IMSAs Director Hopes For Major Role If Federal Reform Takes Hold
The Insurance Marketplace Standards Association hopes to play a major role in helping federal lawmakers put together insurance regulatory reform legislation, possibly even becoming a self-regulatory organization on market conduct.
Its all very speculative and a lot of work still needs to be done, says Brian K. Atchinson, executive director of the Chevy Chase, Md.-based IMSA. But IMSA is a proactive organization that provides consistent and effective consumer protection standards in the life insurance industry, he says.
A lot depends on the interest of House and Senate leaders to move in the direction of an SRO, Atchinson says. There is much aversion, he says, to creating a new federal bureaucracy to regulate the insurance industry.
But he notes that the National Association of Securities Dealers, which some identify as a model for the insurance industry, is not a federal bureaucracy.
Part of the solution to the problem of regulatory reform, Atchinson says, could well include an SRO, albeit it one that would function differently from the NASD.
But he reiterates that this is all very speculative. Even if a decision is made in Congress to go in that direction, Atchinson says, a lot would have to be sorted out before creation of an SRO.
Whatever direction Congress decides to take, he says, IMSA can provide guidance on establishing uniformity in market conduct.
IMSA, Atchinson notes, already offers a consistent set of national standards for marketplace conduct.
There is no need to reinvent the wheel, he says. Sixty percent of the life insurance marketplace is abiding by the standards put in place by IMSA. When you have 60% of the marketplace, it makes perfect sense to build on that.
There is a very compelling need for improvement in insurance regulation, says Atchinson, who is a former insurance commissioner of Maine and past president of the National Association of Insurance Commissioners.
But he believes the present leadership of NAIC is doing its best to respond to the need.
The current NAIC leadership is as forward thinking as any I have ever seen, Atchinson says.
The leadership, he says, understands the challenge that confronts it.
That challenge, Atchinson notes, was identified in a recent General Accounting Office study on market conduct.
The study found that the market conduct examiners handbook was being used in different ways throughout the country, he says.
Atchinson says that IMSA itself has been undergoing its own process of reform. Over the past two and one-half years, he says, he has been talking to Congressional staff, as well as representatives from the NASD, NAIC, the Securities and Exchange Commission and some 40 state insurance departments.
As a result of these discussions, he says, IMSA made some significant upgrades relating to certain testing and sampling practices in order to assure a consistent and strong program.
In addition, Atchinson says, IMSA has revisited its own governance and has modified the composition of its board of directors.
Just like the NASD, he says, IMSA has added new outside directors from different organizations and callings. These include academics, consumer representatives and producers, he says. He notes, in particular, that David Woods, chief executive officer of the National Association of Insurance and Financial Advisors, is now a member of the IMSA board.
Now, Atchinson says, IMSA is looking to add other outside directors, with the expectation that eventually, 50% of IMSAs board will be comprised of people who are not insurance company CEOs.
Whatever direction Congress chooses to go, Atchinson says, IMSA offers a blueprint for national market conduct standards.
We stand ready to help as best we can, he says.
Reproduced from National Underwriter Edition, June 11, 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.