NAII: Reg. Modernization 2004 Priority
NU Online News Service, Dec. 29, 2 :55 p.m. EST?State insurance regulation is now at a "critical crossroads" and achieving regulatory modernization in 2004 must be a top priority for insurers and regulators, according to the National Association of Independent Insurers.[@@]
Robert Zeman, vice president of state government relations at Des Plaines, Ill.-based NAII, noted that "some modest improvements were made in the states" in 2003, particularly regarding the movement away from prior approval laws.
Mr. Zeman also noted that a number of states made good progress in regulatory modernization this year. New Hampshire, for example, adopted a comprehensive use-and-file system, while Louisiana's flex rating became a stepping stone toward more reform going forward, NAII said.
Additionally, New Jersey, where "decades of price controlling bureaucracy" were scrapped in favor of a more competition-driven system, is a good example of successes in 2003, the group said.
"Consumers in those states are already beginning to reap the benefits of a more modern regulatory system," Mr. Zeman said. "They have more companies to choose from and more coverage options. In addition, the cost of insurance?particularly in New Jersey?has started to drop as a direct result of increased competition and less costly regulation."
However, Mr. Zeman argued, more sweeping regulatory modernization changes are needed in the new year, because "Congress will be keeping a watchful eye on developments as they consider proposals to expand federal oversight of the industry."
NAII noted that Congress has been holding hearings and that the General Accounting Office earlier this year released a report titled "Insurance Regulation: Common Standards and Improved Coordination to Strengthen Market Conduct Regulation."
The report, NAII said, essentially recommended that much more modernization is needed quickly. In addition, the Fair Credit Reporting Act was reauthorized this year, generating a heightened interest in the regulation and oversight of insurance activities by insurers as well as by some members of Congress.
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