WASHINGTON–A Maryland lawmaker, speaking at a meeting of state insurance regulators and legislators here, urged the two groups to unite and fight the possibility of federal insurance regulation.
"We are all under attack by the Feds," and "We're all in this together," said State Sen. Delores Kelley, D-Baltimore County, speaking at a session establishing a more formal dialogue between the two sets of officials.
She added that if there are disagreements between regulators and legislators, then "let's have a fight in-house and quietly and not in a public way that would harm us during a time of stress."
Sen. Kelley's comments came in advance of Wednesday's planned hearing by the capital markets subcommittee of the House Financial Services Committee on the future of state regulation of insurance at which NAIC officials are due to testify. In June, the Treasury Department announced it plans to include insurance in its review of the regulatory system for U.S. financial institutions.
Her remarks were made during the initial legislative liaison meeting during the fall meeting of the National Association of Insurance Commissioners, Kansas City, Mo.
Sen. Kelley's comments were made to a room packed with about 20 insurance commissioners as well as representatives of the National Conference of Insurance Legislators, Troy, N.Y., and the National Conference of State Legislatures, Denver.
Kentucky State Rep. Robert Damron, D-Jessamine, echoed those words, stating, "the real enemy is across on the Hill. They love for us to fight and bicker and battle each other. Federal regulation of insurance is our opponent, not each other."
During the session, Walter Bell, NAIC president and Alabama insurance commissioner, said that he doesn't believe that federal legislators are the NAIC's enemy. "We work with Congress. We'd rather testify before friends than before enemies."
Among the strengths that both regulators and legislators pointed to in making the case for state regulation is the IIRPC (The Compact Commission). The Commission is a single point of filing for life insurance products that creates a more uniform way of licensing products nationwide.
Kansas Insurance Commissioner Sandy Praeger and NAIC President-elect, offered other examples of how the NAIC has helped states, detailing information in a state insurance regulatory tool kit.
Benefits she cited include: o Communications and consumer outreach-$780,025 (including $289,400 for the popular Insure U consumer outreach program).o Education and training ($58,125).o Assistance to regulators to enable attendance at meetings totaling $57,000.o An accreditation program which the NAIC estimates brings $14,000 in value to the states.
Ms. Praeger said that that amount is actually understated because if individual states had to go back to examining all companies, the value of the benefit would increase greatly.
Sen. Kelley said that the NAIC's importance was recognized by legislators and urged commissioners to let legislators be more active in areas such as putting together the new liaison group's agenda rather than having the agenda presented to them.
She also asked to participate in NAIC educational sessions and even to serve in an ex officio capacity on some of their committees.
Commissioner Bell said that he would work to ensure that legislators had access to NAIC educational programs.
Rhode Island State Rep. Brian Kennedy, D-Hopkinton, also expressed concern about not having input on setting the session's agenda and on the creation of a new "regulator to regulator" meeting status, which he maintained is no different than the old "executive session" status.
"You can put paint on it, but it is still the same thing as it was before–a closed meeting." Rep. Kennedy has been campaigning for months now to have the NAIC end most of its closed-door executive sessions.
Mr. Kennedy called the first liaison meeting a good first step but added that more steps are needed to be taken to accomplish the actual goal of opening up the meeting and achieving regulatory transparency.
The NAIC's Bell explained that in cases involving proprietary information and matters of litigation, it is necessary to close meetings. Mr. Kennedy offered that there may be a way to structure the meeting so that part of it could be closed.
Tom Sullivan, Connecticut commissioner, said that "we need to get our hands around what constitutes an open meeting."
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