Close Close

Regulation and Compliance > State Regulation

Serio: NAIC Outreach To Congress Is Working

Your article was successfully shared with the contacts you provided.

Serio: NAIC Outreach To Congress Is Working



The House Financial Services Committee and the National Association of Insurance Commissioners share a joint 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 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, Serio says, 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.

While Congressional Outreach is not new for NAIC, Serio says, it has been stepped up recently with more commissioners taking part in one-on-one discussions with members of their congressional delegations.

The effort, he says, has been very favorably received by members of Congress and has allowed NAIC to dispel some misconceptions about the pace of reform.

During one hearing, Serio notes, some members of the House Financial Services Committee expressed concerns that reforms were taking too long to implement.

It was very important for NAIC, he says, to correct any misconceptions about the pace of change. NAIC and the states, Serio says, are developing a culture of change, in which the regulatory system is being constantly scrutinized for improvements.

So far, Serio says, members of Congress seem impressed with the work NAIC and the states have done.

Asked whether NAICs efforts have helped take optional federal chartering of insurance companies off the table as a legislative option, he says, “Im not sure it has ever been on the table.”

The discussions, he says, have always revolved around modernizing state regulation. The committee is not looking at replacing the state system, he says.

Serio says that while 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,” Serio says.

He says that while many CEOs, both on the life insurance side and the property-casualty insurance side, seem to think OFC is some kind of panacea, there are differences among the industries.

Some p-c CEOs, Serio says, have the perception that their concerns have not really been part of the state regulatory reform discussion. Property-casualty executives, he says, have not bought into the NAICs modernization effort to the same extent as life executives.

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 the products dont vary significantly from state to state.

NAIC, Serio says, needs to speak directly to CEOs who may become more positive toward state regulation when they see what is being done on modernization.

Reproduced from National Underwriter Life & Health/Financial Services Edition, March 12, 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.