NAIC Enhances Outreach To Feds
The U.S. 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 contends.
In an interview with National Underwriter, Mr. Serio said 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.
The Kansas City, Mo.-based NAIC, Mr. Serio said, has been involved in an enhanced Congressional Outreach program aimed at communicating the efforts of states and the NAIC to improve insurance regulation, as well as 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 the NAIC to dispel some misconceptions about the pace of reform. During one hearing, he noted, some members of the House Financial Services Committee expressed concerns that reforms were taking too long to implement.
It was very important for the NAIC, he said, to correct any misconceptions about the pace of change. NAIC and the states, he said, are developing a culture of change in which the regulatory system is constantly scrutinized for improvements.
So far, he 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 insurers off the table as a legislative option, he said: "I'm not sure it has ever been on the table."
The discussions, he said, have always revolved around modernizing state regulation, and the committee is not looking at replacing the state system.
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," he said.
He said that while many insurer CEOs seem to think that OFC is some kind of panacea, there are differences among the industries. Some property-casualty CEOs, he noted, have the perception that their concerns have not really been part of the discussion on state regulatory reform, adding that p-c executives have not bought into 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.
However, he noted that p-c insurance involves more geographic and 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 toward state regulation when they see what is being done on modernization.
Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, March 12, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.
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