Insurance panel discussions are usually fairly mundane and predictable affairs, but in what might be the first real burst of spontaneity in the history of such events, the members of one panel stood up to publicly challenge the assertions of those on a subsequent gathering, with regulators and insurers going at it during the recent Joint Industry Forum. It was one of the most honest and productive exchanges I have ever seen between the two sides. I just wish there were more like it.

To read all about the clash, click here.

As reported by our own Susanne Sclafane, here are some of the highlights:

Allstate CEO Thomas Wilson set off the fireworks by addressing a question regarding the lack of product innovation by saying that personal lines insurers are thwarted, in part, by a regulatory environment that is so arcane you cant get anything done.

That prompted South Carolina Insurance Commissioner Scott Richardson to step up to an audience microphone and challenge the insurers to tell him exactly what regulators could do to cease being archaic.

Mr. Richardson also demanded to know why 800-pound gorillas like Allstate are pushing for federal government solutions to catastrophe insurance problems.

The South Carolina commissioner, participating on a prior panel consisting of regulators, had warned against letting Washington into the insurance business. (Click here to read all about that panel.)

Large personal lines carriers talk about such solutions because were the ones on the hook, Mr. Wilson said.

But you did that voluntarily, Mr. Richardson shot back.

Yes sir, we absolutely did. But we recognize that the risk is too great for the return were getting, Mr. Wilson said.

Mr. Wilson urged regulators to loosen the reins and to believe in the customer.

Its worked in every other industry. If you let consumers choose, they will get themselves educated, they will understand what to do, he said.

Mr. Richardsona former independent insurance broker, and thus no enemy of the industryresponded that such a Utopian approach is not possible in coastal states, where two or three insurers write 40-to-50 percent of the business.

Youre saying, Let the customer walk. If Allstate wants to get a 100 percent rate increase, I should give it to you and Johnny Lunchbucket will go to somebody else, he said. That sounds good in theory, but Im not sure theres enough capacity in this room that would come sucking in [to] take the business [you] leave.

Then ACE CEO Evan Greenberg got into the act, calling for a single, nationwide set of uniform regulations.

Just look at the number of [National Association of Insurance Commissioners] model acts that have been passed where theyre to be adopted by all the statesHow many of them have in fact been done? he asked. Its a broken system and its antiquated.

NAIC President Sandy Praeger got up to respond, although she was more sympathetic–even refreshingly apologetic–than Mr. Richardson.

Weretaking a very hard look at the way we develop models and in a sense set ourselves up to fail, said Ms. Praeger, who is insurance commissioner of Kansas. I think there are some areas where we are going to have to have assistance from Congress to get to the uniformity.”

She said insurers and regulators should work as partners and not adversaries in getting good products to market. Were moving in a direction that I think is going to bring about some modernization while preserving a state-based system that instills consumer confidence in the products youre selling.

I wish we could have more such frank exchanges, with both sides stating how they really feel and putting all their cards on the table. Maybe we'd actually accomplish some meaningful reforms.