Commissioner: Congress Must Hear State Regulation Is Doing A Good Job

Speaking of the American Council of Life Insurers, Washington, Fitzgerald says that “on my darker days, I wonder if anything we can do would satisfy that association. Fortunately, I dont have many dark days.”

The ACLI maintains a position that it wants to see both an optional federal charter and more streamlined state regulation advanced, as Bruce Ferguson, ACLI vice president-state relations noted.

In a written statement, Ferguson says, “We are grateful for the tireless work of Commissioner Fitzgerald and his fellow regulators to modernize the state regulatory system. When their efforts reach fruition, it will be a sunny day for everybody, especially life insurers and the consumers they serve. We believe that our strong support for these efforts and our pursuit of an option for a federal charter are complementary, not mutually exclusive, approaches to regulatory modernization.”

A survey commissioned and released by the ACLI found that only one-third of consumers know life insurance is state regulated and only 11% would try to resolve a complaint against a life insurer by turning to state insurance regulators (see story on page 12).

Additionally, ACLI Chairman Joseph Gasper, testified before Congress that consumers would be protected under a system of federal regulation (see NU Online, June 18).

For those who favor regulating insurance through an optional federal charter, Fitzgerald says he believes it would be entirely different from the current way of doing things. “The ability to provide input would not necessarily be available to them.”

What Washington is used to, he explains, is a system of statutory authorization in which rules are developed, put out for public comment and then finalized. “There is no reason to think that it [insurance regulation] would be different.”

Fitzgerald says a new draft of the interstate compact could be ready by the end of June and that further discussion will take place this month during a meeting of the National Conference of State Legislatures, Denver.

Among the issues he says are still being worked on are the inclusion of long term care insurance in the compact as well as the role of consumer representatives in the compacts management.

Reproduced from National Underwriter Life & Health/Financial Services Edition, July 1, 2002. Copyright 2002 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.