NAIC Wants Modernization of Insurance Regulation, Not Federalization
The National Association of Insurance Commissioners (NAIC) also testified at the hearing held on October 3 by the U.S. House Subcommittee on Capital Markets, Insurance and Government-Sponsored Enterprises on insurance regulation. Here is NAIC President and Alabama Insurance Commissioner Walter Bell's testimony:
“Every day, state insurance departments make certain that insurers meet the reasonable expectations of American consumers with respect to financial safety and fair treatment....In addition to successfully protecting consumers, state insurance officials have proven adept stewards of a vibrant, competitive insurance marketplace.”
Specifically, Bell outlined a number of major areas where state insurance regulators have implemented initiatives that have successfully strengthened state insurance regulatory processes, including:
* Speed to market;
* Solvency and guaranty funds;
* Consumer assistance and education;
* Fraud detection;
* Regulatory actions against companies, agents and brokers;
* Turnaround on rate and form filings;
* Producer licensing; and
* Company licensing.
“We have been the face of regulatory reform, coupling an aggressive enforcement mindset with advanced techniques to provide comfort to American consumers in times of peril,” he said. “However, there are limited areas where insurance regulation could benefit from a federal presence.”
For example, state insurance regulators have often requested access to FBI databases in order to conduct background checks on potential insurance agents and brokers. In addition, state insurance regulators have encouraged the enactment of federal legislation such as the Terrorist Risk Insurance Act (TRIA), which provides a federal insurance backstop in the event of a terrorist attack.
“The NAIC and its members welcome Congressional interest in insurance supervision,” Bell said. “But even well intended and seemingly benign federal legislation can have a substantial adverse impact on existing state protections for insurance consumers. Modernize, don’t federalize.”
About the NAIC
Headquartered in Kansas City, Missouri, the National Association of Insurance Commissioners (NAIC) is a voluntary organization of the chief insurance regulatory officials of the 50 states, the District of Columbia and the five U.S. territories. The NAIC’s overriding objective is to assist state insurance regulators in protecting consumers and helping maintain the financial stability of the insurance industry by offering financial, actuarial, legal, computer, research, market conduct and economic expertise.
Source: Source: NAIC | Published on October 4, 2007
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