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Matthew Glans

The regulation of chemicals has been an issue of growing importance, as new concerns over the effects of chemicals found in everyday products emerge, a greater emphasis has been placed by governments and consumers on how certain chemicals affect the human body. One chemical that has become a chemical of concern for some environmental groups is Bisphenol A, or BPA.

Chemical BPA is a chemical used in plastics for many consumer products. Amongst other uses, BPA most commonly used in hardened plastics and as part of the safety liner for food and beverage cans.

In a recent piece from the Business and Media Institute Julia Seymour writes about the concerted efforts of the media to brand chemicals like BPA as “toxic” while pushing for regulatory bans on the use of BPA. Seymour argues that these articles and stories do not fit the results that many scientists have found when examining the health effects of BPA.

Fear of chemicals and “toxins” is rampant among the so-called “environmental” left. Unfortunately, that phobia infects national media coverage as well. For more than a decade, the left has been on the attack against BPA, a chemical that is commonly found in plastics and other products.

Anti-chemical groups such as the Breast Cancer Fund and some scientists have crusaded against BPA (known formally as bisphenol A), connecting it to cancer and reproductive problems and claiming that it is “a threat to human health,” despite government agencies that have declared it “harmless” even in baby bottles. Much of the national media have bought in spreading fear of the chemical in ordinary canned goods, on cash register receipts, in dental sealants and more.

The Food and Drug Administration has a deadline of March 31 to respond to a petition by the Natural Resources Defense Council—an environmental group—that seeks to ban BPA. NRDC argues that the FDA should ban BPA on the basis that it causes harm to humans. In making these contentions, they cite animal studies showing potentially negative consequences of the chemical.

Seymour contends that the reports commenting on the negative effects of BPA are receiving more attention from the press, while studies refuting these claims are almost universally ignored.

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Like residents of all states with significant hurricane risks, people in Florida have to pay a lot for windstorm coverage. In an effort to control the costs of this coverage, Florida’s legislature has established the Florida Hurricane Catastrophe Fund, a massive-government owned reinsurance entity. In theory, the Cat Fund provides reinsurance (insurance for insurance companies) at rates less than the private market would and thereby produces savings that they can pass on to consumers.

An excellent new video was released recently illustrating how and why the Cat Fund was created and describing the current risk all Floridians face because of the fund’s $3.2 billion shortfall. In a press release announcing the video, its creators discuss the how the “hurricane taxes” associated with the Cat Fund will financially burden all Floridians.

Hidden Hurricane Taxes and You

All private insurers operating in the state are required to buy coverage from the Cat Fund (as it’s commonly known) and the Florida Citizens Property Insurance Corporation buys only Cat Fund coverage.

This system poses enormous risks to Florida’s fiscal future. According to Ray Lehmann, Deputy Director of the Center on Finance, Insurance and Real Estate at The Heartland Institute, these liabilities have risen to multi billion dollar levels. “The Florida Hurricane Catastrophe Fund has $18.4 billion of liabilities this year, and the fund’s own management concedes that its funding structure would leave it billions short of its obligations should a major storm hit the Sunshine State.”

These liabilities are unpayable. No state has ever issued more than $11 billion in bonds all at once.

Given these and other systemic problems, changes are needed to reform the Cat Fund. New reform proposals include Senate Bill 1372 and House Bill 833, which are featured in the video. These bills are based upon reform previously proposed by Jack Nicholson, the Florida Cat Fund’s chief operating officer and is designed to reduce or eliminate the possibility of the Cat Fund going broke after a storm and posing a risk to the state’s fiscal future.  Senate Bill 1372 and House Bill 833 are supported by various business, nonprofit and consumer groups.

“For several years Associated Industries of Florida has supported reform of the Florida Hurricane Catastrophe Fund, and while there has been forward progress in the past, we believe the legislation that is being considered this year will play a positive and important role in restructuring the fund,” said Jose Gonzalez, Associated Industries of Florida Vice President of Government Affairs.  “It’s important the Florida Legislature implement the necessary changes in order to better protect all Florida businesses, consumers, charities, churches and automobile policy holders.”

“Consumers should watch this video to learn more about how insurance works in Florida,” said Bill Newton, Florida Consumer Action Network Executive Director.  While ‘solvency and assessment risk issues’ are not familiar to most Floridians, the video may help consumers understand their premiums. FCAN supports the legislation from Senator Alexander, Representative Hager and Florida Hurricane Catastrophe Fund Chief Operating Officer Jack Nicholson and I believe it is an incremental, measured path to necessary reform. But it is important that the bill remain as originally drafted so it has only minimal impact on premiums.”

