No Benefit by Lawrence D. Weiss

Author:Lawrence D. Weiss [Weiss, Lawrence D.]
Language: eng
Format: epub
Tags: Social Science, General, Sociology
ISBN: 9780429719110
Google: bXekDwAAQBAJ
Publisher: Routledge
Published: 2019-04-02T04:53:03+00:00

Only a Few Insurers Control ISO

Despite the fact that ISO has about 1,400 corporate members, control of the organization seems to be highly concentrated among relatively few of those members. And, according to the suit filed by the State of Texas against ISO and other defendants, those who control ISO are in a key position to squelch competition in the industry. The Texas suit is a bit different—perhaps a bit more revealing about industry practices than the others because the Texas suit was brought under more restrictive Texas regulations rather than under the federal antitrust laws:

Defendant ISO is operated through an Executive Committee taken from the Board of Directors, and various other committees appointed by the membership or by the Board of Directors. Under the ISO Articles of Incorporation and Bylaws, ISO committees are composed of individuals. In reality, however, insurance companies act as the members of the committees. Some companies rotate employees as the company's "representative" on a committee. Further, individual companies often present their company's position on an issue through their corporate representative. Thus, in actuality, the board rooms and committee rooms of Defendant ISO are the forums for agreements in restraint of trade in violation of the Antitrust Act of the State of Texas.

From the beginning of 1982 until the end of 1986, only 37 different companies, comprising approximately 2.8 percent of the ISO membership, served on the ISO Board of Directors. Further, 8 to 12 large primary companies, including the primary insurer Defendants, consistently controlled the Executive Committee. The primary insurer Defendants, comprising approximately 0.6 percent of the membership of ISO, dominated the ISO committee structure and thereby controlled ISO. (The State of Texas v. Insurance 1988)

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