There must be some mechanism to force states to establish uniform insurance regulation, but the 108th Congress will not consider creation of a federal regulator, Rep. Richard Baker, R-La., says.
Baker, who chairs the House Financial Services subcommittee with jurisdiction over insurance, says that Congress must do something about 56 varying systems of insurance regulation that inhibit the flow of the insurance product to consumers.
Speaking before the National Legislative Conference of the Independent Insurance Agents and Brokers of America, Alexandria, Va., Baker says that the present regulatory system inhibits competition, and consumers in many jurisdictions have fewer choices and pay higher premiums because of it.
Baker says that if an insurance company wants to put a new product on the market today, it must receive approval from 55 different jurisdictions that have different regulatory requirements.
No other products sold in America face a similar set of constraints, he says.
Baker notes that the Committee has identified some of the confusing and inconsistent state regulatory requirements faced by insurers.
One state, he says, requires policy numbers to be placed on the bottom left side of a policy, while most other states require the numbers to be placed on the bottom right. If a company gets it wrong, Baker says, the policy will not be approved.
One state requires documents to be stapled, he says, while another state bars staples.