Community Development Innovation Review
February 2009
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What Lessons Does the CRA Offer the Insurance Industry?
In light of the $150 billion bailout of AIG, there has been a renewed call for increased federal involvement in the insurance industry, including a proposal to extend something similar to the Community Reinvestment Act (CRA) to insurance providers. Although that seems fair at first glance, simply applying the banking model to insurance is problematic for several reasons: (1) it contradicts the core business model of insurance; (2) it would not address the existing deficiencies in serving the low- to moderate-income market; and (3) the current fractured regulatory structure has no capacity to administer, uniformly and cogently, a national program such as a new CRA-like requirement. A greater opportunity exists in leveraging what insurance does best: mitigating risk to encourage investment and innovation and smooth unpredictable losses.
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Other articles in this issue
A Framework for Revisiting the CRA
The Community Reinvestment Act and the Recent Mortgage Crisis
The 30th Anniversary of the CRA: Restructuring the CRA to Address the Mortgage Finance Revolution
The CRA within a Changing Financial Landscape
The Community Reinvestment Act: Outstanding, and Needs to Improve
It’s the Rating, Stupid: A Banker’s Perspective on the CRA
The Community Reinvestment Act at 30 Years
A Tradable Obligation Approach to the Community Reinvestment Act
The Community Reinvestment Act: Past Successes and Future Opportunities
A More Modern CRA for Consumers
CRA Lending During the Subprime Meltdown
Expanding the CRA to All Financial Institutions
The Community Reinvestment Act: 30 Years of Wealth Building and What We Must Do to Finish the Job
The CRA as a Means to Provide Public Goods
Putting Race Explicitly into the CRA
Community Reinvestment Emerging from the Housing Crisis
A Principle-Based Redesign of HMDA and CRA Data