Joel Wood should be a blogger. The senior vice president of government affairs for the Council of Insurance Agents and Brokers is a colorful writer with a lot to say, providing valuable insights on a host of controversies inside and beyond the Beltway in his regular column to members. The latest example is his post about last week's extraordinary pow wow with the National Association of Insurance Commissioners to talk about federal regulation, which he opens with the keen political maxim that “the foot you step on today is connected to the ass that you have to kiss tomorrow.”

Mr. Wood's internal memo related how he was a bit nervous about being invited to the NAIC meeting with three other industry groups–PCI, NAMIC and the IIABA–all far more friendly historically towards state regulation.

“For years, as a national trade association spokesman, Ive been guilty of reflexively casting state insurance regulators as Fred Flintstone-like barriers to free and open competition,” he noted. “After all, how many times have I used the old line that the NAIC stands for 'No Action Is Contemplated?'

As I pointed out in yesterday's blog entry, the NAIC made a blunder by not inviting any consumer advocates to join the party. However, at least they asked one group to attend that was certain to tell them what they didn't want to hear, that being CIAB, which first suggested the idea of creating a National Association of Registered Agents and Brokers to streamline producer licensing, and which now favors an optional federal charter.

To Mr. Wood's immense relief and to NAIC's credit, he had nothing to fear. This was a true discourse, not an inquisition. “The NAIC and The Council do indeed have fundamentally different views on the questions of state-versus-federal insurance regulation, but no cheap shots were exchanged,” he noted.

Two of the leading commissioners in attendance–last years NAIC president, Walter Bell of Alabama, and this years president, Sandy Praeger of Kansas–were praised by Mr. Wood as “thoughtful, progressive-minded and eager to debunk the image of their organization as a 'Just Say No' crowd.”

That doesn't mean they will just stand by while Uncle Sam takes over their jobs, he added, noting the two will “jealously guard their turf, and they are outspoken over the risks they see from federal insurance regulation.”

“But two things are becoming increasingly clear, and they should be a comfort to Council member firms,” Mr. Wood reported. “The NAIC and our members have converging interests in resolving the two key regulatory morasses facing producers–the beast of multi-state surplus lines placements, and the constant frustrations of non-resident agent/broker licensure. Three-quarters of my time with the commissioners was spent in a very productive dialogue about how to move beyond our past problems on those issues.”

He went on to praise other commissioners eager to reform the creaky state system.

The fact that the NAIC is willing to hear criticism of how state regulation functions, and be open-minded about possible reforms (short of complete federal preemption) is good news, indeed. Such a frank dialogue should be a staple of every NAIC quarterly meeting–with the emphasis on taking action, not merely talking about what's wrong.

“Im grateful for the goodwill of the NAIC leadership, and I accept the admonition of Commissioner Bell that The Council must ultimately be a more forceful presence in individual states in fighting the forces of protectionism,” namely, “state legislators and their enablers among local industry groups who feel threatened by streamlined interstate competition,” concluded Mr. Wood.

He vowed to be “critical of state regulation where we need to be,” but to also be “mindful of the root causes of regulatory and legislative inertia.”

If a group such as CIAB, that has long sought radical changes, can come out of a confab with NAIC in such high spirits, perhaps there is hope yet for true reform.

What do you folks think?

Special Reports /

Wood Always Tells It Like It Is

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