Following is a statement by President and Kansas Insurance Commissioner Sandy Praeger responding to NAIFA's support:
“NAIFA has been a long-standing supporter of the NAIC and the state-based system of insurance regulation. So, we are certainly surprised and disappointed that NAIFA’s board would suddenly change course on this important consumer-protection issue — especially without the benefit of having the full feedback and support of its 225,000 members.
“Considering that this measure still needs to be voted on by the NAIFA membership at large — and the governing board’s decision refers to certain conditions that would need to be satisfied — we remain hopeful that NAIFA’s membership will ask its board to reconsider its position.
“The plain and simple truth is optional federal chartering would create a new federal bureaucracy from scratch and allow insurance companies to ‘opt out’ of comprehensive consumer protections and state oversight. Current OFC proposals would gut consumer protection, while outsourcing most critical regulatory functions to an industry-run self-regulatory organization.
“Indeed, insurance agents and financial advisors’ primary responsibility is to their clients, helping them make sound financial decisions that are in their best interest. As such, NAIFA’s members represent an important link between insurance companies and consumers. After considering the potential impact an OFC would have on their clients, NAIFA’s members will surely agree that an optional federal charter combined with consumer protections is like oil and water — they simply do not mix, even with myriad caveats.
“While we realize there are still opportunities for improvement of the state-based system of insurance regulation, we believe the states are best positioned to provide solutions that promote consumer protection, streamline agent licensing, improve product speed-to-market and strengthen the competitiveness of the insurance industry. We look forward to continued dialogue with NAIFA on these issues.”