Cellulose Aff Wave 2

Miami Debate ABJ
Biofuels
Wave 2 Aff Index
Wave 2 Aff Index.............................................................................................................................1
Cellulose Ethanol Good – Biomass.................................................................................................2
Cellulosic Ethanol Good – Versatile ...............................................................................................3
Biofuels Good – Energy Efficiency.................................................................................................4
Biofuels Good – Economy...............................................................................................................6
Biofuels Good – Terrorism..............................................................................................................7
Biofuels Good – Environment.........................................................................................................8
Biofuels Good – Global Warming...................................................................................................9
Global Warming Extensions: Now Key for Incentives..................................................................10
Oil Dependence Bad – Great Power Wars 1/2...............................................................................11
Oil Dependence Bad – Economy...................................................................................................13
Oil Dependence Bad – Terrorism...................................................................................................14
Oil Dependence Bad – Hegemony.................................................................................................15
Oil Dependence Bad – Iranian Prolif.............................................................................................16
Oil Dependence Bad – Genocide...................................................................................................17
OPEC Bad......................................................................................................................................18
Solvency – Modeling/Diffusion.....................................................................................................20
2AC Add-on: Dead Zone...............................................................................................................21
2AC Add-on: Malaysian Forests....................................................................................................22
2AC Add-on: Amazon Deforestation.............................................................................................24
States 2AC 1/2...............................................................................................................................26
States 2AC 2/2...............................................................................................................................27
States Fail: Inefficient....................................................................................................................28
Federal Preemption........................................................................................................................29
States Fail at Investor Protection...................................................................................................30
Federal Insurance Interventions Common.....................................................................................31
Can’t Fiat the NAIC.......................................................................................................................32
States Fail: Insurance Licensing....................................................................................................33
States Fail: Insurance Licensing....................................................................................................34
NAIC Fails- Corruption.................................................................................................................35
NEG: Reg Change Bad..................................................................................................................36
NAIC Bad- Undermines State Solvency........................................................................................37
States Fail: NAIC Key...................................................................................................................38
States Bad: Cost.............................................................................................................................39
States Bad: On-Balance.................................................................................................................40
NAIC BAD: Can’t Reform............................................................................................................41
Federal Action Key........................................................................................................................42
States Bad: NAIC- Shouldn’t Devolve..........................................................................................43
Miami Debate ABJ
Biofuels
Cellulose Ethanol Good – Biomass
Biomass is innovative-it can use parts of plants that generally go to waste.
<Robert Zubrin, senior engineer with the Martin Marietta Astronautics company,
author, Energy Victory, Prometheus Books, 2007>
Finally there is the possibility of making fuel from biomass,
derived from either agricultural crops or wild plants. In assessing
bio mass potential we are presented with a problem, in that good
statistics exist only for commercial crops and forestry products
that are actually harvested and sold. The capacity of various
nations to produce such products is certainly indicative of their
biomass production potential, but is hardly the whole story. For
example, many countries could grow much more crops than they
currently do, if there were a market for them. Furthermore, in
transforming biomass into fuel, many parts of the plants that
currently are not harvested, such as leaves, roots, and stems,
could also be used. Finally, biomass for fuel can be produced out
of innumerable types of wild plants that are not commercial crops
or forestry resources at all. Currently, scientists estimate that
about 220 billion tonnes of biomass grow each year worldwide.
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Biofuels
Cellulosic Ethanol Good – Versatile
Cellulose is versatile-Can be used to make Methanol
Biomass, which is primarily cellulose, can also be used to make
methanol. Cellulose is a complex long-chain molecule, with an
approximate formula of C4 H6 03 , with small amounts of
nitrogen, traces of sulfur, and a few other odds and ends mixed
in. Again, the strategy is simply to turn it into synthesis gas by
reaction with steam, using heat provided by burning a minority of
the material to drive the conversion of the rest. Once we have
the syngas, the rest of the process follows the same path as that
needed to convert coal or natural gas. And the beauty of it is that
any plant material, without exception—from weeds and fallen
leaves to swamp cattails and the vast floating growths that clog
innu merable rivers in Latin America and Africa—can be used as
feedstock for the process.
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Biofuels
Biofuels Good – Energy Efficiency
Ethanol is more easily accessed and cheaper than oil.
using sugarcane is the most economical way to produce ethanol,
but almost any crop with a high caloric value will do. Thus, in
recent years in the United States, a major ethanol industry has
been created based on the conversion of corn. Corn, however,
also contains much protein and other nutritional components not
utilized in ethanol production. In most commercial corn-to-
ethanol plants in America today, these com ponents are saved
and processed for sale as high-value animal feed. That said, the
food crops used as a basis for ethanol production through this
technique have significant commercial value, and that puts a
floor under the production cost of fermentation-based ethanol. For
sugar, that cost is about $1 per gallon, while for corn it is around
$1.50 per gallon (without any subsidy). Ethanol has about two-
thirds the energy value per gallon as gasoline, so these prices
correspond to gasoline sold at $1.50 and $2.25 per gallon,
respectively. These (before-tax—most gasoline sold in the United
States is taxed about $0.50 per gallon) gaso line prices, in turn,
correspond to oil priced at $36 and $54 per barrel. So long as oil
is pegged above this level (as it currently is), crop-fermenta tion
ethanol can beat the price of gasoline. Should the price of oil drop
below such levels, some combination of tariffs, subsidies, or
preferential taxes would be required to keep crop-fermentation
ethanol competitive. Only limited fractions of the plants that
farmers grow actually are sold as commercial crops. Large
quantities of vegetative material, such as the stems, roots, and
leaves of corn plants, for example, are left to waste. This is also
true of the leaves of trees that are discarded in the fall, and vast
quantities of grasses and weeds that grow, yellow, and fade
every year without being eaten or otherwise used by any living
creature. If this material could be turned into ethanol, its price
and availability would improve radically. All such material,
however, is primarily cellulose, which cannot be readily
fermented into ethanol. For this reason, considerable research is
currently under way in a number of places worldwide to try to
discover or engineer some microorganism that can transform
cellulose into a starch or a sugar, which would then be
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Biofuels
fermentable.
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Biofuels
Biofuels Good – Economy
Ethanol opens up jobs and options for fair trade.

<Robert Zubrin, senior engineer with the Martin Marietta Astronautics company, author, Energy
Victory, Prometheus Books, 2007>
But we actually have a labor shortage in America right now, as
shown by the fact that we need to bring in millions of immigrants
to do the work available. So rather than exercise our alcohol
option for energy autarchy, it would behoove us to create jobs
south of the border by buying much of our methanol and ethanol
abroad. Because, unlike oil, the sources of alcohol are so diverse,
we can allow ourselves to count upon importing a significant
fraction of our supply without impacting our safety. The
advantage of doing this is that by allowing the tropical agrarian
countries to produce some of our alcohol, we will put money in
their hands that they can use to buy our manufactured goods,
such as tractors and harvesters to grow the fuel crops, trucks to
transport them, and equipment to process the biomass into liquid
fuel. It's called fair trade, and it benefits everyone. The hydrogen
economy offers no possibility for enhancing world trade, because
hydrogen cannot be transported economically. But alcohol can. By
opening up the world trading system, the alcohol economy offers
the prospect a new age of global development. Half the world's
people need not remain imprisoned in poverty: their aspirations
crushed, their creative gifts strangled. They can escape. To do so,
they don't need charity, expert advice, or conde- scending
coercion. What they need is a piece of the action. The alcohol
economy will make that possible.
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Biofuels
Biofuels Good – Terrorism
Alcohol has all the positives of oil without the negatives.
OPEC currently holds the world in a stranglehold because it
controls the source of our liquid fuels. As we have seen, we can
break this critical dependence by moving to the alcohol
economy. However, petro- chemicals are currently used not just
to make fuel, but to produce plas- tics, synthetic fibers, and many
other materials that, since their advent in the mid-twentieth
century, have become vital to our civilization. If we are to truly
destroy the financial power of the terror bankers, we must find
ways to eliminate the need for oil to serve these purposes as
well. Fortunately, alcohols provide us with the means to do so.
The key starting point for the alternative synthetic chemistry is
methanol. As Nobel Prize-winning chemist George Olah has
shown, nearly every synthetic plastic currently made from
petroleum products can be efficiently produced through methanol
chemistry instead. The key processes begin by reacting methanol
with itself to form dimethyl ether via the reaction below.
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Biofuels
Biofuels Good – Environment
Ethanol is better for environment than other fuel sources.
There have also been noteworthy environmental benefits.
Ethanol- burning cars release much less sulfur dioxide, carbon
monoxide, and particulate emissions than their gasoline
counterparts, and this has resulted in a radical improvement in
air quality in many Brazilian cities. For example, according to a
2005 paper by Goldemberg, the ethanol program has cut carbon
monoxide concentrations in the air of Sao Paulo by a factor of six
and sulfur dioxide by a factor of nine rela- tive to their levels in
1980, while enabling the elimination of all pol- luting lead and
MTBE additives in the Brazilian fuel supply. The use of sugar
ethanol as automotive fuel in place of gasoline also eliminates
100 percent of the carbon dioxide greenhouse gases those cars
would otherwise contribute to the environment—or, rather, more,
since the extra electricity produced by burning bagasse also
replaces fossil fuels.
Ethanol is better for environment than petroleum fuels.

