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Whale Oil and insurance

  • May 31st, 2010

I have not seen the Herald on Sunday, or the TV 3 coverage, but Cactus Kate, adopted by Kiwiblog, express the views of many on Cam Slater's predicament. I contacted his lawyer Greg Thwaite after my post suggesting a fund to meet his costs and fines for defending free speech and open justice against the name suppressor's attacks.

Greg said he would look into it. On Friday evening at a dinner we both attended he said it was underway.

I do not join in the railing against the insurers, Fidelity,  or psychiatrists and other medical professionals or police or any others caught up in responding to mental illness. Anything they do will be wrong in some eyes. In hindsight it will always be possible to argue that they were too interventionist or not enough, too trusting or not enough, too harsh or not enough, too ready with the pills, or not enough. I'm just glad that curiousity took me to the third year of psychology at university, then judgment said "whoop whoop – pull up" before I got drawn into too much more time with would-be science that was not there yet, time with people uncertain of their own sanity, time with people with no choice but to work without a reliable intellectual compass, yet who must pretend to have one (and perhaps come to believe that whatever compass  they have is better than it is). 

Society wants them to evince confidence, and to wield authority despite their absence of scientific assurance. They have no choice but to make hard choices under that uncertainty, knowing that the consequences will hurt, sometimes tragically.

I'd be surprised if disability insurance is not a thankless area of business, at least as it relates to mental illness. All insurance carries the risk of moral hazard – the risk that paying for a condition tempts people to fake loss. We get more of what we pay for.

Welfare can protect the genuinely helpless for whom life without benefits would be desperate. Discrimination between the deserving and the undeserving poor can never be without bitter controversy. But the cost to New Zealand of giving up has been the creation of  thousands of beneficiaries useless to themselves and others.

Insurers who are not suspicious and tough go out of business. They attract those willing to burn their own property (when values are falling or they are in financial strife). Many readers will have exaggerated the value of goods stolen or lost  in a claim. Freezing workers cut themselves carefully to qualify for the period of ACC they want.

An orginal Woodhouse Report justification for the automatic coverage of work injuries was that the year or so spent in personal injury litigation to determine a workers' compensation tort claim, led to unnecessary permanent incapacity as people became accustomed to the helplessness they exaggerated to maximise their court award.

ACC still creates the same temptation – malingering becomes a self perpetuating condition. Yet when an insurer applies the level of suspicion and challenge to claims that it must if malingering is not to become epidemic, it will unavoidably be "harsh" to some whose condition is genuine, and for whom more generosity could be helpful.

But even there it is wise to refrain from too much confident judgment. There is plenty of evidence that enabling learned dependency can be more harmful in the long run for many borderline cases, than obliging people to test their limits and get into a "must do – can do" frame of mind.

As all this affects Cam Slater – I do not presume to judge.

But I remain grateful to him for challenging the judges and the iniquitous law that shelters privileged wrongdoers behind secrecy orders. When Greg tells us where to send donations, I'll post it.


[…] Stepehn Franks on Whaleoil and Insurance. […]


Sensational post. Have you heard where greg wants the donations yet?

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