A look back at changes, good and bad

Anniversaries are times for reflection. And with my 35th anniversary with Business Insurance this month, I have a few thoughts on some of the changes I've seen in my three and one-half decades here.

The most obvious change is the impact of technology. When I started in January 1977 as a reporter in BI's Washington bureau, I wrote my stories on a typewriter and sent them for editing to Chicago on a telecopier, a slow and unreliable predecessor to fax machines. Production was cumbersome, and BI came out twice a month.

Today—thanks to the Internet—news can be distributed just about instantly and by almost anyone. That change is dramatic, but it is difficult for me to say whether the near-instant availability of news has made us better informed.

Narrower, but still important, is the change I've seen in the captive insurance industry. When I joined BI, if an organization wanted to set up a captive, its domicile choices basically were Bermuda and the Cayman Islands. Not one U.S. state had an attractive captive licensing law.

That changed in 1981 when Vermont passed its captive-friendly statute. Within a few years—thanks to its attractive law and a favorable regulatory climate—Vermont began to boom as a captive domicile. Today it is the third-largest domicile, with nearly 600 captives.

To me, the success of Vermont shows how a handful of people—a New York attorney, a New York insurance broker, the Risk & Insurance Management Society Inc.'s director of government affairs and a few Vermont officials who worked together in crafting and helping to win passage of what became Vermont's captive law—can change an entire industry.

Vermont's success inspired more than two dozen U.S. states to pass similarly attractive captive licensing measures, giving U.S. employers a breadth of domicile choices that did not exist 35 years ago.

In the benefits arena the biggest change, and an unfortunate one, is the decline and fall of defined benefit pension plans. Thirty-five years ago, stories about “pension plan freezes” were unheard because there weren't any. Today, it is increasingly difficult to find a company that hasn't frozen its plan.

Mandated low interest rates, which drive up the value of liabilities, and corporate concerns about how increased life expectancies will impact future costs are the major drivers of the plans' demise.

But decades of over-legislation and ever-changing rules from Washington lawmakers and regulators have contributed to the plans' demise.

The biggest and most ominous changes, though, involve our political system. Thirty-five years ago, congressional Democrats and Republicans really did try to work together to reach a consensus on major issues. That kind of bipartisanship is all but gone, for reasons of which I'm not entirely sure.

Whatever the reasons, we—the American public—are the victims of that loss of bipartisanship, as neither party has a monopoly on good or bad ideas.