NU Online News Service, March 3, 2004, 2:25 pm EST ? Washington: The House Financial Services Committee and the National Association of Insurance Commissioners share a desire to preserve state regulation of insurance, New York Insurance Superintendent Greg Serio says.[@@]
In an interview with National Underwriter, Serio says that while he expects the House committee to consider legislation on improving insurance regulation, the bill will likely focus on using federal tools to encourage states to enact reforms rather than creating a federal regulatory presence.
The Kansas City, Mo.-based NAIC has been involved in an enhanced Congressional Outreach program aimed at communicating the efforts of states and the NAIC to improve insurance regulation and the ability of states to respond to specific state concerns, Serio says.
While Congressional Outreach is not new for the NAIC, it has been stepped up recently with more insurance commissioners taking part in one-on-one discussions with members of their Congressional delegations both in the House and the Senate, Serio says.
The effort has been favorably received by members of Congress and has allowed NAIC to dispel some misconceptions about the pace of reform, he says.
During one hearing, some members of the House Financial Services Committee expressed concerns that reforms were taking too long. Serio notes that is important for the NAIC to correct any misconceptions about the pace of change. NAIC and the states are developing a culture of change, in which the regulatory system is being constantly scrutinized for improvements, he adds.
Serio believes members of Congress seem impressed with the work the NAIC and the states have done.
Asked whether the association’s efforts have helped take optional federal chartering of insurance companies off the table as a legislative option, he says wryly, “I’m not sure it has ever been on the table.”
The committee is not looking at replacing the state system, he says. Its discussions have always revolved around modernizing state regulation.
Serio says that while the NAIC continues its Congressional Outreach program, the next step is to go directly to insurance company chief executive officers to discuss regulatory reform.
“We have not given equal time to CEOs who are clamoring for change,” he says.
While many CEOs, both on the life insurance side and the property-casualty side, seem to think that OFC is some kind of panacea, there are differences among the industries, he notes.
Some p-c CEOs think that their concerns have not really be part of the state regulatory reform discussion. Those executives have not bought into the NAIC’s modernization effort to the same extent as life executives, he says.
That, he adds as an aside, raises the question of why so many life insurers are clamoring for OFC.
But he notes that p-c insurance involves more geographic distribution and more risk distribution than life insurance, where products don’t vary significantly from state-to-state.
NAIC needs to speak directly to CEOs, he says, because they may become more positive toward state regulation when they see what is being done on modernization.