With most companies, a company succeeds by treating it's customers fairly and running ethical business practices. In the insurance industry you profit by screwing your customers who have nowhere else to go.
I am from Saskatchewan, Canada, a province that has been run by a socialist government for the majority of its existence. We have many many Crown Corporations, that being companies owned by the government. One of our Crowns is SGI (Saskatchewan Government Insurance), it competes with the co-ops and private plans for all insurance that isn't related to health care.
A look into SGI is an example of a public insurance company keeping the private insurance companies honest, and a look into how to bring about the public option.
In Saskatchewan our insurance company earns profits that go back to the taxpayer, and the people of the province get the lowest insurance rates in Canada. The private companies have to compete here, so they have to keep their rates low. If the insurance company makes money at the end of the year, our rates go down, and we get a check in the mail. Of course the right wing political party hates this, as they get massive donations by private insurance companies, only the people of this province demand not to sell SGI as they know they have the lowest rates in Canada.
I just wanted to throw an example in there that proves public insurance companies do keep the private companies honest. SGI insurance also competes across Canada, and a possible other solution if American legislators fail the people of America in providing the Public Option.
In 1945, Saskatchewan Government Insurance was founded by the CCF (Now known as the New Democratic Party) and it's leader Tommy Douglas. Tommy Douglas was the same Premier who advanced the agenda of Medicare. Tommy also founded many Crown Corporations SaskTel, Sask Power, Saskatchewan Transportation Company, Saskatchewan Potash, Sask Energy, and many more Crowns.
The people of this province love their Crown Corporations, and kept the left leaning Saskatchewan New Democratic Party in power, as they were trusted not to sell off the crowns. The Saskatchewan people love their crown corporations because they keep good jobs in the province, help keep the private companies honest, and generate great wealth to an economy that relied on Agriculture.
I thought I would use the SGI example as proof, a public owned insurance company helps keep the private insurance companies honest, while also turning a profit.
Saskatchewan Government Insurance (SGI) provides property and casualty insurance products and services. SGI manages the Saskatchewan Auto Fund, which is the province's central auto insurance program, which includes the driver's licensing and vehicle registration programs. Established in 1945, the highly successful Auto Fund is financially self-sustaining business that operates on a break-even basis, over time. The Auto Fund does not receive money from the Provincial government, nor is required to pay dividends, and offer residents some of the lowest and most stable auto insurance rates in the country. In addition to its Regina head office, SGI operates 20 claims centres across the province and works with a network of almost 300 independent insurance brokers and about 450 motor licence issuers.
In addition, the Crown Corporation sells property and casualty insurance products for home, farm and business customers outside of the province through its SGI Canada division. The division serves customers across Saskatchewan, Alberta, Manitoba, Ontario, Prince Edward Island, Nova Scotia and New Brunswick. SGI Canada has offices in Edmonton, Winnipeg, Toronto (Coachman Insurance Company) and Charlottetown (Insurance Company of Prince Edward Island).
SGI Canada continues expansion to other provinces
SGI Canada had its second best year on record in 2005, posting a consolidated profit of more than $35 million, despite record storm costs of over $28 million in Saskatchewan. SGI Canada is the competitive arm of SGI, Saskatchewan's provincial insurance corporation. It sells property and casualty insurance in Saskatchewan, Manitoba, Ontario and the Maritimes, and will begin selling insurance products in Alberta this year.
"SGI Canada continued to expand its presence beyond Saskatchewan's borders," Minister Responsible for SGI Glenn Hagel said. "Forty-five per cent of the company's underwriting profit came from the business written in other provinces, despite the fact that 84% of our premiums are written in Saskatchewan. Each of SGI Canada's out of province operations were profitable in 2005 and continue to spread SGI's insurance risk, earn profits and create jobs in Saskatchewan."
Looking toward the future, SGI Canada plans to write $50 million in premium income over the next five years from the Alberta market alone. "In 2006, SGI will give back $45 million to 520,000 customers through an 8% rebate on the insurance premiums they paid for 2005 coverage. SGI customers will continue to enjoy the lowest auto insurance rates in Canada, with 2006 marking the sixth year in a row with no general increase to rates."
Perhaps a "Blue State" should start up a public insurance company for its citizens, as Saskatchewan did, as having the only socialist government in the country. Once the public company is created, then the company could expand across the country and offer all Americans a real choice. It seems the way that progressive legislation passes in the US, state by state, vs. being federally enacted, examples of such are gay marriage and decriminalization of marijuana.