NU Online News Service, Nov. 5, 2003, 6:07 p.m. EST – Representatives for the National Association of Insurance Commissioners, Kansas City, Mo., and the National Conference of Insurance Legislators, Albany, N.Y., battled insurance company executives today at a hearing of the capital markets subcommittee of the U.S. House Finance Committee.
NAIC President Mike Pickens and Neil Breslin, a witness from NCOIL, defended state insurance regulators and state efforts to improve insurance regulation.
“The system of state insurance regulation in the United States has worked well for 125 years,” Pickens testified, according to a written version of his remarks. “State regulators understand that protecting America’s insurance consumers is our first responsibility.”
Congress should give state lawmakers and regulators more time to modernize insurance regulation and increase uniformity, Pickens said.
“This state-based regulatory reform approach far exceeds having a highly politicized ?insurance czar’ in Washington, D.C., along with the huge, costly, isolated federal bureaucracy that will accompany it,” Pickens said.
“NCOIL strongly believes the creation of a new federal bureaucracy would be unwise and most likely harmful to insurance buyers,” Breslin said. “State legislators know that more work needs to be done, and we will get it done.”
But William Fisher, associate general counsel of Massachusetts Mutual Life Insurance Company, Springfield, Mass., and Neal Wolin, general counsel of Hartford Financial Services Group Inc., Hartford, testified in favor of letting insurers choose between state and federal regulation, as banks already do.
MassMutual has undergone 14 separate state market conduct examinations in the past five years, Fisher reported.
“The average duration of these examinations from initiation to issuance of the final report generally ranges from six to 12 months, and the examinations often involve on-site reviews lasting 90 days,” Fisher said.
Wolin pointed out that the NAIC and individual state insurance commissioners have been trying to modernize company solvency protection and consumer protection for at least 20 years. The NAIC and the commissioners “have worked in good faith, but the actual reforms have been too slow in coming,” Wolin complained.
The House has posted written versions of the witnesses’ testimony at http://financialservices.house.gov/hearings.asp?formmode=detail&hearing=266&comm=1