Preventing Capture Through Consumer Empowerment Programs: Some Evidence from Insurance Regulation

48 Pages Posted: 12 Jan 2012

See all articles by Daniel Schwarcz

Daniel Schwarcz

University of Minnesota Law School

Date Written: January 11, 2012


This Chapter in Preventing Capture: Special Interest Influence in Regulation and How to Limit It, examines the extent to which consumer empowerment programs can counteract industry influence over insurance regulation. Consumer empowerment programs come in two basic varieties. Proxy advocacy creates independent government entities that are tasked with representing consumer interests in regulatory processes, while tripartism empowers independent public interest groups to influence regulation. Focusing on three short case studies, the Chapter offers several preliminary thoughts regarding the optimal deployment and design of these programs in insurance regulation. First, it suggests that proxy advocacy can effectively counteract industry influence where there exists a discernible consumer position, new information is likely to impact regulatory results, and the involvement of non-industry stakeholders is limited. These conditions are met in a broader set of circumstances than the current deployment of proxy advocacy might suggest. Second, it argues that tripartism may be more desirable than proxy advocacy when a clear consumer position is difficult to identify or the threat of political pressure is an important tool to influence results. However, the Chapter cautions that tripartism may be ineffective where there does not exist a sufficient network of public interest groups, which is a substantial risk in regulatory contexts that resemble insurance.

Keywords: Regulatory Capture, Insurance Regulation, Tripartism, Proxy Advocacy,

Suggested Citation

Schwarcz, Daniel, Preventing Capture Through Consumer Empowerment Programs: Some Evidence from Insurance Regulation (January 11, 2012). Minnesota Legal Studies Research Paper No. 12-06, Available at SSRN: or

Daniel Schwarcz (Contact Author)

University of Minnesota Law School ( email )

229 19th Avenue South
Minneapolis, MN 55455
United States


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