Revolution

Oklahoma Exempts Group From Insurance Regulation

Oklahoma passed a law, signed by the governor April 28, 1994, exempting a religious newsletter from insurance regulations, according to a May 2, 1994, PRNewswire report.

The Christian Brotherhood Newsletter, with more than 25,000 subscribers nationwide, coordinates contributions for medical expenses incurred by subscribers. If a member has a need, it is published in the newsletter, and other subscribers respond with cards, prayers and monetary gifts to help pay the bills.

The problem is that insurance regulators in Oklahoma and other states see this as a form of insurance. If the newsletter is forced to comply with costly insurance regulations, it will go out of business.

Oklahoma State Rep. Jim Dunlap (R) introduced H.B. 2125, exempting religious organizations from insurance regulation. The bill passed the state house on a concurrence vote to the state senate version on April 25, and was signed by the governor April 28.

Similar laws have been passed in Kentucky, Kansas and Pennsylvania.

According to PRNewswire:

The Oklahoma Insurance Department launched an inquiry into the operation of the Newsletter in June of 1993. Upon review of documents provided by the Newsletter and a flood of correspondence from Oklahoma subscribers, Commissioner of Insurance Cathy Weatherford determined in a July 29, 1993 letter to the Newsletter that "it appears Christian Brotherhood Newsletter does not meet the definition of insurance found at 36 O.S. 102." Ms. Weatherford also suggested at that time to pass legislation to further clarify the Newsletter's status in Oklahoma.

... House Bill 2125 stipulates that the Oklahoma Insurance Code does not apply to a non-profit, religious organization that "acts as an organizational clearinghouse for information between subscribers who have financial, physical, or medical needs and subscribers who choose to assist with those needs, matching subscribers with the present ability to pay with subscribers having a present financial or medical need," as long as the suggested amounts to give are "voluntary among the subscribers, with no assumption of risk or promise to pay ..."

In 1993, Newletter subscribers helped each other pay over $27,000,000 of medical expenses.

The need for such an exemption highlights the fact that regulation drives up the cost of insurance. If the Christian Brotherhood Newsletter can only operate successfully without regulation, how many private insurance companies are driven out of the market by such regulation?