Our state-based system of insurance regulation received a shot in the arm in January when former Sen. Ben Nelson (D-Neb.) was appointed as the new chief executive officer of the National Assn. of Insurance Commissioners (NAIC). Nelson is a strong supporter of state insurance regulation.
“His extensive experience is uniquely suited to make him an effective advocate for the preservation of state regulation of insurance,” said PIA National Executive Vice President and CEO Ron Von Haden. “PIA looks forward to continuing the close working relationship it has maintained with Ben throughout his decades of service.”
Like the cavalry riding to the rescue, Nelson served his new job for only 24 hours before he held a press conference and declared that there is “no need for dual regulation” of insurance. You could almost hear a collective national sigh of relief emanating from the supporters of state insurance regulation.
Dual or “optional” federal regulation—where carriers choose their regulators and a new federal bureaucracy gets created—is the Trojan horse that rolls up the steps of the Capitol every year and disgorges squads of bank and securities lobbyists, who then try to devour the insurance sector, while the federal government gazes ravenously at every state’s insurance premium tax receipts.
Fortunately, this annual assault continues to fail. It also is tiresome.
Nelson said state regulators should form a partnership with federal and international officials, citing the cooperation achieved recently regarding Superstorm Sandy, but that state regulation should be preserved. He said any partnerships must recognize the “importance and value of state regulation.”
This, of course, was music to the ears of all staunch supporters of state regulation. Prior to the tenure of Nelson and his predecessor, Therese M. Vaughan, a fear existed that some in NAIC had contemplated “joining the dark side” of federal regulatory encroachment in order to preserve their prerogatives and expand their powers. No more. It now looks like capitulation will remain off the table.
One need only look at Ben Nelson’s entire career to see that he lives and breathes state insurance regulation. His credentials include two terms as U.S. Senator; two terms as governor of Nebraska; executive vice president and chief of staff for the NAIC; director of the Nebraska Dept. of Insurance; and CEO of the Central National Insurance Group.
Throughout, Nelson has remained true to his principles. “I, too, am a states’ rights person,” he said in a video interview with PIA in 2006. “I do believe that state regulation has worked so very well because, as Jefferson said, the states are the laboratories of democracy and states have taken different approaches. That, I think, has been outstanding. I think it’s improved the whole field of state regulation.”
It is comforting to know that the next time someone at the U.S. Treasury dusts off the financial services modernization blueprint that was pushed in 2008 by former Secretary Henry Paulsen—who said that the insurance industry should be “prepared” for absorption into a unified financial services structure—Ben Nelson will be there to say an emphatic “no.”
The presence of the former Nebraska senator also may break some of the Capitol Hill gridlock on a host of insurance issues. As a former colleague, well-respected by his peers, with deep insurance expertise and bipartisan support from his tenure as one of the most conservative Democrats in the Senate, Ben Nelson is uniquely positioned. The White House owes Nelson for casting a vote in favor of Obamacare, and the Dept. of Health and Human Services—which has the final word on agent-related issues—reports to the White House.
This man will get all of his phone calls returned. In Washington, D.C., that’s more than half the battle.