Bankers Say Insurance Regulation Needs Major Overhaul
Bankers believe major changes are needed in insurance regulation in order to make the industry more efficient and that the bank model, specifically a federal charter option, is a good starting point.
Maryland Insurance Commissioner Alfred W. Redmer Jr., emphatically disagreed, however, at a recent banks-in-insurance conference, saying state regulation “is providing a value-added service” and insurance regulators are amenable to change to make the business friendlier to bankers.
The comments were made at a panel discussion on “The Future of Insurance Regulation” that closed out the annual meeting here of the American Bankers Insurance Association.
“State regulators acknowledge the need for change and want to bring about change…to bring efficiency to the regulatory process within and above the different states,” Redmer said. “We acknowledge the competition within the financial services industry.” He cited as examples such issues as producer licensing, privacy and coordination with federal regulators, where, immediately after the Gramm-Leach-Bliley Act was passed in 1999, state regulators began “reaching out” to ensure that the changes imposed by the law were carried out swiftly.
But, he said, recreating the dual banking system for insurance, as the ABIA is proposing, is inappropriate. “Having a second regulatory system produces nothing but confusion for consumers.”