Agents Group Expresses Worries About Obama Plan For Insurers

NU Online News Service, June 18, 3:38 p.m. EDT

WASHINGTON–The leadership of the National Association of Professional Insurance Agents is voicing misgivings about the Obama administration proposal to create an Office of National Insurance.

The concept is part of the administration's scheme to reform financial services regulation. Len Brevik PIA executive vice president and CEO said the organization is "optimistic" about the overall regulatory approach that has been unveiled.

He said in a statement that the reforms needed to increase the efficiency of the current system "should be made within the state-based insurance regulatory system, in accordance with state insurance law."

The Office of National Insurance that would be created under the administration proposal would be housed in the Treasury Department.

Under the plan, the ONI would "gather information, develop expertise, negotiate international agreements and coordinate policy in the insurance sector."

Mr. Brevik said, "The states have a proven track record of success in maintaining market stability and providing consumer protection.

"It is no accident that the insurance industry is so successful. In large part, it is the result of prudent, state-based supervision with the right mix of checks and balances," he said. "We need to build on that success."

PIA, said Mr. Brevik, "is pleased to see that the Administration's regulatory reform proposals leave the state-based system of insurance regulation intact."

He added, "We are also pleased that the Administration did not endorse an optional federal charter and appears to recognize the fact that the state system of insurance regulation has worked well to protect policyholders and carriers."

In general, Mr. Brevik said, PIA views the Treasury report with "optimism."

He said the report seems "to recognize that federal regulatory reform efforts need to focus on the areas where prudent regulation was lacking: in banking, securities and capital markets."

The main concern is "the seeds for federal regulation of insurance at some point in the future are not planted now," he said.

"As a strong supporter of state insurance regulation, PIA will work going forward to assure that the insurance aspects of regulatory reform legislation do not lay the groundwork for future federal regulation, either unintentionally or by design," Mr. Brevik explained.