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March 26, 2004 at 07:00 PM
NU Online News Service, March 26, 2004, 5:40 p.m. EST, Washington – Massachusetts Mutual Life Insurance Company, Springfield, Mass., is supporting the Oxley-Baker proposal for reforming the state insurance regulatory system.[@@]
Rep. Michael Oxley, R-Ohio, chairman of the House Financial Services Committee, and Rep. Richard Baker, R-La., are calling for a limited approach to regulatory reform.
MassMutual, a longtime advocate of optional federal chartering, still believes that creating an optional federal charter is the appropriate long-term solution, according to Ken Cohen, MassMutual’s senior vice president of government relations.
But, if the Oxley-Baker proposal is successful, it will create a more dynamic and responsive marketplace, and it could be a very important step forward on the path toward creating an optional federal charter, Cohen says.
Critical topics still under discussion include rate regulation, enforcement and dispute resolution, Cohen says.
- Rate regulation: Rate regulation is mainly a property-casualty issue, not a life issue, but it remains a very difficult one for the House Financial Services Committee, Cohen says.
- Enforcement: Cohen says state regulators and insurers will have concerns about whatever mechanism is chosen. Some in the insurance industry would prefer to see the federal government enforce reforms by cutting the revenue of state insurance regulators that are out of compliance, but Cohen says MassMutual would prefer to see Congress come up with another enforcement mechanism. State regulators need resources to be effective, and the goal of reform is to promote efficiency, not to undermine effectiveness, Cohen says.