As a result of fuel leaks and spills, incomplete combustion, and fumes from
ordinary refueling operations, vast amounts of these gasoline carcinogens
and mutagens are released into our environment every day, causing an
increased incidence of cancer among the general public. The result is many
deaths and billions of dollars in healthcare costs inflicted on the nation every
year. When burned in internal combustion engines, alcohol fuels do not
produce any smoke, soot, or particulate pollution. According to the EPA, such
pollution currently causes approximately forty thousand American deaths
per year from lung cancer and other ailments. Con verting to alcohol fuels
could drastically reduce this toll.
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Biofuels
Biofuels Good – Global Warming
Ethanol is Key to check global warming
Ethanol is made from plant material and methanol can be. All fuel
so produced acts in two ways as a counter to global warming. In
the first instance, since plant material is derived from carbon
dioxide drawn from the atmosphere, burning it produces no net
C02 increase. Methanol made from natural gas that would
otherwise be vented or flared, or from municipal waste that
would otherwise be decomposed by microbes, is also global-
warming neutral. In addition, however, the very act of growing
plants acts as a powerful mechanism for active global cooling.
This is so because the leaves of plants create an enor mous
amount of surface area for the transpiration and evaporation of
water, in the process absorbing large amounts of heat from the
envi ronment. (That is why it feels cooler on a hot day to stand
on the lawn rather than the pavement.) This heat is then
incorporated into water vapor, which transports it high up into
the stratosphere When the vapor condenses, the heat is
released, and most ol u is lost to space. The promotion of
agriculture is thus the key to fighting global warming. This can
most effectively be done through the alcohol economy, which will
transfer trillions of dollars of business per year from the OPEC
terror patrons to the world's farmers.
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Biofuels
Global Warming Extensions: Now Key for Incentives
Research and development- especially commercialization- is crucial

to the energy crisis.
John P. Holdren,Teresa and John Heinz Professor of Environmental Policy and Director
of the Program on Science, Technology, and Public Policy at the Kennedy School, as well as
Professor of Environmental Science and Public Policy in the Department of Earth and Planetary Sciences at Harvard
University, “The Energy Innovation Imperative: Addressing Oil Dependence, Climate Change, and Other 21st
Century Energy Challenges,”Innovations, MIT, Spring 2006
The need for deployment of technologies of energy supply and end-use better than those that now dominate
the energy system is acute.Without an accelerated transition to improved technologies, societies will find it
increasingly difficult— and in the end probably impossible—either to limit oil imports and oil dependence
overall without incurring excessive economic and environmental costs or to provide the affordable energy
needed for sustainable prosperity everywhere without intolerably disrupting the Earth’s climate. They will not
be able to improve urban air quality while meeting growing demands for personal transportation; not be able to use
their abundant coal resources without intolerable impacts on regional air quality and acid rain; not be able to expand
the use of nuclear energy enough to make a difference for climate change and oil and gas dependence while still
reducing the risks of accidents, nuclear terrorism, and nuclear-weapon proliferation. In this context, the needed
process of innovation in energy technology must be understood as not consisting only of research and
development (R&D), but also of at least equal emphasis and resources devoted to demonstration at
commercial scale and in diverse contexts of the technological improvements that R&D have made possible
and to mechanisms to promote accelerated deployment of those demonstrated options that offer the greatest
leverage for reducing important externalities and enhancing important public goods.12 The energy-
technology-innovation “pipeline” is full of potentially valuable—even potentially crucial—technologies at every
stage of development, and it is no less important to push along toward full commercialization those that are
already close to that threshold than to be doing the applied research and early development needed to move
forward the more “far out” possibilities. Indeed, the need for rapid response to the linked oil-dependence and
climate-change challenges means that the world cannot afford to wait for such long-term possibilities as fuel-
cell-powered vehicles and fusion to come to fruition. This is not to say that that investment in such long-term
options is not essential, for it is; but it should not replace or come at the expense of the needed efforts to move
nearer-term, oil sparing, climate- friendly options into the marketplace.
Miami Debate ABJ
Biofuels
Oil Dependence Bad – Great Power Wars 1/2
Oil dependence will cause more wars soon.

Michael Meacher, Sunday June 29, 2008
(http://www.guardian.co.uk/commentisfree/2008/jun/29/oil.oilandgascompanies)
Gordon Brown meeting Britain's oil chiefs to discuss higher North Sea output to bring down prices is
prompted by oil prices hitting a record high of $135 a barrel, twice as high as a year ago and a staggering 12
times higher than a decade ago. The well-sourced website petrolprices.com is now predicting that petrol will
reach £1.50 a litre by September, just 4 months away. Jeff Rubin of CIBC World Markets is forecasting "oil prices
almost doubling over the next five years". That would mean $270 a barrel by 2013. It perhaps explains why the
government is now strongly backing BP to get a big new slice of the oil drilling licences soon to be issued in
Iraq, and – astonishingly – has now also made clear it intends to annex a third of a million square miles of the
seabed off Antarctica to pre-empt any rights to the oil it may contain. The fight for oil has begun in earnest. But
is there the oil to go round? The authoritative International Energy Agency foresees an oil supply crunch
within 5 years forcing up prices to unprecedented levels and greatly increasing western dependence on Opec.
And the oil industry itself in its own report Facing the Hard Truths about Energy, produced by 175 authorities
including all the heads of the world's big oil companies, for the first time predicted that oil and gas may run
short by 2015.
The geopolitical implications of this gathering crisis for world oil supply 2010-15 are immense. The risk of
further military interventions and conflicts in the Middle East is clearly high. Total world oil reserves are
estimated at 2.5-2.9 trillion barrels, of which half has now been already consumed, while half of the 51 oil-
producing countries reported output declines in 2006. Non-Opec production is expected to peak and decline
within the next five years, driven mainly by burgeoning demand from China and the US, together with
restricted output from Iraq. Then in the following five years Opec's diminishing spare capacity will probably
become increasingly unable to accommodate short-term fluctuations, depending on how fast world demand
grows and how extensively Opec invests in new capacity. The latter may well not raise production capacity
high enough or quickly enough, whether for political reasons or because internal decision-making is too slow
or the security environment too hostile. There are of course exits from this doom-stricken scenario, though
none is at all credible. First, discovery of major new oilfields could alter the picture. However, though billions
have been spent on the search for new fields, discovery peaked in the mid-1960s and the last big ones were
found in the 1970s. Only Iraq has undeveloped super-giant oilfields – at West Qurna, Athabascan tar sands
(from Alberta, Canada), extra-heavy oil (from the Orinoco belt in Venezuela), oil shale, and mature source rocks.
But the almost insurmountable problem is recoverability, whether poor quality oil (extra-heavy oil), poor quality
reservoirs (oil from source rocks), or both (oil shale). Worse, production may be uneconomic because of a very
low net energy gain, ie it requires almost as much energy to extract the oil as is made available for subsequent
use. And the enormous hike in greenhouse gases generated could produce a turbo climate change effect that
would wipe out any benefit from a global post-Kyoto agreement.
But even if supply constraints are ineluctable as the explosion of Chinese growth coincides with falling non-
Opec oil production and the beginnings of a slow but remorseless slippage in Opec capacity, the coming crisis
could still be eased by significant demand restrictions. Clearly there is substantial room for energy-saving when
half the energy generated every day is wasted and when propulsion of an average car is only about 20% efficient,
heating of a standard oven only 25%, and electricity generated in some power stations only some 35%. The
question, however, is whether improvement can be secured globally on the level and timescale required to
push back the crisis more than a few years.
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Biofuels
Oil Dependence Bad – Great Power Wars
Oil Dependence is leading to Great Power Wars.

Michael Meacher, Sunday June 29, 2008
(http://www.guardian.co.uk/commentisfree/2008/jun/29/oil.oilandgascompanies)
What is most disturbing of all is that the big powers, so far from seeking major adjustments
of their energy policies on either the supply or demand fronts or making a major switch
into renewables, are actually massively intensifying their competitive struggle short-term
for the limited oil reserves left. Despite an unwinnable war in Iraq, the US is still
constructing at least five large permanent military bases there in order, according to
evidence given to a US Congressional Committee, to control access to Gulf oil, including in
Saudi and Iran. As one neocon recently put it, "one of the reasons we had no exit plan from Iraq
is that we didn't intend to leave". The US is also trying to force through a new Iraqi oil law
that would give western, primarily American, oil multinationals control of Iraqi oilfields
for the next 30 years.
The US maintains 737 military bases in 130 countries under cover of the "war on terror" to
defend American economic interests, particularly access to oil. The principal objective for
the continued existence and expansion of Nato post-cold war is the encirclement of Russia
and the pre-emption of China dominating access to oil and gas in the Caspian Sea and
Middle East regions. It is only the beginning of the unannounced titanic global resource
struggle between the US and China, the world's largest importers of oil (China overtook
Japan in 2003). Islam has been dragged into this tussle because it is in the Islamic world
where most of these resources lie, but Islam is only a secondary player. In the case of
Russia, the recent pronounced stepping up of western attacks on Putin and claims he is
undermining democracy are ultimately aimed at securing a pro-western government there,
and access to Russian oil and gas when Russia has more of these two hydrocarbons
together than any other country in the world.
The struggle has also spilled over into West Africa, reckoned to hold some 66 billion barrels of
oil typically low in sulphur and thus ideal for refining. In 2005 the US imported more oil from
the Gulf of Guinea than from Saudi and Kuwait combined, and is expected over the next 10
years to import more oil from Africa than from the Middle East. In step with this, the
Pentagon is setting up a new unified military command for the continent named Africom.
Conversely, Angola is now China's main supplier of crude oil, overtaking Saudi Arabia last year.
There is no doubt that Africom, which will greatly increase the US military presence in
Africa, is aimed at the growing conflict with China over oil supplies.
As Joe Lieberman, former US presidential candidate, put it, efforts by the US and China to use
imports to meet growing demand "may escalate competition for oil to something as hot
and dangerous as the nuclear arms race between the US and the Soviet Union".
Miami Debate ABJ
Biofuels
Oil Dependence Bad – Economy
Oil independency is key to achieve a balanced global economy.

