The National Governors Association expressed concern in a letter to Treasury Secretary Jacob Lew about December's Federal Insurance Office regulatory modernization report and its role in the larger state vs. federal regulation debate.
The NGA, a bipartisan organization of the nation's governors, says in the letter, "Governors are concerned by the FIO report's suggestion of a greater federal role that could invite a dual regulatory system. It is our position that federal laws and regulations must not preempt or undermine the strong state-based insurance-regulatory system that for more than 140 years has protected consumers and safeguarded the capital adequacy and solvency of insurers."
The FIO report, released in December after long delays, attempted to reframe the state vs. federal debate, calling for a hybrid system in which both state and federal regulators assume roles based on their respective strengths. It did call for federal intervention in mortgage insurance, reinsurance collateral and the monitoring of National Association of Registered Agents and Brokers Reform Act.
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