows that he can't defend cancer insurance in the marketplace of ideas. That is why he is not here today.
- (p37) - He once debated me on Good Morning America, and I guess he decided that wasn't the right way to go. The right way to go is not to talk about it, to try to silence critics such as myself and perhaps such as this Congress.
- I think this all raises some important questions. Should a corporation be able to use its resources to silence critics?
- It should be noted that there are few if any remedies against this kind of lawsuit however frivolous, and the cost of defense can easily run $25,000 to $75,000 and up. Some law firms wanted a $25,000 down payment before they start talking.
- (p37) - Here is one business practice aimed directly at the first amendment and even aimed at Congress itself as one of the defendants in the Changing Times lawsuit is a congressional investigator. It is no coincidence that a company which uses improper tactics to sell cancer insurance will also use improper tactics to silence legitimate criticism.