NU Online News Service, Nov. 5, 2003, 6:09 p.m. EST – Insurance regulators outside Massachusetts may copy a Bay State initiative that has officials meeting face to face with insurance company boards.
Jurisdictions that are considering copying the program include the District of Columbia, New Jersey and North Dakota, says Massachusetts Insurance Commissioner Julianne Bowler.
Massachusetts has 114 individual domestic companies, with two-thirds of those companies in the property-casualty market. To date, Massachusetts regulators have visited six companies and 10 company groups. Department officials intend to meet with seven more companies by the end of the year and to have all meetings completed by June 2004.
When regulators treat a meeting more as a discussion than as a confrontation, board members often physically relax, Bowler reports.
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Bowler says meeting with companies’ boards can lead to early detection of financial problems, foster a process of “self-reflection and self-correction,” and keep company failures from “clobbering the guaranty fund.”
In addition to understanding issues such as diversification, a board should have a handle on industry-specific issues, such as underwriting, regulatory matters and legislative matters, Bowler says.