T he
invention and successful demonstration of alcohol flex-fuel
vehicles has placed in our hands the necessary tool to switch the
world off petroleum. Such a change would save Americans
hundreds of billions of dollars per year, and humanity at large
trillions per year. It would also provide the basis for a cleaner
environment and open- ended, sustainable global economic
growth that could lift billions of people out of poverty. Finally, it
would destroy the financial power that is supporting the global
spread of Islamofascism. These are tremendous benefits. But
where there are winners, there are losers, and in this case, those
who stand to lose have many billions of dollars available to use in
defense of their current privilege to loot the world. Thus it is
hardly surprising to find various absurdities being vocally
promoted in influential quarters for the purpose of deterring the
adoption of an OPEC-smashing energy policy. The two most
important of these are the hydrogen and Pimentel hoaxes. In this
chapter, we will refute both of them
Miami Debate ABJ
Biofuels
Oil Dependence Bad – Terrorism
Oil dependency threatens Western government and lives.
This brings us to the present day. America currently faces a foe
whose power rests almost exclu- sively on their control over oil. It
is the revenue from oil that is allowing Saudi Arabia to finance
the global propagation of the Islamo- fascist movement as well as
the systematic corruption of many Western governments,
including our own. It is revenue from oil that is providing Iran with
the wherewithal to develop the atomic bombs that will give its
Hezbollah terrorists—who are now expanding their operations to
the Western Hemisphere—the capacity to slaughter millions of
people. It is our dependence upon the oil controlled by such
enemy powers that is preventing us from undertaking effective
action against them. It is their control over oil vital to us that
allows the Islamists to laugh in the face of our complaints as they
teach terrorism, sharpen their nuclear knives, and call for our
doom.
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Biofuels
Oil Dependence Bad – Hegemony
Oil power is key to world dominance. Getting rid of oil as the dominant resource is key to
eliminating global competion.
<Robert Zubrin, senior engineer with the Martin Marietta Astronautics company, author,
Energy Victory, Prometheus Books, 2007>
T he
oil industry involves a great deal of money, but
fundamentally it is not about money; it is about power. For nearly
a century, control of oil has been the decisive factor determining
victory or defeat in the struggle of nations for world dominance.
If we want to win the war on terror, we need to fully understand
this very critical point.
America can’t protect itself from enemies if its still dependent on its oil.
In World War II, we controlled the oil. In this war, the enemy does.
This is an unacceptable situation, because it places our fate in the
hands of people who want to kill us. In World War II, we had no
com- punction about destroying the Nazi fuel-making facilities at
Ploesti and Leuna, or of systematically sinking the Japanese
tanker fleet— because we didn't need their oil. As we have
shown, those attacks were incredibly effective in breaking enemy
power. On May 12, 1944, the day of the Leuna raid, the Third
Reich ruled an empire comprising nearly all of continental
Europe, with a collective population and industrial potential
exceeding that of the United States. A year later, it did not exist.
Once its tanker fleet was sunk, the collapse of the Japanese
empire was almost as fast. Today we are confronted by an enemy
without a shadow of the armaments of the Axis; all they have is
oil. Were we to destroy that power, they would be left with
nothing at all. But we can't hit them where it would truly hurt,
because our economy needs their oil to survive.
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Biofuels
Oil Dependence Bad – Iranian Prolif
Cutting off oil ties with oil exporters would free U.S. from the stranglehold it is currently
in, preventing Iranian proliferation
foreign policy leaders of the Bush administration have been
reduced to impotent whining about the Iranian program in the
UN. However, the entire nuclear program could be rapidly shut
down—along with the rest of the Iranian government—by cutting
off the oil income that is paying for it. This could readily be
accomplished by launching a modest air strike on Iran's oil export
terminal on Kharg Island. Since this facility is replete with large
thin-walled tanks filled with very flammable petroleum, the
delivery of a dozen precision-guided bombs would probably
suffice to do the job. The only thing barring us from such a course
of action is the consequence to the global economy of the loss of
Iran's oil. However, if a situation could be brought about where
the world no longer needed Iranian petroleum, the task of
removing it from market would present no difficulties whatsoever.
The Saudi oil export system also has similar points of complete
vulnerability. For example, there is the giant oil terminal at Ras
Tanura, which handles some 80 percent of the Wahabbi kingdom's
exports. Another delicate spot is the oil-refining complex at
Abqaiq, which feeds Ras Tanura about 7 million barrels per day.
Some ungrateful lunatics from al Qaeda actually attempted to
take the place out with a car bomb in February 2006, so it's
probably going to be destroyed eventually no matter what we do
(which is yet another reason to make it unnecessary as soon as
possible). However, that said, were it in our interests to do so, we
could shut the place down in an afternoon.
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Biofuels
Oil Dependence Bad – Genocide
America supporting Saudi Arabia through oil prevents intervention to prevent genocide in
Darfur
For the past decade, the Saudi-backed Wahhabi Arab government
of the Sudan has been waging jihads of mass extermination, first
against the Christian and animist African population of the
nation's south, and more recently against the black non-Wahhabi
Muslims of the western region known as Darfur. Bush
administration spokesmen, including Secretary of State Con-
doleezza Rice and President Bush himself, have correctly branded
this activity as genocide, but have done nothing to stop it.
Instead they have chosen to go whining and wailing to the UN,
begging it to act. And this is despite the fact that they know in
advance that China, itself on the hook for Sudanese oil, will block
an\ resolution l<>i sanctions, let alone effective action. I have
the greatest respect for the Doctors Without Borders and similar
groups trying to do something to help the people of Darfur. But
the fact of the matter is that armed genocide cannot be stopped
by medical care. Military force is required. The Darfur genocide is
being perpetrated by government-backed Arab Janjaweed militia
traveling on horseback or in pickup trucks, supported
occasionally by the few obsolete aircraft of the Sudanese air
force. These airplanes could all be destroyed on the ground by a
single strike of carrier-based fighter aircraft or cruise missiles
launched from the Gulf of Aden, after which the Janjaweed could
be substantially smashed by a squadron of Diego Garcia-based B-
52s, armed with GPS-guided JDAM bombs, patrolling the country
for a week or two at 45,000 feet. Once that is done, the
Darfurians will be able to defend themselves. Not a single
American soldier needs to set foot in the country. George Bush
could stop the Darfur genocide with a phone call to the Pentagon
switchboard. Morality clearly demands that he do so, and under
the Genocide Treaty of 1948 (as well as because the Sudanese
government has committed acts of war against the United States
by supporting al Qaeda's bombing of our African embassies), the
legal authority for the use of force is there as well. Yet he does not
act. Why not?
Miami Debate ABJ
Biofuels
OPEC Bad
OPEC is bad and frequently illegal.
OPEC is effectively led and controlled by the Saudis. They have
this control because they are the owners of not only the largest oil
export capacity, but the cheapest. Saudi oil costs only $1.50 per
barrel to produce. This fact gives them the whip hand over all the
other OPEC members. If the other OPEC players try to cheat
against their quotas (which they all like to do once the price has
been run up), the Saudis have the ability to punish them by
expanding production to crash the price. Since their oil is so
cheap, the Saudis can still make plenty of money at $20 or even
$10 per barrel, but most of the rest would be hit hard. Thus the
Saudis enforce discipline upon the cartel. While grumbling
occasionally, the rest willingly accept this discipline because they
all know that it is necessary for the cartel to succeed in its
mission of maximizing prices. Non-OPEC nations, including
Mexico, Russia, Oman, and Norway, frequently choose to march in
accord with the Saudi tune for the same reason. This expands
OPEC power even more. It should be noted that these actions by
OPEC were, and are, illegal. Collusion by suppliers to fix prices is
not only a crime under US law, it is banned by international law
as well. The rules of the World Trade Organization (WTO) contain
antitrust provisions that prohibit member nations from setting
quota restrictions on import and exports. The WTO outlaws
conspiracies to fix markets, and permits member nations to
prosecute all parties to such conspiracies.
OPEC is mean and over-charges for oil

Consider the following: During 2005, as a result of OPEC price
fixing, Saudi Arabia's high-priced oil business reaped that
country's rulers more than $150 billion, to be spent on a
combination of profligate waste, influence buying, and terrorism.
Simultaneously, Kenya, a nation whose population of 36 million is
half again as great as that of Saudi Arabia, managed to scrape up
around $2.5 billion in export earn ings, and then had to use
these precious funds to buy overpriced but badly needed fuel
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Biofuels
(from Saudi Arabia and other OPEC bandits), with only a pittance
left to purchase farm machinery, replacement parts, and other
vital equipment. Kenya, incidentally, is not even one of the
world's fifty poorest nations.
Miami Debate ABJ
Biofuels
Solvency – Modeling/Diffusion
Development of technology allows developing countries to become exporters of cellulosic
ethanol
Daniel De La Torre Ugarte, Associate Prof. of Agricultural Economics @ Tennessee, 2005, “The
Contribution of Bioenergy to a New Energy Paradigm,”
http://www.iea.org/Textbase/work/2005/Biofuels/Biofuels_Ugarte_Paper.pdf
The use of modern technology to convert biomass into fuels and electricity in regions that now
rely heavily on traditional biomass energy – such as wood burning for cooking and heat,
especially in Africa and Latin America – opens new opportunities for development and
sustainable management of natural resources. The diversity of feedstocks that can be transformed
into useful energy offers the possibility to almost every country to develop its own unique
domestic energy industry. Combined with enhanced production practices in the agricultural and
forest sector, this would increase the viability of rural economies and reduce the exodus of rural
populations to urban areas. The many ways in which biomass feedstocks can be transformed into
energy also opens the possibility for each country to find its own strategy to take best advantage
of the resources and infrastructure available. The potential for success of a bioenergy sector is
enhanced by its ability to use the existing energy distribution system – whether in the form of
liquid fuels, gas and/or electricity. Every country with productive agricultural or forestry
activities has a stake in the success of a bioenergy sector. For international trade rules to support
the contributions of the bioenergy sector to the environment, rural development, and energy
security, there needs to be recognition of the various levels of development that different
countries have reached in the use and production of bioenergy services. VII. New Technologies
and Trade The development of innovative conversion technologies and advanced feedstocks will
eventually allow for greater productivity per unit land, at a lower cost, world-wide. These
technologies include conversion of cellulose into ethanol, and gasification of any type of raw
biomass, with the synthesis gas converted into any number of products (including synthetic bio-
diesel and bio-gasoline). As these new technologies develop, opportunities for production of
bioenergy will increase. In the near future, countries with substantial resource potential may be
in a strong position to export excess bioenergy services. Countries are already exploring the
possibility of exporting and transferring new technologies to countries that are currently lower-
cost producers of bioenergy. There may be tremendous potential, for example, for production of
advanced, cellulosic ethanol in developing countries. Continuing technical advances in existing
bioenergy production also present an important avenue for technology exports. In order for
technology trade to flourish, a robust domestic bioenergy infrastructure must be established in
many countries, opening the door to bioenergy services trade.
Miami Debate ABJ
Biofuels
2AC Add-on: Dead Zone
Excessive corn use increases nitrogen runoffs to the Gulf of Mexico
Runge and Senauer 2007, C. Ford Runge is Distinguished McKnight University Professor of Applied
Economics and Law and Director of the Center for International Food and Agricultural Policy at the University of
Minnesota. Benjamin Senauer is Professor of Applied Economics and Co-director of the Food Industry Center at the
University of Minnesota, May/June 2007, “How Biofuels Could Starve the Poor,” Foreign Affiars, Vol. 86, Issue 3,
Ebsco
Should corn and soybeans be used as fuel crops at all? Soybeans and especially corn are row
crops that contribute to soil erosion and water pollution and require large amounts of fertilizer,
pesticides, and fuel to grow, harvest, and dry. They are the major cause of nitrogen runoff--the
harmful leakage of nitrogen from fields when it rains-- of the type that has created the so-called
dead zone in the Gulf of Mexico, an ocean area the size of New Jersey that has so little oxygen it
can barely support life. In the United States, corn and soybeans are typically planted in rotation,
because soybeans add nitrogen to the soil, which corn needs to grow. But as corn increasingly
displaces soybeans as a main source of ethanol, it will be cropped continuously, which will
require major increases in nitrogen fertilizer and aggravate the nitrogen runoff problem.
Widened dead zone hurts fisheries

