An audit of The Beacon Mutual Insurance Co. has confirmed what a whistle-blower charged last fall: It found “a pattern of favoritism that has unfairly benefited” Beacon’s former chairman, select policyholders with connections and certain insurance brokers.
The findings are serious and require immediate attention, including a shake-up of the negligent board and the naming of a new CEO to replace Joseph A. Solomon. Beacon’s survival is critical, and if the insurer doesn’t quickly regain its ethical footing, it risks going out of business despite an enviable operating history.
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The committee’s recommendations should be implemented now: end discriminatory pricing; adopt a stronger ethics code; establish an internal audit office; and encourage employees to speak up.
Beacon also needs more independence, however. The governor’s five out of nine board appointees failed to exercise oversight, and there is no reason to believe that more political appointees would do better. In fact, the company needs to load its board with professionals in the field who can challenge senior management and better represent policyholders.
Most critical is the need to re-establish the company’s integrity, so that the state can avoid the same kind of crisis that led to the creation of Beacon 15 years ago.
Let voter initiative be other states’ folly
A group of civic leaders, backed by Gov. Donald L. Carcieri, is pushing to get voter initiative on November’s ballot. Thankfully, for the moment, their efforts have been stymied, as both houses in the General Assembly have voted down the proposal.
On its face, the concept seems to be the epitome of democracy: Citizens can petition the government to put a law or constitutional amendment on the ballot. Cut out the middle man, the concept suggests – especially if he’s an untrustworthy politician.
The problem with this idea is that it undermines the functioning of representative democracy. Yes, bad legislation is passed on a regular basis. But the best way to fix that is to participate in the process, and vote out those who don’t serve the public well.
Voter initiatives won’t make elected leaders more responsive. They will add new perversions to the system. The majority will continue to be silent, while radicals and deep pockets seek to sway opinions with 30-second TV ads.
That is a recipe for bad public policy.
