Insurance

William M. Shernoff (Letters, Sept. 27) stated that a utility-type commission is needed for insurance. His position was based on the fact that “two utilities were ordered to refund $24 million.”

I was disappointed in that this is a blatant use of comparing apples to oranges and arriving at an erroneous decision.

Utilities are normally monopolies and therefore require regulation of the price that they may charge the consumer. However, the utility’s price guarantees a profit to the utility. To compare pricing for insurance with a utility is obviously erroneous in that the insurance company does not have a guaranteed profit and also, under normal conditions, are in a very competitive posture.

It is sad that people believe that government regulations are more effective than the marketplace in determining price. Experience demonstrates that government regulations do not make for a more competitive product.

LAWRENCE KRAMER

North Hollywood

Kramer is chairman of the board of Century-National Insurance Co.