Elizabeth Carlisle, 1/5/2000, “The Gulf of Mexico Dead Zone and Red Tides,”
http://www.tulane.edu/~bfleury/envirobio/enviroweb/DeadZone.htm
The blooms present in the Dead Zone are primarily nontoxic, and therefore pose no direct threat
to other marine organisms and humans. Indirectly, however, they cause conditions that lead to
oxygen depletion, making the Gulf uninhabitable for other organisms, and leading to social and
economic loss for humans. The Gulf of Mexico yields approximately forty percent of annual
U.S. commercial fishing, as well as being home to many recreational fishing activities. There is
growing concern over the safety of seafood as a result of the contamination and chemical
pollution of fishing waters. One half of the shellfish producing areas along the gulf coast have
either been permanently closed or declared indefinitely off-limits by health officials as a result of
pollution. The same concerns have caused the closure of many oyster beds. Raw shellfish, such
as oysters, clams, and mussels, are at the greatest risk for contamination by bacteria and viruses
from pollution. Direct costs include adverse health effects and lost sales of fish and shellfish
products, but there are also indirect costs, such as restricted development or investment decisions
in coastal aquaculture due to the potential for algal blooms. Commercial and recreational
fisheries in the gulf generate 2.8 billion dollars annually. This industry could be seriously
affected by reduced food sources for fish and shrimp in hypoxic waters, which would lead to a
reduction in the abundance of fish and shrimp and declines in shrimp catch and catch efficiency
due to the expansion of hypoxia.
This damages the overall US economy

Derek J. Dostal, J.D. Candidate – University of Pennsylvania Law School, “The World Trade
Organization At A Crosswords: Comment: Global Fisheries Subsidies: Will The WTO Reel In
Effective Regulations?”, University of Pennsylvania Journal of International Economic Law,
Winter 2005, 9336 U. Pa. J. Int'l Econ. L. 815, Lexis
The commercial fishing industry is a significant part of many countries' economies. 25 In the
United States, for example, the commercial fishing industry contributes $ 28 billion to the U.S.'s
gross national product. 26 As a result of this positive impact on its economy, the U.S. has
directed considerable resources toward carefully considering and creating sound ocean policy. 27
Miami Debate ABJ
Biofuels
2AC Add-on: Malaysian Forests
Ethanol destroys Malaysian forests, causing massive extinction and biodiversity loss
George Monbiot, The Guardian, 12/6/2005, “The most destructive crop on earth is no solution to
the energy crisis,” http://www.guardian.co.uk/print/0,3858,5349045-103677,00.html
Last week, the chairman of Malaysia's federal land development authority announced that he was
about to build a new biodiesel plant. His was the ninth such decision in four months. Four new
refineries are being built in Peninsula Malaysia, one in Sarawak and two in Rotterdam. Two
foreign consortiums - one German, one American - are setting up rival plants in Singapore. All of
them will be making biodiesel from the same source: oil from palm trees. "The demand for biodiesel,"
the Malaysian Star reports, "will come from the European Community ... This fresh demand ... would, at the very
least, take up most of Malaysia's crude palm oil inventories." Why? Because it is cheaper than biodiesel made from
any other crop. In September, Friends of the Earth published a report about the impact of palm oil production.
"Between 1985 and 2000," it found, "the development of oil-palm plantations was responsible for an estimated 87
per cent of deforestation in Malaysia". In Sumatra and Borneo, some 4 million hectares of forest have been
converted to palm farms. Now a further 6 million hectares are scheduled for clearance in
Malaysia, and 16.5 million in Indonesia. Almost all the remaining forest is at risk. Even the
famous Tanjung Puting national park in Kalimantan is being ripped apart by oil planters. The
orangutan is likely to become extinct in the wild. Sumatran rhinos, tigers, gibbons, tapirs,
proboscis monkeys and thousands of other species could go the same way. Thousands of
indigenous people have been evicted from their lands, and some 500 Indonesians have been
tortured when they tried to resist. The forest fires which every so often smother the region in
smog are mostly started by the palm growers. The entire region is being turned into a gigantic vegetable oil
field. Before oil palms, which are small and scrubby, are planted, vast forest trees, containing a much greater store of
carbon, must be felled and burnt. Having used up the drier lands, the plantations are moving into the swamp forests,
which grow on peat. When they've cut the trees, the planters drain the ground. As the peat dries it oxidises, releasing
even more carbon dioxide than the trees. In terms of its impact on both the local and global environments, palm
biodiesel is more destructive than crude oil from Nigeria.
Malaysian biodiversity key to long-term global biodiversity

Phillip Levin and Donald Levin, Scientific Research Society, Jan-Feb 2002, “The Real
Biodiversity Crisis,” American Scientist, Vol 90, Number 1, Page 6,
http://www.americanscientist.org/issues/id.3270,y.0,no.,content.true,page.1,css.print/issue.aspx
So people's activities today affect more than just the tally of species that may go extinct soon: Our actions will also influence the
diversity of species that can evolve and persist for millions of years to come. Conservation efforts,
therefore, should aim to do more than stem the near-term loss of species. Resources should be directed to ensuring that there will be a rebound in
the diversity of plant and animal species, not just in their numbers. How might one do that? One response to the current crisis is the preservation
of biodiversity "hotspots," areas with exceptionally large numbers of endemic species. But a narrow focus on saving the greatest number of
species possible risks losing important biological attributes. To minimize this problem, higher-level
taxa, such as families, should be
used in defining biodiversity hotspots and setting conservation priorities. Consider, for example, tropical
plants. Ghillean Prance at the Royal Botanical Gardens, Kew, has noted that Malesia—the tropical region running from
peninsular Malaysia to Papua New Guinea and the Solomon Islands—contains fewer plant species but
more plant families than the entire neotropics. Because the number of families probably provides
a better measure of the diversity of characteristics and evolutionary potential than does the
number of species, preserving the flora of Malesia should be of considerable concern to
conservationists interested in maintaining a high degree of biodiversity over the long haul. After the
current spasm of extinction ends, the number of species may well return to past levels, but there will surely be fewer higher-level taxonomic
groups than today. Such a wholesale shift in earth's biota will impoverish the planet for many millions of years to come. In our view, this is the
real threat to biodiversity—not a decline in species per se, but a long-term erosion in the variety of
biological characteristics and functions that grace the natural world.
Miami Debate ABJ
Biofuels
2AC Add-on: Malaysian Forests
BIODIVERSITY LOSS CAUSES EXTINCTION
RACHEL’S ENVIRONMENT & HEALTH NEWS, THE FOUR HORSEMEN -- PART 2: LOSS OF BIODIVERSITY,
December 1995, p. http://www.rachel.org/bulletin/bulletin.cfm?Issue_ID=651)
Extinctions are dangerous for humans, but it is not immediately clear just how dangerous. In their 1984 book, EXTINCTION,
Paul and Anne Ehrlich compare our situation to an airplane held together by rivets. As time goes
on, an occasional rivet will pop out. No single rivet is essential for maintaining flight, but
eventually if we pop enough rivets, a crash seems certain to occur. So it is with humans and the
other species with whom we share the planet. No single species is essential to our well being, yet it is
certain that we need biological diversity in order to survive. Therefore each time we diminish
diversity, we take another irreversible step toward the brink of a dark abyss. In the process, we desecrate
the wondrous works of the creator.
Miami Debate ABJ
Biofuels
2AC Add-on: Amazon Deforestation
A) Farm-grown fuels cause of destruction of Amazon – causes Global Warming.

