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The Capitol Building in Washington, D.C.
The Capitol Building in Washington, D.C.

When President Obama signed the Wall Street Reform and Consumer Protection Act into law, the federal government suddenly got far more involved in the business of insurance regulation. But while many lawmakers agreed on a need for reform, few understood the intricacies of the insurance business.

That's where Terry College Professors Robert Hoyt and James Carson come in.

For nearly 20 years, the pair has taught classes for the Griffith Insurance Foundation, a nonprofit group that offers seminars on insurance and risk management to students, teachers and public policymakers. State legislatures have traditionally been responsible for regulating the insurance industry, so when the federal government stepped in, the foundation began hosting programs on Capitol Hill.

“This whole workshop is about basic fundamentals or concepts of insurance, with the idea being that hopefully those individuals who are faced with very tough regulatory and legislative discussions will feel like they understand the basics of how the business works,” says Hoyt, the Moore Chair of Insurance and the head of Terry’s risk management and insurance program. “We wanted this to be very independent. We didn’t want to be lobbying or focusing on particular issues. As academics we tend to come with a lot less bias, which may not be true for someone who comes from the industry.”

Hoyt teaches a session called “The Business of Insurance” from a room in the Rayburn House Office Building that’s reserved for meetings of the House Committee on Financial Services.

To accommodate the hectic schedules of House and Senate staffers, each session lasts 75 minutes and meets over lunch. Sessions this year drew about 150 attendees over four weeks in April and May.

“A question that often comes up is how well these insurance firms are protecting themselves against failure, if they’re making risky decisions or have become too big to fail and might bring down the rest of the financial market if they collapse,” Hoyt says. “But the insurance industry is actually one of the best industries with respect to financial solvency.”

By helping staffers better understand risk and insurance, the program aims to shape higher quality legislation and discussions in the House and Senate, says Carson, the Daniel P. Amos Distinguished Professor of Insurance.

“In some ways it’s very similar to teaching an intro college class because we’re talking about the fundamentals of risk and insurance,” he says. “The challenge of these sessions is that in essence I’m trying to do a good portion of our intro class, which we would normally spend a semester on, and distill it down to 75 minutes.”

Carson teaches a course called “The Basic Principles of Risk Management and Insurance.” He says that while it’s hard to measure the sessions’ effect on the legislation in Congress, it’s clear that interest in the program is growing.

“Everyone feels good about our progress in terms of the number of people we’re reaching and making aware of the concepts and the tools that are available to deal with risk,” Carson says. “From here it’s just a matter of moving forward to reach more people.”