NU Online News Service, Oct. 4, 9:58 a.m. — Washington
The National Association of Insurance and Financial Advisors, Falls Church, Va., says it now supports congressional action to improve state insurance regulation.
In a new policy position, NAIFA says that it continues to support the “principles” underlying state regulation of insurance, but that a federal role is necessary to assure national uniformity and cost-efficiency.
But NAIFA also spells out guidelines that it thinks any federal actions aimed at improving the system ought to meet.
Agent licensing and continuing education requirements: All insurance agents should be licensed, but redundant licensing requirements should be eliminated, NAIFA says.
Each insurance agent should have to show one, and only one, regulator that he or she is qualified to be licensed and represent either a state-chartered or federally chartered insurer, NAIFA says.
NAIFA says that uniform substantive and procedural licensing requirements should be established for each class of similarly situated agents, and that each insurance agent should need to satisfy only one set of continuing-education requirements for each line of business.
NAIFA says the uniform licensing requirement should include a mandatory criminal background check, and it agrees that a national database should identify agents who have committed fraud. But it argues that access to the database should be limited to regulators.
Consumer protection: NAIFA says the tax incentives supporting life insurance and other insurance products must be preserved. Uniform trade practices and consumer protection requirements should apply to all insurance sales and service activities, NAIFA says.
NAIFA also says insurance companies must adhere to adequate solvency standards that include guaranty funds or similar fail-safe mechanisms.
Rates and forms: NAIFA says that all duplicative filing and approval requirements should be eliminated, and that uniform filing and approval requirements should be established. NAIFA adds, however, that “quality to market” concerns should not be sacrificed to increase speed to market.
Regulatory rules and procedures: NAIFA says current regulatory expertise should be preserved to the maximum extent possible consistent with efficient regulation.
NAIFA insists that agents must be allowed to choose whether to submit to any newly created regulatory authority, and that agents must have a clearly defined role in the development and application of any new regulatory rules, structures and procedures.