Insurance Companies as Corporate Regulators: the Good, the Bad, and the Ugly

Political scientists, economists, and legal scholars have been debating corporate social responsibility for decades.1 To that end, the financial crisis, fraud relating to Enron and Worldcom, Occupy Wall Street, and even the 2016 presidential primary debates all raise attention and concern about what corporate social responsibility is and should be in the United States. The traditional view, the standard shareholder-oriented model, suggests “corporations have no specific social responsibilities beyond profit maximizing for the benefit of shareholders” as long as such profit maximizing occurs without violating the law or engaging in deception or collusion.2 More recently, a progressive alternative, the stakeholder-oriented model, suggests corporate officers’ and managers’ underlying social obligations go beyond merely maximizing shareholders’ wealth within the confines of following the law.3 Rather, under this model, corporate social responsibility means that directors should consider the impact of their deci-