Michael Grunwald, “The Clean Energy Scam,”TIME Magazine,Vol. 171 Issue 14, p40-45,
4/7/2008
From his Cessna a mile above the southern Amazon, John Carter looks down on the destruction of the world's
greatest ecological jewel. He watches men converting rain forest into cattle pastures and soybean fields with
bulldozers and chains. He sees fires wiping out such gigantic swaths of jungle that scientists now debate the
"savannization" of the Amazon. Brazil just announced that deforestation is on track to double this year;
Carter, a Texas cowboy with all the subtlety of a chainsaw, says it's going to get worse fast. "It gives me goose
bumps," says Carter, who founded a nonprofit to promote sustainable ranching on the Amazon frontier. "It's like
witnessing a rape."
The Amazon was the chic eco-cause of the 1990s, revered as an incomparable storehouse of
biodiversity. It's been overshadowed lately by global warming, but the Amazon rain forest happens
also to be an incomparable storehouse of carbon, the very carbon that heats up the planet when it's
released into the atmosphere. Brazil now ranks fourth in the world in carbon emissions, and most
of its emissions come from deforestation. Carter is not a man who gets easily spooked--he led a
reconnaissance unit in Desert Storm, and I watched him grab a small anaconda with his bare hands in Brazil--but he
can sound downright panicky about the future of the forest. "You can't protect it. There's too much money to be
made tearing it down," he says. "Out here on the frontier, you really see the market at work."
This land rush is being accelerated by an unlikely source: biofuels. An explosion in demand for
farm-grown fuels has raised global crop prices to record highs, which is spurring a dramatic
expansion of Brazilian agriculture, which is invading the Amazon at an increasingly alarming rate.
Propelled by mounting anxieties over soaring oil costs and climate change, biofuels have become the
vanguard of the green-tech revolution, the trendy way for politicians and corporations to show they're serious
about finding alternative sources of energy and in the process slowing global warming. The U.S. quintupled its
production of ethanol--ethyl alcohol, a fuel distilled from plant matter--in the past decade, and Washington has just
mandated another fivefold increase in renewable fuels over the next decade. Europe has similarly aggressive biofuel
mandates and subsidies, and Brazil's filling stations no longer even offer plain gasoline. Worldwide investment
in biofuels rose from $5 billion in 1995 to $38 billion in 2005 and is expected to top $100 billion by
2010, thanks to investors like Richard Branson and George Soros, GE and BP, Ford and Shell, Cargill and the
Carlyle Group. Renewable fuels has become one of those motherhood-and-apple-pie catchphrases, as
unobjectionable as the troops or the middle class.
B) Destruction of the Amazon causes human extinction

David Takacs, THE IDEA OF DIVERSITY: PHILOSOPHIES OF PARADISE, 1996, p. 200-1.
So biodiversity keeps the world running. It has value and of itself, as well as for us. Raven, Erwin, and Wilson oblige us to
think about the value of biodiversity for our own lives. The Ehrlichs’ rivet-popper trope makes this same point; by eliminating rivets, we play
Russian roulette with global ecology and human futures: “It
is likely that destruction of the rich complex of species
in the Amazon basin could trigger rapid changes in global climate patterns. Agriculture remains
heavily dependent on stable climate, and human beings remain heavily dependent on food. By the
end of the century the extinction of perhaps a million species in the Amazon basin could have entrained
famines in which a billion human beings perished. And if our species is very unlucky, the famines could lead
to a thermonuclear war, which could extinguish civilization.” Elsewhere Ehrlich uses different particulars with no
less drama: What then will happen if the current decimation of organic diversity continues? Crop yields will be more difficult to maintain in the
face of climatic change, soil erosion, loss of dependable water supplies, decline of pollinators, and ever more serious assaults by pests.
Conversion of productive land to wasteland will accelerate; deserts will continue their seemingly inexorable expansion. Air pollution will
increase, and local climates will become harsher. Humanity will have to forgo many of the direct economic benefits it might have withdrawn
from Earth's wellstocked genetic library. It might, for example, miss out on a cure for cancer; but that will make little difference. As ecosystem
services falter, mortality from respiratory and epidemic disease, natural disasters, and especially famine will lower life expectancies to the point
where cancer (largely a disease of the elderly) will be unimportant. Humanity
will bring upon itself consequences
depressingly similar to those expected from a nuclear winter. Barring a nuclear conflict, it appears that civilization
Miami Debate ABJ
Biofuels
will disappear some time before the end of the next century - not with a bang but a whimper.
Miami Debate ABJ
Biofuels
States 2AC 1/2
Insuring investors at the state level puts the responsibility for oversight on the
INCOMPETENT N.A.I.C (National Assoc. of Insurance Commissioners)- This fact
undermines all the evidence for insuring through the states.
Susan Randall, Associate Professor, University of Alabama School of Law. J.D., “INSURANCE
REGULATION IN THE UNITED STATES: REGULATORY FEDERALISM AND THE NATIONAL
ASSOCIATION OF INSURANCE COMMISSIONER,” 26 Fla. St. U.L. Rev. 625, 1999.
Scholarly writing on insurance regulation generally supports state regulation of insurance but fails to
account fully for the NAIC's centralizing and enabling role in the state system. In the 1960s, Spencer L.
Kimball wrote on the purposes of insurance regulation in well-regarded articles and a book. He examined the
n256
processes of state regulation and concluded that state regulation is appropriate, but he did not address the NAIC
in any detail. Kenneth J. Meier produced [*669] an award-winning analysis of the politics of insurance
regulation in 1988. The book is a response to interest-group theories of regulation first articulated in the
n257
1970s, and concludes, contrary to the claims of those theories, that insurance regulation is not dominated by
n258
the industry. Meier articulates two basic reasons for his conclusion: the size and diversity of the industry itself
suggests that monolithic industry domination is unlikely, and the dispersion of regulatory authority among the
states (and to a much lesser extent, the federal government) suggests that domination would be very difficult.
Both factors, in Meier's assessment, make interest-group domination unlikely. As this Article has demonstrated,
the NAIC's role as a central regulatory body significantly undercuts Meier's reasoning. The history of the NAIC
and, in particular, its continuing failure to enhance market conduct regulation or adopt market conduct
accreditation standards demonstrates that the industry has utilized its power jointly to influence and even direct
the NAIC's actions. Finally, in their important analysis of insurance regulation, Jonathan R. Macey and Geoffrey
P. Miller conclude that insurance regulation is not subject to systematic bias in favor of either the industry or
consumers and that federal regulation is thus not necessary to correct problems in the state regulatory structure.
Although federal regulation may not be necessary to guarantee effective regulation of the insurance industry,
n259
the history of the NAIC suggests, contrary to Macey and Miller's conclusions, a systematic bias in favor of the
industry. In short, the literature, although illuminating in many ways, is critically flawed by its insufficient
recognition of the important and often enabling role of the NAIC in the system of insurance regulation and the
opportunities for industry participation in and control of the NAIC's functions.
States 2AC 2/2
State regulation of insurance empirically fails for many reasons.

The controversies surrounding the spate of insurer insolvencies in the 1980s mirror the pattern of controversy
and promises of reform [*642] that surrounded South-Eastern Underwriters and McCarran-Ferguson and
illustrate the substantial problems with state insurance regulation and the NAIC's role. In the late 1980s, a series
of large property and casualty insurer failures prompted congressional criticism of state regulation of
n95
insurance and congressional proposals for federal takeover of insurance regulation. Thereafter, the U.S. General
Accounting Office (GAO) produced a series of investigative reports, and the House Energy and Commerce
n96
Committee's Subcommittee on Oversight and Investigations conducted numerous hearings. These efforts are
n97
illustrated in a sharply critical report entitled Failed Promises: Insurance Company Insolvencies. According to
n98
the report, both insurance companies and regulators were to blame for insolvencies:
[The] many similarities and common elements among the insolvent companies . . . included rapid
expansion, overreliance on managing general agents, extensive and complex reinsurance arrangements,
excessive underpricing, reserve problems, false reports, reckless management, gross incompetence,
fraudulent activity, greed, and self-dealing. There were also similar failures of state regulators and
independent audit firms to identify and correct such problems before they got out of control.
States empirically can’t detect insolvency- leaving investors unprotected.

Congress criticized many specific state regulatory practices. State solvency regulators relied on annual financial
statements filed by insurers and periodic field examinations. Most states did not require independent
verification of annual statements, field examinations [*643] occurred only every three to five years, and
n100 n101
some states did not conduct mandatory field examinations at all. Regulators limited the scope of
n102
examinations to the company actually licensed by the state and excluded oversight of managing general agents,
holding companies, and affiliated entities. Furthermore, most states did not require actuarial certification
n103
of loss reserves. One-half of the states did not have actuaries participating in field examinations. The
n104 n105
NAIC's Insurance Regulatory Information System (IRIS), designed to assist the states in monitoring
solvency, failed to eliminate these problems because it also relied on the use of unaudited annual
statement information. Time lags in getting financial information contributed to the problems.
n106
Regulators had no means of detecting financial difficulties occurring early in a calendar year until well
into the next calendar year. Many state insurance departments lacked adequate funding to conduct
n107
solvency examinations; state governments allocated only an average of 0.063% of their total budgets to
regulating insurance and utilized only an average of 5.37% of premium taxes received from insurance
companies to regulate insurance.
Page 27 of 43
States Fail: Inefficient
State Regulation requires multiple filings- crushing efficiency.

Alistair Barr, “Federal insurance regulation proposed again,” MarketWatch March 31, 2008.
The U.S. Treasury said on Monday that a federal insurance regulator should be set up and overseen by an Office
of National Insurance within the Treasury. As an intermediate step, Congress should also establish a federal
Office of Insurance Oversight within Treasury to establish a federal presence in insurance for international and
regulatory issues. "These reforms would provide more effective, efficient, and consistent regulation for national
insurers and would enhance product choice and innovation," the Treasury said. Such steps would let insurers
chose whether they want to be regulated at federal or state level. Currently, the industry is only regulated on a
state-by-state basis, Newsome explained. "Big insurers would likely benefit because there may be uniform
codes for filing policy forms and getting licensed," the analyst said. "If you're a life insurer and want to change
a feature on a policy, you have to go to 50 different states at the moment. Every state gets to approve policies
individually. This change would cut costs and allow for more consistency of coverage." But some types of
coverage, such as liability insurance, suit state-by-state regulation because policies have exclusions based on
different state laws, Newsome added.
Federal Insurance is more efficient.

Alistair Barr, “Federal insurance regulation proposed again,” MarketWatch March 31, 2008.
The American Insurance Association, a lobbying group for some big companies in the industry, supports federal
regulation. "Providing insurers with the option of a single regulator for insurance will benefit consumers and
will be more efficient, effective and rational given the 'increasing tension' a state-based regulatory system
creates," Marc Racicot, president of the AIA, said in a statement. Still, others said the current proposal for a
federal insurance regulator wouldn't protect policyholders.
Federal involvement is crucial to the credibility of insurance regulation.

