ACLI Has Many Questions
About Oxleys Approach
The American Council of Life Insurers wants to work closely with House Financial Services Committee Chairman Mike Oxley, R-Ohio, on insurance regulatory reform but has many questions about his approach, a senior ACLI executive says.
Gary Hughes, senior vice president with the Washington-based ACLI, says Oxley has outlined a very rigid framework for reform, and many aspects of it, particularly relating to enforcement, are problematic.
Hughes was responding to a recent speech by Oxley before the National Association of Insurance Commissioners in which the chairman discussed the approach his committee will take regarding insurance regulatory reform. (See story on page 6.)
Oxley says the approach will involve a federal-state advisory council that will ensure states implement all the reforms, including speed-to-market and uniformity in market conduct exams.
However, he rules out a federal regulator. While, for constitutional reasons, there might be a federal appointee who would be empowered to approve or disapprove recommendations made by the advisory council, Oxley says, this individual would have no regulatory or licensing authority.
Hughes says that by completely ruling out a federal regulator, Oxley has taken off the table the most logical means of assuring compliance by the states. Without a federal regulator, he says, the question is who will determine compliance. Perhaps it will be the courts, Hughes says, but that is not something people would be excited about.
Hughes notes that there are differences between the life industry and property-casualty industry. The p-c industry, he says, wants deregulation, which some believe can be accomplished by federal preemption.