NU Online News Service, June 11, 2004, 5:39 p.m. EDT – The head of the National Conference of Insurance Legislators, Albany, N.Y., has warned a key lawmaker that the current version of his reform proposal could have a “disastrous impact on state insurance regulation.”[@@]
Steven Geller, a Florida state senator who serves as NCOIL’s president, has sent a letter on behalf of the NCOIL executive committee that criticizes an insurance regulatory reform roadmap released by U.S. House Financial Services Committee Chairman Michael Oxley, R-Ohio.
Oxley and a colleague, Richard Baker, chairman of the Financial Services Committee’s capital markets subcommittee, have suggested in a draft of the roadmap that the United States ought to preserve state insurance regulation but mandate some kind of national insurance regulatory standards.
NCOIL will contribute to the development of the Oxley-Baker Roadmap and withhold judgment until the roadmap is complete, Geller writes in the letter to Oxley.
But NCOIL believes that mandating national insurance regulatory standards “could create a legislative vacuum whereby Congress would establish insurance regulatory standards and the state insurance commissioners would enforce them,” Geller writes. “That could nullify state legislators’ ability to respond to specific marketplace and consumer protection issues.”
States have been doing a good job of responding to insurance regulatory changes for 135 years, and insurance is more sensitive to geographical factors than other financial products, Geller argues.
“Given the uniqueness of insurance products, the individual states are best positioned to monitor the marketplace and protect consumers,” Geller writes. “With a few isolated exceptions, the insurance industry ? under the stewardship of state-level public policymakers ? has been free of the type of scandals and consumer abuses witnessed in other sectors of the financial services industry.”
Geller acknowledges concerns about lack of uniform insurance laws and regulations, but he says NCOIL is committed to helping to lead the effort to bring about regulatory uniformity.