Leadership of the National Conference of Insurance Legislators said it issued a letter today urging the National Governors Association (NGA) to continuing opposing optional federal charter (OFC) legislation for insurers.
The NCOIL letter came on the heels of an Aug. 22 letter from two insurance trade groups urging the governors to change their stance.
That communication to NGA from the American Insurance Association (AIA) and American Council of Life Insurers (ACLI) contained "ill-advised recommendations," NCOIL said.
NCOIL said it challenges "the notion put forth in the ACLI/AIA letter that a dual charter 'regulatory system reacts quickly to rapid changes in the marketplace and provides efficiencies and convenience to consumers.'"
NCOIL said it is expressing further support for a July 10, 2006 joint NGA-National Conference of State Legislatures (NCSL) position statement that said, "States are better positioned than the federal government to balance the interests of U.S. insurance consumers with that of commercial competition."
The NCOIL letter mentioned costs of a federal insurance bureaucracy–which would be established under S. 40/H.R. 3200, the National Insurance Act of 2007.
NCOIL said that "an OFC would set up a bifurcated regulatory system for insurance, put at risk important state revenue, nullify critical state-initiated consumer safeguards, and delay and deny important consumer access and recourse in problem times."
Further, the NCOIL letter recognizes a recent statement from the Coalition Opposed to a Federal Insurance Regulator (COFIR), in which it notes that the "insurance industry is sharply divided on the issue of a federal insurance regulator" and that a clear majority of the tens of thousands of consumers surveyed by COFIR are opposed to OFC legislation.
The NCOIL letter also noted what it said was the success of the Interstate Insurance Product Regulation Compact (IIPRC) that benefits insurance consumers in its 30 member states.
NCOIL said the IIPRC seeks to "bring innovative products to market much more quickly," as requested by the ACLI and AIA in their letter, and said the IIPRC would allow insurance companies "to make one central filing with the IIPRC and offer approved products in all IIPRC member states."
NCOIL added in the letter that its leadership looks forward to discussing the issue further with the NGA, as the two groups share a common goal–that of "protecting insurance consumers and encouraging a thriving marketplace in our states."
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