ACLI CEO Says Faster Approval Of Products Is Crucial
Colorado Springs, Colo.
Despite the fact that its board has supported an optional federal charter proposal, the American Council of Life Insurers “would love to have nothing but state regulation,” said ACLI President and CEO Frank Keating.
The problem is that some state regulators are indifferent to the industrys situation or have “a case of the slows,” he said in remarks here at the annual meeting of the Life Insurers Council.
“The ACLI is in something of a quandary” regarding this situation, Keating continued, and its board wants the OFC proposal “to prod state regulators” to be more responsive.
“Treading water slowly is not public policy,” Keating said. The compact proposal of the National Association of Insurance Commissioners “doesnt seem to be moving very fast,” he said. “We cant wait five years because the industry has an obligation to provide security and other products to the public. These need to be approved quickly.”
Appearing on a panel with NAIC President Mike Pickens, Keating said he hopes “the NAIC recognizes how crucial this issue is for the ACLI.”
Pickens said there is a move at the NAIC “to give companies a fair forum.
“The 1970s Ralph Nader-type approach to regulation is not good for consumers,” he continued, adding that he feels most new commissioners share this belief.
“Now there are regulators willing to work on parallel tracks with the industry to fend off federal regulation,” Pickens said.
Probably the major problem facing the NAIC in regard to establishing uniformity, Pickens said, is “how to overcome local political issues, particularly in the larger states.”
Regarding speed to market, Pickens said the NAIC has made progress and that its System for Electronic Rates and Forms Filings (SERFF) program “does 20,000 filings a month.”
Pickens granted that the ACLIs OFC position was creating some pressure on the NAIC, but said that “Congress carrot and stick approach gets regulators attention more than anything else.”
In this regard Pickens mentioned that legislative action this summer in Congress could be focused around a bill introduced by Rep. Richard Baker, R-La. This would have elements similar to a proposal put forth by the Independent Insurance Agents & Brokers of America, Alexandria, Va., which employs this carrot and stick approach, Pickens said.
The likely elements of the bill, according to Pickens, would cover rate and form approval, advertising approval and market conduct and use a National Association of Registered Agents and Brokers-like mechanism to create uniformity among the states.
At an earlier session, South Carolina Insurance Director Ernst N. Csiszar said he thinks the industry needs “to be deregulated.
“The current regulatory system calls for a reengineering process,” he said. “We need to take a blank sheet and start all over.”
Turning to specifics, Csiszar said “what really screws things up is the pre-approval process, especially in regard to rates but also on products. We have to face the fact that rate-making and prior approval are socialism.”
Csiszar said uniformity would be very difficult to achieve “unless you have some kind of federal mandate.” Proof of this, he added, was how producers in his own state tinkered with the NAICs Producer Licensing model act when it was in the legislature. Even very small changes from one state to another make uniformity impossible, he said.
Reproduced from National Underwriter Edition, May 12, 2003. Copyright 2003 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.