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The Green Scissors coalition held a press conference this morning at the Hotel Monaco in Chicago to announce the release of their new report, “Green Scissors 2011.” Heartland Institute Vice President Eli Lehrer was among those who spoke at the presser — which you can hear on the player at the end of this post.

Green Scissors is designed to be a road map of spending changes allowing Congress to save up to $380 billion over five years by curbing wasteful spending that harms the environment. The Green Scissors coalition is a diverse group of public policy organizations including progressive environmental group Friends of the Earth, deficit hawk Taxpayers for Common Sense, consumer watchdog Public Citizen and free-market think tank The Heartland Institute.

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Out of the Storm News is the Heartland Institute’s site from the Center on Finance, Insurance and Real Estate. Here is a round-up of some of the best recent pieces from OOTS News.

What’s Next for Fannie and Freddie? Good Question.
OOTS Contributor Phil Britt examines the future of Fannie Mae and Freddie Mac, taking comments from financial experts.

OOTS On Wealth – How Much Money Does It Take To Be A Sugar Daddy?
This article is the first in a new Out of the Storm News series examining how people from different walks of life perceive their own wealth and wealth in general. OOTS News interviewed Stephan Smith, PR director for SeekingArrangement.com, billed as the Elite Sugar Daddy Dating site. OOTS News asked Mr. Smith about how elite a sugar daddy has to be to seek an arrangement through his site.

Crash Taxes: Q&A with Mary Bonelli of the Ohio Insurance Institute
New proposals to create accident or “crash” taxes continue to emerge in town councils across the country. The prevalence of these proposals has risen as local government officials nationwide struggle to balance their budgets. Out of the Storm News conducted a Q&A with Mary Bonelli of the Ohio Insurance Institute, one of the leading insurance groups following the crash tax issue.

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How does a insurance agent view the holidays? While most people look at the holidays as a time for gifting and frivolity, this time of year is amongst the most risk filled times of the year and a busy time for insurance agents. Claims are at their highest with the increases in household and travel accidents.

What would an insurance agent perspective be of one of the most popular Christmas stories, The Night Before Christmas? The poem, read by many a parent to their children on Christmas Eve night is apparently frocked with liabilities that only a mind tuned to insurance can see.

From the online blog Coverage Counsel from sources unknown is ‘Twas the Risky Night Before Christmas — How an Insurance Professional Reads the Classic: [click to continue…]

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Out of the Storm News is the Heartland Institute’s site from the Center on Finance, Insurance and Real Estate. Here is a weekly round-up of some of the best recent pieces from what we affectionately call OOTS News.

New Financial and Insurance Reforms Likely to Come from White House

Financial experts argue that the next wave of insurance and finance reforms will come from the White House and not Congress. Which direction will the Obama Administration take the country?

Senate Dems Seeking to Add Build America Bonds to Bush Tax Deal

Out of the Storm News recently wrote about the increasing levels of debt that the Build America Bonds were creating for both state and local governments. The municipal bond subsidy, which Steven Malanga called a “debt bomb” is now being pushed by several Senate Democrats to be included in the tax agreement being hammered out between the Obama administration and Congressional Republicans.

On Amish Roofers

Arin Greenwood discusses a fascinating Insurance Journal story about the culture clash in Philadelphia’s suburbs, where Amish roofers have become a big enough commercial force to get non-Amish roofers complaining about unfair competition.

Can Credit Unions Fill the Gap in Small Business Lending?

A new story from OOTS News examines a new proposal to expand the ability of credit unions to lend to their member businesses. Can it fill the gap in small business lending?

Morbid – but Awesome: Brad Laybourne is in Favor of Celebrity Death Pools

Brad Laybourne examines celebrity death pools, questioning why they have been outlawed.

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With the credit and bond markets remaining frozen, many states and municipalities are finding it difficult to raise funds for large-scale projects. In order to “revitalize” the bond market for municipalities and state governments, Congress created a new group of bonds as part of the 2009 stimulus package: Build America Bonds (BABs). These subsidized bonds were quickly embraced by states and municipalities nationwide, with bodies at all levels of government accumulating billions in new debt.

