House Panel, Regulators Back State Insurance Control: Serio
By Steven Brostoff, Washington Editor
NU Online News Service, March 3, 3:34 p.m. EST, Washington?The House Financial Services Committee and the National Association of Insurance Commissioners share a joint desire to preserve state regulation of insurance, New York Insurance Superintendent Greg Serio said.[@@]
Mr. Serio told National Underwriter in an interview that, while he expects the Committee to consider legislation on improving insurance regulation, the bill will likely focus on using federal tools to encourage states to enact reforms, rather than creating a federal regulatory presence.
Mr. Serio said the Kansas City, Mo.-based NAIC has been involved in an enhanced Congressional Outreach program aimed at communicating the efforts of states and the NAIC to improve insurance regulation and the ability of states to respond to specific state concerns.
While Congressional Outreach is not new for NAIC, Mr. Serio said, it has been stepped up recently with more insurance commissioners taking part in one-on-one discussions with members of their Congressional delegations both in the House and the Senate.
The effort, he said, has been very favorably received by members of Congress and has allowed NAIC to dispel some misconceptions about the pace of reform.
During one hearing, Mr. Serio noted, some members of the House Financial Services Committee expressed concerns that reforms were taking too long to implement.
It was very important for NAIC, he said, to correct any misconceptions about the pace of change. NAIC and the states, Mr. Serio said, are developing a culture of change in which the regulatory system is being constantly scrutinized for improvements.
So far, Mr. Serio said, members of Congress seem impressed with the work NAIC and the states have done.
Asked whether NAIC's efforts have helped take optional federal chartering of insurance companies off the table as a legislative option, he said he does not know how much OFC was on the table to begin with.
"I'm not sure it has ever been on the table," Mr. Serio said.
The discussions, he said, have always revolved around modernizing state regulation. The Committee is not seeking to replace the state system, he said.
Mr. Serio said that while NAIC continues its Congressional Outreach program, the next step is to go directly to insurance company chief executive officers to discuss regulatory reform.
"We have not given equal time to CEOs who are clamoring for change," Mr. Serio said.
He said that while many CEOs, both on the life insurance side and the property-casualty insurance side, seem to think that OFC is some kind of panacea, there are differences among the industries.
Some p-c CEOs, Mr. Serio said, have the perception that their concerns have not really been part of the discussion on state regulatory reform. Property-casualty executives, he said, have not bought into the NAIC's modernization effort to the same extent as life executives.
That, he added as an aside, raises the question of why so many life insurers are clamoring for OFC.
But he noted that p-c insurance involves more geographic distribution and more risk distribution than life insurance, where the products don't vary significantly from state-to-state.
NAIC, Mr. Serio said, needs to speak directly to CEOs who may become more positive towards state regulation when they see what is being done on modernization.
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