An effort by insurance regulators and legislators to streamline life insurance product filing is at an important point in its development.
At press time, state insurance regulators at the National Association of Insurance Commissioners are scheduled to examine and quite possibly affirm changes made by state legislators to an interstate compact draft. This draft would create a national oversight body that would examine and approve filings for products including life insurance and annuities.
If those changes are acceptable, the National Conference of State Legislatures could take up the issue this week at its national meeting.
Even as that work is being done, regulators are working on creating market conduct efficiencies that they hope will provide better consumer protections as well as a more sensible overview for companies.
Both projects are part of a broader effort to update state regulation of insurance in a financial services environment in which competition among insurers and other financial services providers has become heated.
That competition is likely to continue and, in all likelihood, intensify as the different industry segments become more comfortable with the Gramm-Leach-Bliley Act of 1999.
While the details of any changes are always critical, the wider view is equally as important.
Regulators, insurers and consumer advocates continue to argue points and approaches on these varied projects as they find their way to a better system of state regulation. Often they disagree, sometimes pointedly.
As long as they continue to find that path, their efforts are well spent. Despite past inefficiencies and frustrations among insurers that it is often too long and too costly to get business done, state insurance regulation has a lot to offer.
Both advocates of state regulation and optional federal chartering agree that state regulation is a valuable goal.
Even as Congress considers the possibility of federal regulation, there is no reason to maintain a cynical attitude about the prospect for meaningful state regulatory reform.
For the consumer, it can provide access and potential relief from potential and actual abuses. And it affords a wealth of consumer information. Any consumer visiting Web sites of many state insurance departments can come away with information about buying insurance.
During the summer NAIC meeting last month, Rep. Michael Oxley, R-Ohio, chairman of the House Committee on Financial Services, noted that state regulators “had made progress but still had a long way to go.”
What regulators, and indeed, the industry as a whole need to take comfort in is the progress they have made.
There may still be a long way to go. But with a determined, consistent approach, that distance can be narrowed.
Reproduced from National Underwriter Life & Health/Financial Services Edition, July 21, 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.