The new bond program has been less than successful. The new debt being accumulated by states and municipalities has made selling bonds even more difficult, with bond issuers unwilling to take on the increased lending risks. The public is for the most part unaware of the new debt and the risk it poses.

Two new articles address some of the issues created by the subsidized Build America Bonds. The first article, a Wall Street Journal article by Steven Malanga, senior fellow at the Manhattan Institute, criticizes the subsidized bonds, calling them a “debt bomb.” Malanga also warns taxpayers of the likely possibility of a BAB bailout, contending the government may be compelled to bail out BABs in the event of widespread defaults.

Malanga’s article, “The ‘Build America’ Debt Bomb” originally appeared in The Wall Street JournalNovember 22, 2010 and can be found online at:http://online.wsj.com/article/SB10001424052748704648604575621062239887650.html?mod=googlenews_wsj

The second article was written by Steve Stanek, a Heartland Institute research fellow and editor of Budget & Tax News. Stanek interviews several financial experts and takes their comments on the potential problems the BABs create for the bond market and taxpayers.

Stanek’s article, “States Are Already Getting Bailouts; Some Worry They Could Get Much Bigger,” is reprinted below. It originally appeared in FIRE Policy News and can be found online at: http://www.firepolicy-news.org/article/28796.

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Out of the Storm News is the Heartland Institute’s site from the Center on Finance, Insurance and Real Estate. Here is a weekly round-up of some of the week’s best pieces from what we affectionately call OOTS News.

Re-foreclosures Giving Some Homeowners a Second Chance

Problems with foreclosure documentation and home titles are leading to hundreds of homeowners being forced to restart the foreclosure process.

No to Buzzwords!

What business cliches and buzzwords drive you crazy? AOL Jobs created a list of “Most Hated Business Terms, which ones have you heard?

Should the Government Control Executive Pay?

The government is being to move towards greater control of executive pay in the private sector; should they be allowed control what businesses pay their employees?

America Tells G20: We’re Closed for Business

Eli Lehrer has an interesting new piece on economic and trade issues on the Frum Forum. In the article, Lehrer discusses the Obama Administration’s recent failure to reach a trade agreement with South Korea and the growing trend of trade protectionism in U.S. trade policy.

Nashville’s Back

Arin Greenwood comments on a Insurance Journal story about Nashville’s music scene coming back after last spring’s flooding.

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In the Simpsons episode “The Itchy & Scratchy & Poochie Show,” a frustrated script writer for the children’s show Itchy and Scratchy called out his colleagues for using buzzwords such as “proactive” and “paradigm,” calling them buzzwords that make dumb people sound smarter and more important, after which he was promptly fired.

“Excuse me, but “proactive” and “paradigm”? Aren’t those just buzzwords that dumb people use to sound important? Not that I’m accusing you of anything like that…. I’m fired aren’t I?”

Every industry is full of its own cliches, buzzwords that convey vague and often convoluted ideas common to the business world. An interesting new article from AOL Jobs creates a list of “Most Hated Business Terms. Eli Lehrer of the Heartland Institute’s Center on Finance, Insurance and Real Estate added his most hated term to the mix: “Enterprise risk management.”

23. “Enterprise risk management.” It’s used often at insurance and other financial services, and means nothing at all but is used to mean things as varied as “shopping for an insurance policy,” “managing an investment portfolio to achieve stable returns,” “improving plant safety,” or “acquiring a competitor,” said Eli Lehrer of the Heartland Institute.

The list includes favorites like “think outside the box” and the cringe including “synergy.” The original story, “25 Most Hated Business Terms” can be found online at: http://jobs.aol.com/articles/2010/11/17/25-most-hated-business-terms/

College Humor also has a unique take on industry buzzwords in its hilarious video on online branding.

Somewhat Reasonable would like to hear some of your favorite (or hated) business buzzwords in our comment section.

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With tough new financial regulations on the way for thousands of banks and financial services companies as part of the Dodd-Frank Act, industries are shuffling to position themselves outside the Federal Reserve’s new authority. In a recent article from the National Underwriter, the American Insurance Association lies out its case against increased regulation in a letter to the Financial Stability Oversight Council.

“In its letter, the AIA said p&c companies should not be subject to such supervision because, while “essential” to the U.S. financial system and overall economy, they do not pose a threat to financial stability.

The AIA said P&C companies “do not present leverage to the economy and do not have an infrastructure maintenance function.”

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