State regulators' support for continued state regulation may be viewed pejoratively as demonstrating extreme
self-interest or more neutrally as demonstrating confidence in the ability of the state system to provide effective
regulation. Comments of some former state regulators suggest that self- interest may play at least some role.
Several months after his tenure as Maryland insurance commissioner ended, Dwight K. Bartlett, III, publicly
advocated federal intervention in insurance regulation. Although he identified areas in which he believed federal
regulators could not perform as well as the states, such as the handling of consumer complaints, he concluded
n336
that some federal insurance regulation was necessary to achieve consistent and coordinated regulation of a
national industry and to prevent insurance company "shopping" for the least intrusive state regulation. J.n337
Robert Hunter, former Texas commissioner, also called for a federal role in insurance regulation, noting
several trends he believed necessitated federal intervention: the insurance industry's control over the
NAIC, the internationalization of insurance, the increasing size of insurance companies following
numerous mergers, and the integration of segments of the financial services industry.
Page 28 of 43
Federal Preemption
No Net benefit- the federal government would just preempt the CP.
David A. Kessler, “INVESTOR CASUALTIES IN THE WAR FOR MARKET EFFICIENCY,” former
Commissioner of the Food and Drug Administration, Administrative Law Journal Winter, 1996, 9 Admin. L.J.
Am. U. 1307.
"There is commonly less money, less wisdom, and less good faith, than men do account upon." It is essential for
the survival of the securities investor, and for the preservation of the securities markets, that investor protection
exist at both the state and federal levels. The resultant dual system of protection, however, contributes
extensively to many of the problems that plague investor protection legislation. One key contributor to this
malady appears to be the long-standing congressional policy toward establishing an efficient national market in
securities. At the state level, the recently revised Article 8 of the Uniform Commercial Code (UCC)
n5 n6
impliedly delegates significant portions of investor protection to the federal government. Unfortunately, the
n7
federal system of investor protection, which suffers from intermittent complexity and unpredictability, n8
is unable to absorb any additional responsibilities relinquished by the states for protecting investors.
Despite the inability of the federal government to handle the load, Congress expanded its general trend
toward preempting state-level consumer protection laws to include state investor protection statutes.
Specifically, Congress granted the Securities and Exchange Commission (SEC) permission to preempt
state investor protection statutes that the agency believes would impede a national system of securities
settlement from operating safely and efficiently.
Page 29 of 43
States Fail at Investor Protection
State insurance regulation fails- they lack the ability to protect investors.
David A. Kessler, “INVESTOR CASUALTIES IN THE WAR FOR MARKET EFFICIENCY,” former
Commissioner of the Food and Drug Administration, Administrative Law Journal Winter, 1996, 9 Admin. L.J.
Am. U. 1307.
State law has few regulatory safeguards designed to protect investors who hold their securities throughn12
broker-dealers. In fact, the Revised Article 8 includes two specific provisions that appear to strip essential
n13
state-level protection for investors. First, Revised UCC Section 8-503(e) protects purchasers of securities,
n14 n15
even where those purchasers took such securities with knowledge that certain customers of the broker-dealer
had "securities entitlements" in the identical securities purchased. Second, Revised UCC Section 8-207(a)
n16 n17
relieves corporate issuers of responsibility to beneficial owners who hold securities through a third party,
n18
such as a broker-dealer, and are not owners of record with the issuer. These state-level absolutions only
exacerbate the problems the federal government has in protecting investors, resulting from the federal
government's inability to examine effectively the books and records of securities intermediaries in time to
offset any harm caused to investors. At the same time, the SEC fails to promote effective investor
n19
protection regulations, preferring instead to adopt new rules encouraging a more efficient securities market. n20
These trends place a significant strain on the industry's investor protection institution, the Securities Investor
Protection Corporation (SIPC).
Page 30 of 43
Federal Insurance Interventions Common
There are lots of areas where the federal government gets involved in insurance.
Lucien J. Dhooge, Associate Professor of Business Law- University of the Pacific, “A PREVIOUSLY
UNIMAGINABLE RISK POTENTIAL: SEPTEMBER 11 AND THE INSURANCE INDUSTRY,” 40 Am.
Bus. L.J. 687.
There is precedent for federal intervention in the U.S. private insurance market. For example, pursuant to the
Atomic Energy Damages Act of 1957, operators of nuclear reactors are required to obtain insurance in the
private market to the maximum amount available and capitalize a secondary insurance fund. n483 There is
implicit government financial backing for accidents in which the damages exceed the combined limits of private
insurance and the secondary fund. n484 In addition, for the past thirty-one years, the federal government has
provided political risk insurance to facilitate private investment by U.S. businesses in developing countries
through [*766] the Overseas Private Investment Corporation. n485 The federal government also provided
federal reinsurance for damages caused to property located in urban areas as a result of riots and civil disorder.
Established by the Housing and Urban Development Act of 1968, the National Insurance Development Program
encouraged state regulators and private insurers to make property and casualty insurance available for such
properties. n486 Until its discontinuance in 1984, private insurers writing policies upon such properties could
elect to purchase federal reinsurance and thereby transfer the vast majority of the risk associated with urban
disturbances to the federal government. n487 Finally, through authority granted by the National Flood Insurance
Act, the federal government funds the National Flood Insurance Program. n488 This program offers federally
backed flood insurance to property owners residing in communities that join the program.
Page 31 of 43
Can’t Fiat the NAIC
The NAIC is a private organization.

The tasks performed by the NAIC also illustrate the increasing nationalization of insurance regulation. In
addition to performing basic regulatory functions itself, the NAIC supports, coordinates, and, on some
occasions, even directs state regulators. The NAIC performs centralized duties that mirror those of federal
n67
regulators in other industries, including the prescription of standard forms for insurance company annual
financial statements; the coordination of [*637] regional financial examinations of insurance companies;
n68 n69
the creation and maintenance of an extensive system of national databases to facilitate state monitoring of
insurers and insurance agents; the rating of non-U.S. insurers for the states; the periodic review and
n70 n71
accreditation of state insurance departments; the drafting of model laws and regulations, many of which have
n72
been adopted by state legislatures; the valuation of insurance company invest- [*638] ments; training of
n73 n74
state insurance regulators; the preparation of statistical reports for state regulators; the assistance to state
regulators with technical financial analysis; and the assistance to U.S. officials negotiating international trade
agreements that concern insurance issues. In the midst of this expansion of its activities, staff, and funding, the
NAIC has suffered something of an identity crisis. In 1995 the NAIC officially defined itself as a private trade
organization. Around the same time, Robert M. Willis, District of Columbia insurance commissioner,
n76
described the NAIC as a "trade organization" and distinguished his role as a public official from his role as a
member of the NAIC. Similarly, in a 1994 opinion, U.S. District Judge Peter Leisure stated that the NAIC
n77
was not a government body but "a private trade association composed of government regulators from different
states." None of these self-definitions squared with the NAIC's active and central role in the processes of state
insurance regulation. In 1995, at the urging of some NAIC members, and in particular James Schacht, acting
Illinois insurance commissioner, an NAIC working group prepared a written report discussing the NAIC's
status. The group split over whether the NAIC was "a group of public officials imbued with the public trust" or
"an instrumentality of the states." The membership of the NAIC ultimately concluded that it had
n79
characteristics of both. Schacht stated, "At least we know we are not a trade organization."
n80 n81
Regardless of the NAIC's difficulties defining itself, it is clear that the NAIC is a private rather than a
governmental entity. This status carries two important implications: first, the NAIC has no power to compel the
states or the industry, and second, the NAIC is a com- [*639] pletely self-governing entity, neither accountable
to voters nor subject to government oversight. Thus, although the NAIC has assumed a central and national role
in insurance regulation, acting in many ways as a federal agency, it cannot sanction regulators or insurers, and it
is not subject to various mechanisms designed to ensure fair and open regulatory policy making and processes,
including the Administrative Procedure Act of 1966, the Federal Advisory Committee Act, the Freedom of
n82 n83
Information Act (FOIA), the Government in the Sunshine Act, the Paperwork Reduction Act of 1980, or
n84 n85 n86
the state law analogues.
Page 32 of 43
States Fail: Insurance Licensing
States empirically fail to secure investments.

Congressional investigators also identified state laws on insurance company licensing and initial capital
requirements as seriously deficient. Capital and surplus requirements were very low, bearing no
relationship to the risks underwritten by an insurance company. Background checks of those applying
n109
for licenses were inadequate in many states and nonexistent in others. Typically, state commissions did not
n110
verify information of applications and only checked their own records for insurance violations. Failures to
n111
enforce regulations also contributed to insurance company insolvencies. According to the congressional
n112
reports, state regulators generally did not punish violators of state insurance laws and regulations. They were lax
in prosecuting insurance violations, "perhaps because such cases were difficult to document and prove." n113
State accreditation fails… their review process is fundamentally inadequate.

Although the accreditation standards addressed many of the concerns articulated by critics of state
solvency regulation, such as requiring independently audited financial examinations and annual
regulatory examinations, with priority to troubled companies, they fell short in the view of many.
Criticisms focused on several areas: the lack of specificity in the standards, the absence of market
conduct standards, deficiencies in the accreditation review process, and the inability of the NAIC to force
compliance with the standards.
A basic criticism leveled against the standards was their lack of specificity. Several examples will illustrate. The
NAIC standards specified sufficient resources to conduct necessary financial examinations, but did not specify
what would qualify as sufficient. In contrast, accreditation standards that were suggested by the Consumer
Insurance Interest Group (CIIG) and the National Association of Professional Insurance Agents (PIA National)
specified a minimum of ten percent of premium taxes for insurance department funding. [*647] The NAIC's
n126
capital and surplus standard stated that departments should have the ability to require minimum levels of capital
and surplus but did not specify what those minimums should be. Similarly, standards requiring adoption of
n127
model laws allowed the states to substitute "substantially similar" laws.

