State regulators are being urged by an insurance industry group to coordinate their investigations of insurance companies rather than simply piling on one after another.

The suggestion came in a letter from the American Insurance Association (AIA) to Pennsylvania Insurance commissioner Diane Koken, who is also the president of the National Association of Insurance Commissioners.

AIA called on the NAIC to establish guidelines for multiple state investigations of a company. It suggested that it put one state's regulator in a lead role for the investigation.

"While state insurance regulators have legal authority to obtain necessary information in their investigations, we do not believe it is necessary or desirable for the states to essentially tackle these issues on a fragmented, inconsistent basis," wrote Craig A. Berrington, senior vice president and general counsel for the AIA.

Allowing each state to conduct its own investigation and issue it own subpoenas, is a growing problem that consumes resources, wastes time, and runs counter to the goal of a more efficient state regulatory system, according to Mr. Berrington.

He suggests that regulators instead, should have a lead investigator for probes involving multiple jurisdictions.

"Where multiple jurisdictions are involved because of the insurance company's domiciliary structure, those jurisdictions should establish a lead state based on the facts of the individual case and the expertise in the affected states," Mr. Berrington wrote. "The concept is already used successfully in other areas of regulation."

A spokesperson for Ms. Koken said the commissioner was unable to comment on the specifics of Mr. Berrington's letter, but added that she has, "always been supportive of the need to coordinate among the regulators where possible for greater efficiency."

Additionally, the spokesperson said that the issue will, "undoubtedly" be among those discussed at the next NAIC meeting scheduled for June 11 through the 14 in Boston.

Special Reports /

State Probes Need More Coordination: AIA

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