Life insurance industry and agent groups are responding differently to the new insurance regulatory reform “road map.”[@@]
Rep. Richard Baker, R-La., chairman of the Capital Markets Subcommittee of the U.S. House Financial Services Committee, released a draft of the proposed bill Aug. 20.
The National Association of Insurance and Financial Advisors, Falls Church, Va., has welcomed the draft while implying that it might seek some changes.
“We have some questions we will be asking the committee,” says Randy Kilgore, president of NAIFA. “But, in general, we like what we see.”
The American Council of Life Insurers, Washington, which supports legislation that would create an optional federal charter for insurers as soon as possible, has been more restrained in its comments.
“ACLI is pleased this draft has been released and is currently reviewing it,” the ACLI says in a statement about the road map draft. “An initial scan shows that the [Financial Services] Committee has attempted to address some of the regulatory concerns that we raised. We are looking forward to working with the committee to produce a final product that will receive broad support.”
A major property-casualty insurance group, the Independent Insurance Agents and Brokers of America, Washington, is supporting the road map draft.
The current version of the proposed bill, officially known as the State Modernization and Regulatory Transparency Act, would leave regulation in the hands of the states, but it would open up a role for federal regulation by establishing an advisory council of federal and state regulators. The council would have no regulatory power over the industry, but it would mediate disputes and report to Congress on compliance with the SMART law.
Baker’s panel now plans to hold a hearing on insurance regulatory reform soon after Congress returns from its summer recess Sept. 7, make changes in the proposal based on comments from industry and members of the panel, and hold a markup later in the month.
Congress might not have time to pass the SMART bill this year, but firm support from agent and property-casualty groups and a strong vote in favor of the bill by the House Financial Services Committee could make the issue a legislative priority for the new Congress, observers say.
William Anderson, NAIFA’s senior vice president of law and government relations, has singled out several provisions of the road map draft for praise.
“We’re specifically delighted to see the proposal addresses producer licensing and will provide streamlined licensing standards and increased uniformity for agents and brokers,” Anderson says. “It will eliminate discriminatory requirements and excessive continuing education burdens and will require full implementation and utilization of the National Association of Insurance Commissioners’ [NAIC] national producer licensing database, the National Insurance Producer Registry [NIPR], upon which NAIFA serves on its board.”
Anderson adds that NAIFA also supports language in the draft that calls for coordinated electronic filing for agent and broker licensing applications for both new licenses and renewals.
“Additionally, we’re pleased to see that the proposal addresses speed-to-market in the life insurance area,” Anderson says. “It will require a single point-of-filing, and review and approval for life insurance policy forms as well as updated, uniform laws and regulations governing the filing of content and the regulation of policy forms for life insurance, and it will ensure full participation in the Interstate Compact Act, a proposal of the NAIC that NAIFA has endorsed from the very beginning and is continuing to work on for enactment by the states.”
Another provision that NAIFA will support would create a coordinated network of computer systems that financial services regulators could use to share anti-fraud information. The network “will give financial regulators, including insurance regulators, access to the FBI federal criminal background information on insurance agents, a position that NAIFA has long advocated,” Anderson says.