The accreditation program was also deficient in its failure to specify standards for market conduct
regulation. From the outset of the NAIC's accreditation program, and even before, regulators discussed
and proposed market conduct standards for accreditation. It is clear that market conduct affects an
insurer's bottom line.
Page 33 of 43
States Fail: Insurance Licensing
Accreditation of insurance companies at the state level fails- they have

inadequate procedures.
The accreditation review process was also a target of criticism. The GAO criticized the process for its lack
of documentation and procedural requirements. For example, in 1990 the accreditation teams sent to
n133
Florida and New York produced review reports consisting of only one-half page and recommended
accreditation "based on this evaluation effort and the knowledge and experience of the evaluation team." n134
Neither report documented the team's findings or recommendations. The GAO also criticized the NAIC's
accreditation of numerous states: South Carolina, alleging that it occurred primarily "on the basis of discussions
with state regulatory personnel about how they intended to use the new authority and how they might have used
it in the past had it been available;" Wisconsin, alleging that it had not examined certain insurers for eight to ten
years and had not adopted required standards for companies in hazardous financial condition; Iowa, which had
insufficient staff in 1991 to review all of the annual statements it received; Ohio, which lacked specialists to
review actuarial analyses and reinsurance; and Kansas, which had no expertise in casualty actuarial or computer
audits, among others. Finally, the GAO questioned the accreditation teams' abilities to assess
n135
implementation of regulations quickly adopted for purposes of accreditation, citing the example of
Florida when the Department of Insurance adopted required regulations weeks before the accreditation
review through emergency rulemaking procedures.
State regulation of insurance fails- there’s not enough funding for enforcement
Several lessons can be derived from the accreditation controversy. Most importantly, the accreditation program
demonstrates the needs for state regulation reform and for the centralization of at least some aspects of
insurance regulation. The accreditation program was initiated with the cooperation of the states and the industry,
as well as the tacit cooperation of federal legislators because they all recognized the critical deficiencies in the
state regulatory system. The problems with state regulation were viewed to be serious, requiring sustained
attention, and only some measure of uniformity could accomplish necessary reform.
Second, as the review of the NAIC's accreditation program illustrates, these problems have not been fully
addressed by the program. The required model laws and procedures are susceptible to criticism based on
their content, and even where they afford state regulators additional authority, funding inadequacies,
n221
which were not addressed by the accreditation program, may preclude effective use of that authority. Average
state insurance department funding is approximately six percent of premium taxes. The CIIG suggests ex-
n222
[*661] penditures of at least ten percent of premium taxes, and the Risk Insurance Management Society
n223
suggests funding levels of at least twenty-five percent of premium taxes. In short, although the
n224
accreditation program had the potential to ameliorate inadequate and ineffective state level regulation, it
has largely failed.
Page 34 of 43
NAIC Fails- Corruption
The NAIC fails- they are captive to special interests.
Third, just as the serious and systemic regulatory problems indicated by these examples demonstrate the failures
of the NAIC's accreditation program, the reasons for the failures are evident from the history of the NAIC's
accreditation program. The preceding account of the NAIC's accreditation program reveals the NAIC's lack of
power and its susceptibility to influence. Despite the NAIC's central role as an accreditor of state regulators, it
had no power to force states to conform to accreditation standards or to sanction them for failure to do so.
The accreditation controversy also provides proof of the NAIC's remarkable susceptibility to outside
pressures, particularly those exerted by the insurance industry. Abetted by individual state legislators
and regulators, many of whom have ties to the industry, the industry waged a successful campaign to
n232
weaken accreditation standards and to avoid enhanced market conduct regulation through the
accreditation program. Sustained public criticism, withholding of essential operating funds assessed by the
NAIC against various companies, and informal lobbying and participation in the NAIC's proc- [*663] esses
accomplished the industry's objectives. Despite the NAIC's avowed commitment to protecting consumers, its
long study of market conduct initiatives, and its recognition of the interrelationship between market conduct and
solvency, the NAIC failed to adopt market conduct accreditation standards.
NAIC fails- reforms didn’t solve.
A recent class action suit against Prudential Insurance Company provides further evidence of the need for
enhanced market conduct regulation. More than eight million claimants from all fifty states and the District of
Columbia alleged fraudulent and deceptive sales practices against Prudential. The first exposure of
n234
Prudential's illegal activities began early in 1994 when the first lawsuits were brought against it. The New
n235
Jersey insurance commissioner organized the Multi-State Task Force on April 25, 1995, to conduct an
examination of Prudential's sales practices. The Task Force issued its report in July 1996 and cited
n236
widespread evidence of fraudulent sales practices by agents, evidence of management's knowledge of those
practices, and failure to investigate or discipline violators. State regulators failed to detect ongoing,
n237
widespread fraud and failed to act until prompted by the plaintiff's bar and the media exposure of Prudential. n238
Finally, the accreditation program itself suggests that the NAIC's efforts are often a matter of form rather than
substance. The NAIC's purpose of avoiding federal regulation is explicitly stated. Furthermore, the NAIC has
n239
accredited the weakest insurance departments in the nation while denying accreditation to one of the strongest-
New York. It is hard to avoid the conclusion that the accreditation program was and is directed
n240
primarily at maintenance of the state regulatory system rather than at effective state-level protection of
consumers. Thus, although the NAIC's attempts have contributed to the preservation of the state
n241
system, the NAIC has not eliminated the problems that originally prompted federal inquiries.
Page 35 of 43
NEG: Reg Change Bad
Changing the regulatory regime is costly- should leave it to the states.

The federalist argument for state regulation relies primarily on the presumption favoring state regulation
created by the original delegation of limited power to the national government by the states. The federalist
argument for state regulation of insurance relies on the presumption that the states have sole power to regulate
unless that power was delegated to the federal government. Favorable reasons for the of state regulation of
n242
the insurance industry include [*665] each of the classic federalist arguments: (1) increased opportunities
n243
for citizen participation in government; (2) proximity to the citizenry and to the relevant issues and increased
n244
responsiveness as compared to a distant central administrator, particularly since insurance is a "local"

n245
business; (3) encouragement of healthy diversity and opportunities for experimentation with regulatory
n246
structures and content; and (4) enhancement of democracy and liberty by widely dispersing decision-making
n247
power and the provision of checks on various levels of government. These factors may provide grounds for
n248
continued state regulation. For example, according to Richard E. Stewart, a former New York insurance
commissioner:
[A] final and unique advantage of state regulation is that the national alternative always hangs over it. The state
agencies are subject to review, investigation and embarrassment by the Congress and others in the national
government. Congress always has the power to abolish us if it finds us incorrigible; we all know it and it
concentrates the mind wonderfully. n249
Finally, maintenance of the status quo provides an additional rationale in favor of continued state
regulation. The long history of state regulation carries with it incentives to protect the states' long-term
investments in their regulatory systems (in terms of expertise, reputation, and human capital). A change in
regulatory regimes carries substantial costs; in the absence of compelling reasons for change,
continuation of existing systems seems appropriate.
Page 36 of 43
NAIC Bad- Undermines State Solvency
The NAIC destroys the benefits to insurance regulation at the state level.
Particularly following a resurgence of constitutional federalism as a constraint on national power in the

Supreme Court's jurisprudence, commentators have begun to question and criticize these federalist
n251
rationales on a theoretical level. Regardless of their validity, many of them do not apply to the
n252
federalist system of state insurance regulation, largely due to the NAIC's role, and thus cannot explain or
defend the persistence of the state insurance regulatory system. In many ways, the NAIC's structures and
functions undercut each of the classic federalist rationales. By performing important policy-making
functions as a central regulatory body and by attempting to force state conformance to various
regulatory choices, the NAIC minimizes the related federalist values of states' responsiveness to local
concerns and opportunities for local citizen participation in government. By requiring adoption of
uniform laws and standardized regulatory procedures through its accreditation program, the NAIC, in
large measure, eliminates the possibility of regulatory experimentation. By operating as a centralizing
mechanism permitting the states to circumvent and defuse attempted federal intervention in insurance
regulation, the NAIC concentrates rather than disperses power. In short, theoretical arguments for regulation
at the state rather than the federal level become less compelling once the influence of the NAIC is taken
into account.
Page 37 of 43
States Fail: NAIC Key
For two reasons, general theories of regulation and administrative process, although helpful in understanding
and assessing insurance regulation, provide no firm basis for either supporting or opposing retention of the
current system of state regulation. First, the literature focuses on federal rather than state regulation, typically
examining the relationships between and among Congress, the President, federal regulatory agencies, regulated
industries, and the public. To the extent that the structure of state government parallels that of the federal
government, the literature provides some useful analogies. However, insurance regulation occurs not
merely through the activities of individual state regulatory agencies, but also through the efforts of the
NAIC. This is the second reason that general theories of regulation cannot be immediately applied to
assess insurance regulation. As general theories, they cannot take into account the unique structures of
insurance regulation in which a private, nongovernmental body composed of state government officials
both performs central regulatory functions and attempts, at the individual state legislative and
administrative levels, to implement joint decisions on regulatory issues.
The substantial body of literature developed in the last decade dealing with the phenomenon of the "private
legislature" in the [*668] context of uniform law revision provides some useful insight into the issues raised
n253
by the NAIC's role in drafting model insurance laws and regulations, but its analytical utility is similarly
limited. The NAIC's model law drafting function is similar to that of the National Conference of Commissioners
on Uniform State Laws (NCCUSL), which creates model laws, and the American Law Institute (ALI),
n254 n255
which drafts restatements of the law and assists with drafting the Uniform Commercial Code. However, the
significant differences between bodies such as NCCUSL, the ALI, and the NAIC preclude direct application of
the "private legislature" analysis to the NAIC. First, the members of ALI and NCCUSL are private individuals-
lawyers, academics, and judges-who devote some of their time to working to improve the law. The NAIC
membership is composed of state officials with regulatory powers and responsibilities in their respective states,
who may also wield substantial influence in their own state's legislatures and who are individually accountable
to their governors, or in some cases, to the electorate. Second, unlike the NCCUSL and the ALI, the NAIC
performs substantial and important regulatory functions in addition to the drafting of model laws.
Page 38 of 43
States Bad: Cost
State regulation increases costs for business.

