Insurance Commissioners Will Oppose Plans for Federal Insurance Regulator
As word came out that U.S. Treasury Secretary Henry Paulson will unveil a blueprint to overhaul the regulation of markets today, state insurance commissioners are already opposing one of the items in the Treasury's plans: calls for calls for the creation of a federal insurance regulator.
States currently have the authority to oversee insurers, and although efforts have been made to standardize forms and other requirements, many differences persist between states.
"I think we've demonstrated over the years that state-based regulation is the most effective way to protect our consumers," stated Sandy Praeger, president of the National Association of Insurance Commissioners.
"Efficiency at the cost of consumer protection is I don't think where we want to go."
Praeger, who said she was speaking on behalf of all state insurance commissioners, said it was important to have people at the state level who could ensure that products were appropriate and could explain them to customers.
"You want consumers to understand what they are buying ... You want someone to make sure the rules are easy to understand and appropriately represent the product being sold," she said.
Under the treasury department's proposal, a new federal insurance regulator would have oversight of insurance firms that chose an "optional federal charter".
Published on March 31, 2008
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