NU Online News Service, Feb. 26, 2004, 11:28 a.m. EST, Washington – Some insurance commissioners hope the National Association of Insurance and Financial Advisors will reject optional federal chartering.[@@]
The Falls Church, Va., group recently adopted a policy that supports optional federal chartering as one means of improving insurance regulation.
The Southeastern Zone of the National Association of Insurance Commissioners, Kansas City, Mo., is circulating a resolution which says the NAIC members “encourage and support the efforts of NAIFA members to amend their newly adopted policy to clarify their long-standing support for state insurance regulation and their strong opposition to the creation of a federal insurance regulator or a so-called ?optional or dual federal charter’ for insurers and producers.”
The resolution says NAIFA’s new policy “represents a significant change of their long-standing policy in support of state regulation and appears not be understood or supported by their individual members in many states.”
NAIFA Chief Executive David Woods says the association is very disappointed that this group of commissioners apparently is responding to what he believes to be a very small group of NAIFA members.
Nationally, Woods says, he has heard from only about 50 NAIFA members who registered complaints about NAIFA’s policy, and about one-half of those members simply wanted an explanation.
He does not believe, he says, that any more than a small number of members oppose NAIFA’s policy.
Moreover, Woods says, he is concerned about regulators attempting to influence those they regulate. He adds that many of the statements made in the resolution are incorrect. For example, Woods says, the very first line of NAIFA’s policy re-emphasizes its strong support for state regulation.
Woods says, however, that the controversy demonstrates how influential an organization NAIFA is, in that NAIFA’s policy stirred some commissioners to take this type of action.
The resolution says NAIFA’s policy represents a “significant reversal” of the association’s full support for state insurance regulation and a significant departure from the position of other national associations of professional insurance producers. The other associations fully support state regulation and are strongly opposed to creation of a federal insurance regulator or optional federal charter, the resolution says.
NAIFA’s policy, the resolution adds, may have the effect of undermining the support and implementation of the NAIC’s Action Plan for Regulatory Modernization.
NAIFA adopted its policy at its January 2004, board meeting, citing changing dynamics in the life insurance industry as the reason it is now considering a federal role in insurance regulation.
If properly enacted, NAIFA says, federal legislation could create a national producers license, a single point-of-entry for insurance products that would increase speed-to-market and a federal insurance advocate who could address the needs of consumers and the industry on a national level.