Friday 15 October 2010

innefficient money laundering

Schools (hospitals, police, etc) all have liability insurance, so if they get sued the insurance company picks up the costs.

This seems incredibly dumb for two reasons:

1/ it ruins the deterrent effect -- it replaces 'if you do anything illegally dangerous or you'll have a hefty fine; if you don't, you wont' with 'if you do anything illegally dangerous you'll have a slight insurance cost; if you don't, you'll have a slight insurance cost'.
2/ the government are responsible for the costs of each school/hospital/etc. when looked at from their pov, it'd make more financial sense to centrally manage the liability costs, effectively doing the same as the insurance companies but without making any profit (i.e., slightly less costly for the tax payer).

iow, the government pass liability laws which are effectively neutered by the insurance companies, who, btw, cost more than if the government simply payed the liability (tho admittedly they make sense for each individual department, when viewed as a whole the gov' is loosing out).

Betcha the liability insurance companies pay the Labour party money. thus, tens of millions* of our tax-pounds go to liability insurance companies who pass on hundereds of thousands* to the Labour party.

Government inefficiecy, eh? it even extends to money laundering...

* NOTE: figures are wild assumptions; must check at some point.