NU Online News Service, Jan. 20, 2004, 10:12 a.m. EST, Washington – The National Association of Insurance and Financial Advisors has endorsed optional federal chartering for insurance companies and agencies.[@@]
The action came at the annual January meeting of NAIFA’s board of trustees, which said it wanted to strengthen the Falls Church, Va., group’s position on insurance regulatory reform.
NAIFA says its strengthened policy embraces certain federal initiatives that could work to improve insurance regulation.
In addition to optional federal chartering, these include creation of a federal insurance advocate and creation of an optional national producer’s license for insurance professionals, NAIFA says.
At the same time, NAIFA says it continues to support state regulation of insurance and remains committed to supporting the Action Plan for Regulatory Modernization. The plan is sponsored by the National Association of Insurance Commissioners, Kansas City, Mo.
NAIFA President Randy Kilgore says that although NAIFA supports state regulation, the changing dynamics of the financial services industry in the 21st century compel the association to be open-minded about all promising options for improving insurance regulation.
“NAIFA believes that the federal government could, with our input, bring about much-needed improvement to insurance regulation, for the benefit of consumers and the insurance industry,” Kilgore says.
If properly enacted, regulatory reform could produce important benefits, NAIFA says, including an optional national producer’s license, a single point of entry for insurance products to increase speed-to-market, and a federal insurance advocate who can address the needs of consumers and the industry on a national level.
The federal advocate can provide industry expertise when Congress and the executive branch consider insurance issues, NAIFA says.
“We hope these factors will lower the costs of regulatory compliance, make the introduction of new products easier and improve the industry’s ability to access new sources of capital,” NAIFA Chief Executive Officer David Woods says.