The Independent Insurance Agents and Brokers of America is close to finalizing a federal legislative proposal that would maintain state insurance regulation but mandate more uniformity.
Thus far, the Alexandria, Va.-based IIABA, working jointly with some insurance companies, has developed tentative legislative language covering several major areas of regulation often cited as needing reform.
These include producer licensing, policy and form regulation, insurance company licensing, and state accreditation.
Reaction from life insurance company and agent groups has been cautiously positive.
Justin Roth, director for federal government affairs for IIABA, says the language is a working draft, and IIABA is still working with insurance companies and key legislators in order to develop a consensus document.
Since IIABA is interested in developing a consensus, Roth says, the language in the draft is still undergoing some tinkering, although he says not much more needs to be done.
There is no timetable for seeking formal introduction of the plan as legislation, he says, which probably will not happen until there is a consensus.
Roth says IIABA embarked on this approach because of the current push in some quarters for federal regulation.
Agents and companies are concerned with the current market, he says, but many believe that creating a new federal bureaucracy will only make matters worse.
The goal of IIABAs effort, Roth says, is to streamline insurance regulation and make it more uniform while maintaining the 150-plus years of insurance regulatory expertise on the state level.
Allen Caskie, chief counsel for federal relations with the American Council of Life Insurers, Washington, praises IIABAs efforts.
“We are encouraged that IIABA is looking for ways to enhance uniformity of regulation,” Caskie says. “They have put a good deal of work into their concept.”
However, Caskie says, ACLIs feeling is that simple incentives for states to become more uniform wont get the job done, although he says ACLI is still studying the IIABA draft.
“The only complete answer is a federal charter option,” Caskie says.
Commenting specifically on the producer licensing language, David Winston, vice president of government affairs for the National Association of Insurance and Financial Advisors, Falls Church, Va., says NAIFA is generally supportive of the effort.
However, he says, the draft is primarily written from a property-casualty perspective and does not address life insurance-specific issues of interest to NAIFA members, such as securities and life insurance dual licensing.