NU Online News Service, June 3, 2003, 5:44 p.m. EDT — New York
U.S. insurance regulators should consider giving insurers a bigger role in preventing insurance company failures, according to New York Insurance Superintendent Greg Serio.
“Some regulators in the United States are absolutely fearful of failures,” Serio said here today at a conference organized by Standard & Poor’s Ratings Services, New York.
Serio agreed that regulators ought to try to prevent defaults, but he questioned whether regulators ought to try to prevent defaults at any cost.
Regulators could rely more on the kind of self-policing efforts developed by the Insurance Marketplace Standards Association, Washington, Serio said.
The current insurance company guaranty system is “elegant” because it makes insurers responsible for covering the cost of other insurers’ failures, Serio added.
The system could create more peer efforts to make sure that companies remain financially strong, Serio said.
Serio also suggested that technology could help insurance departments devote more staff time to monitoring insurer solvency.
The New York State Insurance Department, for example, already has processed 100,000 license renewals and 300,000 agency appointments online. Use of the Web has freed up the time of at least three department staff members, Serio said.
Serio called for property-casualty insurers to help increase regulatory efficiency by submitting more product filings through his department’s Web-based filing system.
Life insurers submit half of their product filings through the Web, but only 8% of property-casualty product filings come in through that route, Serio reported.
Serio said insurance regulators might be able to contribute to increased efficiency by reevaluating the need for prior department review of product filings.
“Very little comes from prior product approvals,” Serio said.
? Praised efforts by the National Association of Insurance Commissioners, Kansas City, Mo., to refocus the NAIC Securities Valuation Office, so that the SVO will no longer be “rubber stamping” work already done by the rating agencies.
? Talked about federal regulation. “I’m a states’ rights guy,” Serio said, but he added that it would not be a bad thing if states worked with the federal government to better regulate insurance.