INSURANCE WOES

I used to teach third grade; I only know what I have been told about the insurance business. Someone please tell me this is not correct.

BACKGROUND: the insurance industry is required by federal and state regulations to have a 65/35% split of their funds. Sixty-five percent is paid out to claims and thirty-five percent is divided between salaries, expenses, and the chunk of change that is required by law for them to have on hand in case of catastrophe. That means when the federal or state or industry regulators come checking, if the company has an imbalance in that percentage, they are ruled "unstable" and are punished or lose their license.

YESTERDAY: the President put the entire nation's insurance industry in an "unstable" condition when he signed his healthcare bill. That's because in a stoke of the pen, insurance pay out requirement went from 65% to 85%. That leaves them 15% to operate on. Can an industry operate on 15%?

FORWARD: if you were the insurance industry and you were loaded under a pile of new services that had been government mandated for you to provide...AND your purse for salaries/rent/and the catastrophe pot went down 20%...what would you do? Perhaps they could shut down offices and work at home. Or ask everyone to take a pay cut. But I bet they will raise their premiums. Then the insured will raise a rukus and the government will berate the industry. Eventually (I'm guessing) the government will ride in on a white horse. Voila! The government is left standing as the single payer.

Someone please tell me this ain't so.