State-level regulation carries significant systemic advantages for insurance companies, which typically enjoy a
"strong presence" in their state of domicile. A system of multiple (state) regulatory bodies affords the
n282
regulated industry choices among regulatory environments. In a state system, insurance companies retain the
n283
possibility of exit from a particularly invasive or burdensome regulatory regime. Threatened loss of coverage
n284
for state consumers, substantial tax revenues, and employment opportunities if insurers leave a state may
encourage a more favorable regulatory environment. Professor Kimball's classic article on insurance regulation
argues for continued state regulation based partly on the fact that the insurance industry has the capacity to deal
effectively with state legislatures because competition among the states provides leverage for the industry that
is not possible at the federal level. On the negative side, a system of state regulation may also require
n285
greater expenditures, particularly by companies who do business in multiple states. National companies
may expend more resources to influence legislation and regulatory policy in multiple states.
Page 39 of 43
States Bad: On-Balance
Federal regulation increases transparency and trust in insurance.

Rules concerning conflicts of interest and disclosure requirements are more stringent at the federal level
than in many states. Federal regulation also may generate greater public attention to and participation in
insurance issues. As the regulatory stakes increase, so do the benefits of consumer participation. The
multiple, decentralized layers of the state system make effective public participation in what are typically
complex issues difficult and highly unlikely. The centralization afforded by the NAIC does not advan-
[*677] tage consumers, given its historical susceptibility to industry influence and its status as a
n288
private organization. Centralizing regulation makes the issues more visible and participation by
n289
consumers more rewarding. When regulatory power is widely dispersed, as it is under the present system,
industry influence attracts less attention. Consumer and media oversight is more likely to occur where
the stakes are greater. Effective participation at the federal level benefits all insurance consumers, not
just those in a particular state. These predictions are borne out by the public's reaction as the NAIC assumed
greater power during the height of the accreditation controversy in 1994. The NAIC's expanded role generated
greater attention by the media and public interest groups. Various consumer-oriented reforms within the
n290
NAIC reflected that attention: the NAIC instituted its consumer participation program, took steps to limit
n291
industry participation in policy making, and opened its meetings. As the criticisms leveled off, the NAIC
n292 n293
subsequently undercut each of these efforts. Further, federal agencies are subject to various controls and
procedures designed to enhance public access and participation in regulatory processes. The NAIC is not
subject to these mechanisms.
Page 40 of 43
NAIC BAD: Can’t Reform
The NAIC cannot be reformed.

As a preliminary matter, the necessary reforms cannot be accomplished by the NAIC. Some of the
reforms could not be addressed by voluntary implementation of internal policy: the NAIC cannot
increase its nonindustry funding, for example, by forcing the states to increase their funding of the NAIC,
nor can it enhance its ability to force the states or the industry to act according to its direction. Although
the NAIC could address other problems internally, its past attempts to do so demonstrate the inadequacy of
NAIC-initiated reforms. For example, for many years, the NAIC closed important meetings to the public. n353
Although it adopted a new open meeting policy, the NAIC has violated its own policy by holding closed
n354 n355
meetings on industry advisory groups, Holocaust claims, mutual holding company conversions, and a
n356 n357 n358
closed CEO panel on financial services. Its attempts to minimize industry influence have also been largely
n359
unsuccessful. The NAIC merely substituted a new form of industry group for the industry advisory committee
and undercut those efforts almost immediately by creating an industry liaison group to participate in policy
n360
matters. The NAIC's failures to conform to its own policies may be noted by the press, but apart from what is
likely to be minimal and little-noticed adverse publicity, there are minimal incentives for the NAIC to abide
n362
by its own rules. In short, most of the necessary reforms cannot be implemented internally, and those that
can are subject to unilateral reversal by the NAIC because they would not be subject to systematic
external oversight to ensure compliance.
The NAIC is beholden to special interests… and they can’t afford to change this
policy.
As the confusion within the NAIC itself suggests, the change from industry advisory committees to technical
resource groups appears to have been largely cosmetic. Many in the industry, including individuals sitting on
industry advisory committees turned TRGs, were unaware of the change even more than a year after it had been
effected. Advisory committees continued working with the primary change being their designation as
n310
Technical Resource Groups. The example of the Actuarial Advisory Committee to the NAIC Property [*681]
Casualty Risk-Based Capital Working Group demonstrates the point. All members of the former industry
advisory committee were appointed to an American Academy of Actuaries Task Force on Risk-Based Capital,
which will advise the NAIC Working Group "from a professional actuarial perspective." Similarly, the former
n311
Model Law Advisory Committee has continued to function as a technical resource group. n312
The potential for these industry groups to bias regulation in their favor is clear, regardless of the name given
them. One commentator noted, "[Y]ou can't get unbiased number crunching from anybody who has an ax to
grind. . . . [O]n some [technical] issues it's tough to get away from the industry bias. Another wrote, "[The
n313 n314
NAIC] committee structure results in excessive dependence on industry advisory committees . . . in performing
staff work. . . . because all NAIC members are all part-timers-their primary function being running their
respective state insurance departments-controlling the agenda of the technical resource groups can be a difficult
chore." For the NAIC to avoid the inevitable bias accompanying the use of industry advisory committees
or technical resource groups, it would be necessary to utilize independent experts, such as NAIC staff or
state insurance department technicians, in lieu of the industry experts currently used. Budgetary
constraints would likely preclude immediate implementation of either option.
Page 41 of 43
Federal Action Key
On balance- federal action is crucial to avoid state information gaps.

Decisions about appropriate regulatory structures are enormously complex. The decision is not merely a
question of federal versus state regulation. Despite the frequent phrasing of the question in that way, the real
question is what kind and what level of federal regulation, what kind and level of state regulation, and what
combination of dual or cooperative regulation is most effective and appropriate. The basic point is that these
questions should be reexamined in the context of the changing structures of the financial services industry. n339
This Article suggests several alternative methods to accomplish insurance regulation reforms. First, the existing
regulatory structures could be dismantled and replaced with federal regulation, but state regulatory failures
examined in this Article do not, in themselves, suggest a need for federal regulation. Weakness, ineffectiveness,
and susceptibility to influence can occur at federal as well as state levels. As commentators have repeatedly
observed, the failures [*687] of the Federal Home Loan Bank Board to prevent the thrift industry insolvencies
demonstrates that federal oversight will not necessarily eliminate significant problems in a regulated industry. n340
However, it is clear from the history of insurance regulation and the efforts of current members of the
NAIC that some centralization is necessary to ensure effective insurance regulation. Centralization, in
itself, will not eliminate regulatory errors and omissions, but some measure of centralization can
eliminate uneven state regulation, failure to share information, and the inability of individual states to
monitor worldwide insurance and reinsurance networks that have contributed to regulatory problems.
Page 42 of 43
States Bad: NAIC- Shouldn’t Devolve
Devolving regulatory authority is bad- it will fail and is unconstitutional.

A reform suggested in the past is for the federal government to delegate power to the NAIC, thus enabling the
NAIC to force action by the states and industry compliance with its regulatory dictates. [*691] The
n363
delegation could also address other NAIC problems by making the NAIC subject to various federal laws that
constrain government conduct and by providing independent funding. GAO first noted the difficulties with
n364
this approach in its assessment of the NAIC. In reviewing options for reform of the NAIC, particularly its
n365
lack of power, the GAO concluded:

Empowerment by the federal government is also undesirable. NAIC is composed of state insurance
commissioners. Those commissioners are accountable to their states and should not be made accountable to
federal authority as well, since this would create an irreconcilable conflict of interest. Moreover, given NAIC's
organizational structure, congressional delegation of the regulatory authority necessary to establish NAIC as an
effective public regulator could raise constitutional questions. Subsequent Supreme Court case law
demonstrates the prescience of the GAO report. In Printz v. United States, the Court ruled that the Brady
n367
Handgun Violence Prevention Act unconstitutionally obligated state officers to execute federal laws by
requiring state officers to conduct background checks on prospective handgun purchasers before the national
system became operative. Although some confusion remains over the NAIC's status as a public or private
n368
organization, it appears clear that a federal delegation to the NAIC would run afoul of the Printz holding.
n369 n370
Even if the NAIC is considered a [*692] private organization, it is composed of elected or appointed officials
with responsibilities to their states. An overlay of federal responsibility would be unworkable and
unconstitutional.
Page 43 of 43

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Miami Debate ABJ

Ethanol opens up jobs and options for fair trade.

Ethanol is better for environment than petroleum fuels.

Research and development- especially commercialization- is crucial

Oil Dependence Bad – Great Power Wars 1/2

Oil dependence will cause more wars soon.

Oil Dependence Bad – Great Power Wars

Oil Dependence is leading to Great Power Wars.

Oil independency is key to achieve a balanced global economy.

OPEC is mean and over-charges for oil

Widened dead zone hurts fisheries

This damages the overall US economy

Malaysian biodiversity key to long-term global biodiversity

A) Farm-grown fuels cause of destruction of Amazon – causes Global Warming.

B) Destruction of the Amazon causes human extinction

State regulation of insurance empirically fails for many reasons.

States empirically can’t detect insolvency- leaving investors unprotected.

State Regulation requires multiple filings- crushing efficiency.

Federal Insurance is more efficient.

Federal involvement is crucial to the credibility of insurance regulation.

The NAIC is a private organization.

the state law analogues.

States empirically fail to secure investments.

State accreditation fails… their review process is fundamentally inadequate.

model laws allowed the states to substitute "substantially similar" laws.

Accreditation of insurance companies at the state level fails- they have

The NAIC fails- they are captive to special interests.

NAIC fails- reforms didn’t solve.

Changing the regulatory regime is costly- should leave it to the states.

responsiveness as compared to a distant central administrator, particularly since insurance is a "local"

Particularly following a resurgence of constitutional federalism as a constraint on national power in the

State regulation increases costs for business.

Federal regulation increases transparency and trust in insurance.

The NAIC cannot be reformed.

On balance- federal action is crucial to avoid state information gaps.

Devolving regulatory authority is bad- it will fail and is unconstitutional.

lack of power, the GAO concluded:

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