A group of state insurance commissioners is trying to force the National Association of Insurance and Financial Advisors to reconsider its recently adopted policy supporting optional federal chartering as one means of improving insurance regulation.
The Southeastern Zone of the National Association of Insurance Commissioners is circulating a resolution that 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 NAIFAs new policy “represents a significant change of their long-standing policy in support of state regulation and appears not to be understood or supported by their individual members in many states.”
David F. Woods, CEO of NAIFA, says the association is very disappointed that this group of commissioners is apparently responding to what he believes is a very small group of NAIFA members.
Nationally, Woods says, he has heard from only about 50 NAIFA members who registered complaints about NAIFAs policy, and about half of those members simply wanted an explanation.
However, 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 NAIFAs policy re-emphasizes its strong support for state regulation.
The commissioners resolution says NAIFAs policy represents a “significant reversal” of its full support of state insurance regulation and a significant departure from the position of other national associations of professional insurance producers who fully support state regulation and are strongly opposed to creation of a federal insurance regulator or optional federal charter.
NAIFAs policy, the resolution adds, may have the effect of undermining the support and implementation of the NAICs 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 create a federal insurance advocate who could address the needs of consumers and the industry on a national level.
Reproduced from National Underwriter Life & Health/Financial Services Edition, February 27, 2004. Copyright 2004 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.